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by Skype is changing its service model to allow for annual subscribers to have unlimited long distance calling from PC to POTS telephones in the United States and Canada. The company hopes to lure broadband users away from their existing long distance carriers with a single $14.95 annual fee. Skype's scheme is a direct challenge to Vonage, which charges a higher monthly fee for unlimited calling. The pricing challenge adds to the already muddy waters of selecting a VoIP provider. For instance, while Vonage allows inbound calls from standard telephones, Skype offers encrypted conversations.
Skype first hit the scene in August of 2003, offering free PC to PC "phone" calls across the Internet. Since then, the service's customer base exploded, leading to an enormous $2.6 billion purchase by eBay in 2005. Part of the VoIP boom is attributable to new technologies making the service friendlier. Products like telephone adaptors (that let you use your existing phone as a VoIP device) and 2 in 1 handsets (that connect to both Skype VoIP and your existing carrier simultaneously) give non-tech savvy users the feel of a regular phone, even though they are talking through the Skype network.
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I just noticed this message in my Skype account:
On January 18th 2007 we will announce an innovative and disruptive pricing structure to give Skype users even more exciting and cost effective ways to keep in touch.
Our new pricing plan includes a connection fee for all SkypeOut calls ranging from $ 0.000 to $ 0.039 (excluding VAT). The new connection fee will not apply to SkypeOut calls within the US or Canada if you have subscribed to the Unlimited Calling plan. This change be effective from January 18th, 2007.
I like how this connection fee is described as innovative, disruptive, exciting and cost effective. Wow. And no, the grammar is not my doing. It really does say "this change be effective..."
It really does say "this change be effective..."
Maybe it's a seedy Nigerian 411 scam through Skype?
Well, it was almost announced. They haven't listed prices yet, but Skype says they will now offer monthly plans similar to Vontage. Currently they only offer unlimited plans and per minute plans. From the AP story:
The Internet phone service Skype is introducing new domestic calling plans for 24 countries, plus Hong Kong, where users will pay a monthly subscription and a connection fee but no per-minute charges.
The monthly fees for the new Skype Pro plans have not yet been finalized, but they were expected to be set at less than 5 euros, or about $6.50, an executive told The Associated Press on Wednesday.
The per-call connection fee for Skype Pro calls within a given country to a regular phone or mobile device within that same country will be 3.9 euro cents, or roughly 5 U.S. cents, said Stefan Oberg, general manager for Skype Telecoms.
I think that it's going to be pretty hard to compete with themselves. Why wouldn't you just sign up for the unlimited plan for $15?
Skype buisness model is not proved and it is yet unknown if they ever make profits on the same scale as 'normal' telecom companies make.
I think Skype is hot! I think skype has opened the way for VOIP providers like http://best-t1-service-provider.com to increase revenue in the broadband industry.
RSS
Will Skype make money? by tomtolman :: NR6 :: on 19 December 2006
I must say I'm a big fan of Skype. I like to think that I'm an early adopter of most technology but I didn't start using Skype until a couple months ago, nearly 3 years after its launch. Calls to POTS telephones in the US are about $0.021 per minute so I loaded up my account with $10. I noticed that after hours of talking I had only been charged 12 cents. Turns out they were offering free calls through the end of the year. I signed up for the $14.95 for next year.
Some have speculated that eBay purchased Skype to get people in China to use eBay. China, however, has been blocking VoIP so eBay is turning their Chinese website over to TOM online. It is difficult to imagine how eBay plans to recoup their $2.6 billion dollar investment. They have 12 cents from me so far. Any ideas?