Skype’s Deal with Verizon Wireless: Is That All There Is?

skype_logoBoth Verizon Wireless and Skype have confirmed that they have forged an agreement that will “deeply embed” Skype’s services into selected smartphones marketed to Verizon Wireless’ 91 million subscribers. As a result of the agreement, Skype will be “always on” for owners of BlackBerry Storm 9530, Storm2 9550, Curve 8330, Curve 8530, 8830 World Edition and Tour 9630 smartphones, as well as the following Android-based phones: including the Motorola DROID and DEVOUR and the HTC Eris. They will be able to avail themselves of free Skype-to-Skype voice calls, as well as IM-based chat, and “status indicators” for Skype subscribers around the world. They will also be able to initiate outbound calls to international numbers at Skypes “low rates” (as low as $0.02/minute or a flat $3 per month if Skype’s current pricing is applied).

The description of the range of services to be offered sounds exactly like the Skype application offered on the iPhone. The most salient difference will be that the app will be running constantly in background on the nine devices described (which is not possible on the iPhone). It also marks the symbolic end to Verizon’s (as well as its wireless cohort’s) long-standing concern that VoIP services offered over the data link will cannibalize their core voice revenues. John Stratton, Verizon’s Chief Marketing Officer, told attendees of the Mobile World Congress that he was not concerned about either erosion of the voice traffic on its network or a decline in quality that would result from congestion caused by massive demand for Voice-over-3G.

Stratton said that the application was jointly developed from the ground up, leaving many details up for interpretation. My own belief is that the always-on Skype will be “link agile” using WiFi when available, 3G in some cases or the Verizon cell network if required to sustain qualities. At least that’s how I would architect the service given that subscribers must contract with Verizon for one of its Voice and Data plans. According to an article by Roger Chen in the Wall Street Journal, the “cheapest monthly voice plan now costs $40 for 450 minutes, and a $30 data plan is required with any smart phone.” So you may as well make the best use of all the links you can.

As for the impact on the wireless VoIP world at large, the application seems underwhelming. Sure it rattles AT&T Mobility’s cage by offering a nailed up voice-over-3G service one week after AT&T made it clear that it would continue its WiFi only approach. Yet, the range of services that are offered have an entry-level feeling to them. Meanwhile, Mobile World Congress was brimming with some really impressive X-over-wireless-IP services. Of special interest to me is a “video calling over the Internet” offered through the iTunes store by Fring and this intriguing voice-to-voice universal translator service offered by wireless personal assistant specialist VoxOx.

Harking back to my post about “satsificing”, I’m not sure that any of the services will work at high-levels of quality in all instances, but they are working well enough to make them ready for prime time.



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