Since its release late Saturday, Skype for iPhone 2.0, with its support of calling over 3G carriers and superwideband audio using Skype’s SILK codec, has set the blogosphere awash with two genres of commentary: those who seem to think the end of free Skype calling is approaching as an Armageddon and those who recognize the launch of Skype for iPhone 2.0 as not only setting a new benchmark for mobile voice calling, especially for call quality, but also having a significant impact on the overall smartphone market.

Re the “small fee” (now set to start at the beginning of 2011), I simply say this is one more sign that Skype is a business with investors who are looking for a return. Nobody can argue about its value-add, both in terms of providing international mobile calling convenience but also by delivering a significantly enhanced user experience through establishing a new benchmark for mobile call quality. This outcome definitely justifies a “small fee”, provided it is not obsessive. Alec Saunders, author of the Voice 2.0 Manifesto, positions this issue appropriately in “Skype’s “small fee” is noise, guys”:

Sometimes you have to really shake your head at the quality of the commentary on the internet.  Fact: Skype has finally released a version of Skype for iPhone that supports calling over 3G networks.  Never mind the fly in the ointment that all the commentary is  stuck on – the fact that Skype wants to charge a “small fee” for you to use it on a 3G network.  Frankly, that’s noise.  People will pay for the ability to make a high quality Skype call on 3G, and not pay their carriers long distance termination charges in foreign markets.  So long as the fee is reasonable, nobody is going to object.

Alec goes on to make several points about what the launch of Skype for iPhone 2.0 really means; his post is well worth the read. (Full disclosure: as Canadians who participate in the Canada Pension Plan, Alec and I each have a $17.50 investment in Skype.)

As for the new benchmark for mobile phone call quality, there are several impacts. But first, if you have not heard it already, click here to hear Skype for iPhone 2.0’s “near CD-quality” call first hand between myself and Dean Elwood in the U.K.

Andy Abramson comments on how deeply Skype developers may have gone into the iPhone hardware to achieve this result in “Skype on 3G-Something Borrowed, Something New”; he concludes with:

How good? Well put it this way..why would anyone with an iPhone want to call over old AT&T after their first Skype over 3G call. Oh, and yes, it makes Skype on Verizon sound like, well, a plain old telephone call…..Ma Bell, you’re back sounding like you’re old self. The way the boys in the labs have always dreamed and said you could.

Over at Voyces.com, in “Skype for iPhone over 3G: An Industry Benchmark Game Changer for Skype”, I have commented on the broader impact of Skype for iPhone’s support of SiLK. Simply put, it has the potential to place Skype as a key mobile communications software infrastructure supplier across the entire mobile phone industry. Not simply because of the technology itself but rather as a result of demonstrating high quality voice calls accessible to Skype’s several million users through a single application for the iPhone resulting in several million end user experience – the “Skype network effect”.

With the support of SILK in a smartphone application that runs over both 3G and WiFi, calling costs become almost secondary to an exceptional end user experience with voice quality on mobile devices.

SILK has now become not only a benchmark but also a key communications infrastructure element. End users will pay for a quality experience, especially when it impacts business productivity. Both wireless carriers and smartphone vendors need to rush to ensure they have incorporated Skype’s SILK technology into their offerings. Otherwise the iPhone (iPad and iPod Touch) have one more key feature that sets them apart from the remainder of the smartphone users.

Dean Elwood sums up this “Skype network effect” best when he talks about the Skype “on-net” calling:

The proposition for Skype’s shareholders is the fact that you have to be on the Skype network in order to get the “near CD-quality”. Because you don’t get hi-def when you call a regular landline or mobile, only another Skype-enabled device. So if you want to make free calls to your friends, they all need to get on the Skype net.

and concludes with…….

It’s the mass-market adoption of Skype that makes it work. You need to be on their network, along with other contacts you call regularly, to make it work for you. So in the absence of interconnect, which Skype do not do, your a. n. other mobile VoIP carrier of the future has to start from the ground up.

Bottom line: Dean backs up his observations by telling me that he will be making most of his voice calls using Skype for iPhone when away from his office. It would be most interesting to see not only if this drives more users to using Skype as opposed to the carriers’ voice channels but also the fallout for the transition of communications from a very hardware-oriented infrastructure to a complete software infrastructure operating totally “in the cloud”.

