ON SKYPE OUT AS A SUBSCRIPTION SERVICE

FREE NO MORE

Well, with 18 days to until 2007 begins, Skype announced the expected and logical next step to it's decision earlier this May. 

It's to offer free outgoing phone calls in the US and Canada via it's SkypeOut service, until the end of the year.  As the New York Times piece on the announcement explains:

"Skype, the Internet calling service owned by  eBay, said Tuesday that as of Jan. 1 it would begin charging $30 a year for unlimited calls to landline and mobile phones within the United States and Canada. Those calls had been free since last spring.      

The new annual fee for unlimited calling, while still nominal compared with other Internet calling plans, is part of a broader strategy by eBay to expand Skype’s product offerings and revenue."

Yours truly has taken advantage of Skype's offer of a 50% discount to folks who subscribe to the service before December 31st, 2006.  After having used the service for most of the year, I've found it to be generally pretty handy and useful on the road.

I mentioned back in May, what the whole free offer was about:

"...at it's simplest, this is a short-term, customer acquisition move.

It accelerates further the trend of voice communications by itself becoming a commodity application on devices."

Now the question is how much easier can Skype make it's service vis a vis the functionality of plain-old-telephone service (POTS)?  The NYTimes piece does mention the following:

"But potentially more significant innovations are planned for next year, when Skype will introduce services with  Yahoo and  Google that will allow Web surfers to click a button and call a business they have found during a search."

Hope Skype and eBay have a little bit more than that up their sleeve for 2007. 

Comments

[Alex Pooley]

Excellent digest of the move by Skype. I think it's inevitable that as the Internet matures, infrastructure players like Skype will become invaluable to the entire planet.

[OlivierSeres]

Hi, it's therefore natural to think about the business model. 30$/y is 2.5$/month. Assuming wholesale termination rates on mobile are 0.1$/mn, Skype margin will be negative if the customer calls mobile more than 25mn/month.

Is it silly to suspect skype dealing a revenue sharing plan with mobile operators (who in various countries US, Canada, China, India, South America, bill the called customer, unlike Europe where the caller pays all )?
Thanks for your thoughts

[ap]

I have enjoyed using VOIP technology as a Vonage customer. Still, I like Skype better but don't use it as often since it isn't able to completely replace the home telephone yet.

Vonage's Click2Call is a handy feature that dials my numbers for me. I expect Skype will have a higher profile when they offer this service through Google and Yahoo next year.