VOIP services

Why Mobile Operators Like Skype

11:40 AM -- Mobile operators' attitudes to Skype Ltd. have changed over the years about as much as Skype's value has been inflated, now that Microsoft Corp. (Nasdaq: MSFT) has agreed to pay US$8.5 billion for the VoIP service provider. (See Microsoft to Buy Skype for $8.5B and Microsoft + Skype + Nokia?)

Once mistrusted and shunned (i.e., blocked), Skype now has many mobile operator partnerships. The hostility to Skype hasn't disappeared entirely -- that over-the-top (OTT) service threat still exists -- but it has subsided. (See Skype, Verizon Add 4G Video Calling, CES 2011: Skype Video on Verizon LTE Phones, CES 2011: Skype Steals International Scene and KDDI Hearts Skype.)

Part of the reason for this is that mobile operators have worked out that Skype is a service that their customers want. More importantly, it's just the sort of value-added service that can help them win new subscribers and, more specifically, lucrative smartphone users. That's why Skype appeals to mobile operators.

"The ability to convert text and voice users to a smartphone and data plan is more important to operators than the potential threat of Skype to their business at this stage," says Gabriel Brown, senior analyst at Heavy Reading.

Besides, Skype on a 3G network shouldn't be considered a direct replacement for operator-provided voice services, because Skype doesn't work that well on 3G networks. "3G packet data is just not good enough for call quality of an OTT service to replace regular voice," notes Brown.

People typically would use Skype on their phones when they are not mobile and when using Wi-Fi networks, he explained.

That will change with Long Term Evolution (LTE), when there will be enough bandwidth for a decent service, but that is a future concern. (See LTE Voice Lag Leaves Operators Vulnerable and VoLTE Maintains Momentum.)

— Michelle Donegan, European Editor, Light Reading Mobile

Jeff Baumgartner 12/5/2012 | 5:05:42 PM
re: Why Mobile Operators Like Skype

I haven't used it all that much, but i've been surprised by how many people I've run across who swear by Skype ... thought not many have chucked their traditional phone service in place of it. JB

Gabriel Brown 12/5/2012 | 5:05:42 PM
re: Why Mobile Operators Like Skype

I use Skype Video on my mobile quite a bit. It's easier than starting up the home computer and works tolerably.

I used to use Skype for non-critical international calls as well. But with Vodafone UK you can now pay £5 a month to call international numbers for the same prices using a service that WORKS and is RELIABLE in a way that Skype Mobile just isn't.


Michelle Donegan 12/5/2012 | 5:05:38 PM
re: Why Mobile Operators Like Skype

Those quality of service problems that VoIP has over 3G networks should be less on LTE networks. But even so, and with the higher bandwidths of LTE, operators will have to be clever about pricing and about the policy control that will be needed.

If Skype, or any VoIP service, actually will be reliable on LTE networks -- so that someone wouldn't hesitate to use it for an important work call -- why do operators need IMS-based VoLTE? Because Skype's reliability is still an "if" here?

billsblots 12/5/2012 | 5:05:37 PM
re: Why Mobile Operators Like Skype

From earlier this year:

"Verizon Wireless and Skype said today that Skype mobile™ with video will soon be available on the Verizon Wireless 4G LTE Mobile Broadband network. This new version of Skype mobile from Verizon Wireless will be deeply integrated into a wide range of 4G smartphones to be available by mid-2011."

My daughter in Orange County CA bought the HTC Thunderbolt b/c it had been advertised with the skype video (and many other reasons).  Without any fanfare they dropped it before release of the phone and people were surprised to learn they did NOT have skype over VZW LTE 4G.

Any updates from VZW about this?  VZW customer service told my daughter it would be a flash upgrade when available.




Michelle Donegan 12/5/2012 | 5:05:35 PM
re: Why Mobile Operators Like Skype

Do you think Microsoft can give Skype the business credibility it needs?

unbearable 12/5/2012 | 5:05:35 PM
re: Why Mobile Operators Like Skype

Skype, like Google, makes itself inaccessible and unaccountable.

You can't ring them up to fix a billing snafu - they can make your published numbers disappear without a trace or recourse.   No business would trust his service to them.

The lack of a real hardware ATA doesn't help matters.


Michelle Donegan 12/5/2012 | 5:05:34 PM
re: Why Mobile Operators Like Skype

Thanks, we'll look into that!


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