Next: the questions that remain to be answered going forward.

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Normally when Skype has made a major release, Skype PR will provide a heads-up to bloggers and other technology media a day or two ahead of time under an embargo until a defined time. This allows Skype to better manage the message to the market in terms of at least answering initial questions that may arise as a result of a pending release. However, when i returned home from a Saturday evening dinner today I started to find Twitter messages about Skype for iPhone over 3G becoming available.

Turns out that I had updated my Skype apps earlier today with no sign of a new version of Skype for iPhone. But when I checked again a few moments ago, sure enough, there was a new version of Skype for iPhone ready to download – the long awaited and much anticipated Skype for iPhone that works over 3G. But most interesting is the lack of the usual Skype blog post(s) announcing the availability of this release. Given that Skype does not have final control over Apple App Store releases, it should not be a total surprise that this has happened during the “quiet period” of a weekend. .

On downloading Skype for iPhone version 2.0 I found the overview screen shown on the right. Most interesting is the comment:

“Call using your 3G connection. Skype-to-Skype calls on 3G are free until at least the end of August 2010, after which there will be a small monthly fee (operator charges for data will still apply).” Update: according to the eventual press release, the free period has been extended to the end of December 2010.

Here’s the probable explanation: For Skype on 3 and Verizon’s “Skype mobile”, you need to be on a carrier voice and data plan that incorporates Skype calling, including free Skype-to-Skype calls. As was explained by iSkoot (who wrote the original code for Skype on 3) at eComm 2008, Skype receives a monthly royalty for each data and voice plan subscriber; effectively it is a royalty for licensing the Skype software.

But Skype for iPhone 2.0 is carrier-agnostic and involves no agreements with the various individual GSM/HSPA+ carriers. As a result it appears that Skype intends to charge a “small fee” for Skype-to-Skype calls after September 1, 2010. Some points:

• this eliminates the need for Skype to make agreements with individual carriers, who will already have the potential to benefit from the extra data usage (and new service subscribers) Skype for iPhone over 3G will generate.
• Skype already has a billing engine in place for acquiring Skype credits and Skype calling plans
• Skype for iPhone over 3G should also support SkypeOut calls over 3G with Skype using a Skype calling plan or Skype credits but paying no “affiliate commission” back to the carriers.
• Will the current calling plans incorporate an option for Skype over 3G?
• Question: will we see similar charges for Skype-to-Skype calls made using Skype for Symbian (which runs over 3G), a much rumored Skype for Android or, if we ever see it, a Skype for BlackBerry?
• Will be seeing a “less small” for Skype video calling over 3G, such as I experienced from a Nokia N900 user a few days ago?
• Be wary of using Skype for iPhone over 3G when roaming. Remember that those relatively expensive roaming charges will run up quickly during a Skype-to-Skype call made over 3G. This would even apply when you answer a Skype-to-Skype call via your 3G service.
• Stay with using Skype for iPhone over WiFi when roaming; after all WiFi is becoming the stealth carrier of choice.
• Skype for iPhone 2.0 with 3G support will be the true test of carriers’ willingness to allow IP-based voice communications services.  My local test will be Rogers’ adherence to its previously announced support of Skype operating over any of their services.

Of course attempting to make a Skype-to-Skype call late Saturday evening presents one other challenge – most of my Skype contacts whom I would call at this hour (11:00 p.m. GMT-4 or EDT) are offline. But I’ll make an attempt during the day Sunday and report on the actual call experience and the other new features mentioned in the App Store overview screen.

Meanwhile you can download Skype for iPhone 2.0 at the Apple App Store.

Note: This post has been mildly updated from the original posting made at midnight Saturday; a few hours’ sleep tends to generate a couple of additional points.

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Yesterday’s announcement that Skype will become available as a supported service on Verizon Wireless has to have sent a tsunami through the wireless operator world. To review the offering:

• A Skype client will be included on nine models of BlackBerry and Android smartphones in late March; current customers with these devices will be able to download the application
• Free Skype-to-Skype voice calling, both inbound and outbound, worldwide
• send and receive instant messaging (chat and presence) worldwide at no charge
• International SkypeOut calling; domestic calls come out of the customer’s voice plan
• Requires a Verizon voice and data plan
• Skype-to-Skype and SkypeOut calls as well as Skype IM activity will not impact a customer’s voice plan minutes and data plan usage.

