Skype expands calling options
NEW YORK - Skype, which helped make free PC-to-PC calling a global phenomenon, will announce Wednesday a $29.95-a-year service offering unlimited calls to wireless and traditional landline phones.
Skype's Unlimited Calling subscription moves the company toward the mainstream of phone services and poses a significant challenge on price to many VoIP services - short for Voice over Internet Protocol - that can cost $300 to $400 per year.
Previously, Skype users had to prepay for Skype credits to make such calls.
"Consumers like to pay on a subscription basis," says Don Albert, Skype's general manager for North America. "Now, our consumers have the option to do either one."
The good news, he says: "Either way you go, it's cheap."
Skype's latest plan is a successor to a free promotion that began in May and expires Dec. 31. The new offer is limited to consumers in the USA and Canada, and calls have to originate and terminate in those two countries.
Skype users can still make PC-to-PC calls at no charge and have the option to pay for PC-to-phones on a per-call basis. Skype currently charges about 2.1 cents a minute in the two countries, Albert says, and higher elsewhere.
Verizon and AT&T charge about $25 a month for their VoIP services, which, like Skype, require high-speed Internet access. Cable giants Comcast and Time Warner are rapidly adding VoIP to their service bundles for about $40 a month.
Unlike such VoIP services, however, Skype offers no 911 emergency capability. As such, it shouldn't be viewed as a substitute for regular phone service, notes Joe Laszlo, a senior analyst at JupiterResearch. "For now, Skype is best thought of as a low-cost way to keep in touch with friends and family overseas."
VoIP, which routes calls over the Internet, is one of the fastest-growing segments of telecommunications. By 2011, Jupiter predicts 26 million U.S. households will use VoIP, up from 6.5 million today.
To get consumers to sign up early for its first-ever subscription plan, Skype is offering several sweeteners: People who sign up by Jan. 31 will get a 50% discount on the annual fee, to $14.95. They'll also get about 100 minutes of free international calls and $50 in coupons for Skype gear, such as a Motorola headset.
In January, Albert says, Skype will introduce a dual-mode phone that allows consumers to make calls from home directly over their broadband connection without having to first boot up their PCs.
Users already registered with Skype can subscribe at www.skype.com. Others must download the necessary Skype software and then sign up.
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