3Skype hype loses its shine

Skype and its UK mobile partner, 3, enjoyed a week of "you can't pay for publicity like this" as the British press joined the hype around the first mainstream operator to integrate Skype into a traditional handset. Certainly the prospect of free calls to any of Skype's 250 million subscribers will introduce a new dynamic into the high-margin cellular business. But by week's end the shine was coming off the announcement as it was revealed that for some users it could actually increase their phone costs , especially to other mobile operators.

Calls to non Skype landlines cost just 1.4p a minute, while calls to mobiles cost 16.6p. In comparison calling a mobile in the traditional way, from a landline, costs between 3.6p and 12.6p with BT. Rob Barnes, mobile expert at comparison firm Moneysuper-market, told the Times on Sunday: "There is a lot of hype around Skype, and while some of it is justified, you could end up paying more in some circumstances."

Also upsetting the purists was the revelation [1] by Marcus Göbel that the mobile calls on the 3Skypephone are basically GSM phone calls. The service will use the GSM network to connect with a sever run by iSkoot [2], which then carries the call over the fixed line internet to Skype. The data connection is only used to show the presence of the Skype buddies. As Gobell notes the calls from the 3Skypephone aren't 3G VoIP calls because the 3Skypephone doesn't do any mobile VoIP, only using Skype in the fixed line part of the call.

For More:
- Skype Press Release [3]
- Times Online Report [4]
- Skype On 3 Secrets Revealed Report [5]
- 3Skypephone doesn't do mobile VoIP Report [1]
- What is Skype's strategy? Blog [6]

Related Articles:
UK 3 to offer wireless VoIP Report [7]
VoIP becomes key in the battle for eyeballs Report [8]