The Background. Yesterday I wrote about the market environment and technology infrastructure that led to the ability to make this announcement

• It’s Verizon’s answer to AT&T’s forthcoming Skype for iPhone over 3G; however, given that planning and development activity have been ongoing for the past year, it’s a well thought out response with a focus on the user experience.
• The client will be a customized version of Skype Lite where the voice conversation is carried over the Verizon voice channel while presence indication, chat messages, mood messages and voice call signaling will be carried over the Verizon data channel.
• Launching a Skype voice call or chat session will be the same process as launching a traditional call.
• It’s integrated with the Address Book of the device such that all contacts can become Skype or SkypeOut contacts.
• Both the BlackBerry and Android smartphones can handle multi-tasking such that Skype “data” activity can continue to operate in the background while using other applications on the device.
• Client is optimized to take advantage of any battery life conservation features, certainly one of BlackBerry’s well known strengths.
• In response to one question at the press conference, Verizon stated they will not allow network quality to erode as a result of the additional load created by this service.
• Currently no video calling, file transfer, SMS messaging or WiFi access

Show me the money! Based on information provided by iSkoot at eComm 2008 and 3′s gradual expansion of Skype availability, it would appear at first glance that the business model involves:

• Verizon receiving a percentage of SkypeOut revenues (Skype has an affiliate program that provides referrers with 25% of SkypeOut revenues – an indicator of Skype’s margin for this service; 3 has offered SkypeOut since summer 2008)
• Skype receiving software licensing revenue associated with smartphone revenues (sales or lease) and Verizon voice/data plan revenues
• No termination charges for Skype-to-Skype calls (explains why Verizon can offer this as a free service to their data plan customers)

The implications:

• Has the potential to add 90 million Verizon customers to Skype’s user base
• Verizon customers can call over 500 million Skype accounts worldwide at no cost (probably about 100 million active accounts)
• SkypeOut becomes the de facto replacement for all Verizon’s other consumer international calling activity, especially for calls to those 44 countries on Skype’s Unlimited World Calling plans.
• Provides a subtle but significant carrier endorsement of BlackBerry and Android devices.
• Multi-tasking allows an “always on” user experience; the challenge will be when and how notifications are made of a Skype activity (presence status change, new chat message, etc.) when using other applications
• the underlying architecture takes advantage of the existing robust and scalable voice architecture while exchanging data over a wireless data service that is widely perceived as the best in the U.S due to the combination of its reliability and coverage.
• requires the installation of “Skype gateway” servers within Verizon’s infrastructure to terminate Skype calls under Verizon’s management and control, offset by the fact that there are no termination charges for Skype-to-Skype calls.

The downside: The architecture does not allow for WiFi access to Skype. As a result:

• one cannot readily make calls from WiFi access points outside the U.S. without paying roaming charges which can tend to be expensive. (Skype for iPhone on AT&T or T-Mobile’s @ Home service provide this capability.)
• calls cannot be made from locations without carrier network coverage (to a large extent Verizon’s U.S. geographical coverage addresses this issue but one can also be deep in a building with WiFi but no carrier).

The Questions:

• Will Skype Instant Messaging become a replacement for SMS messaging and cannibalize SMS revenues? Skype IM messages simply go out over the data channel as one application for the data plan.
• What happens when a Verizon customer is roaming in other countries?  Can visitors to Canada or Europe continue to use Skype at no additional cost while in Canada? or will a roaming charge apply?
• Verizon is currently offering these devices with a “Buy One Now, Get One Free” feature and a two year contract at prices ranging from $29.99 (Storm 1, 8530 Curve)to $179.99 (Storm 2). Will the lack of a low cost phone, such as 3’s Skypephone2, with Pay-As-You-Go impact adoption?
• What is the level of carrier exclusivity in the deal? Will we be seeing similar offers from T-Mobile US or AT&T any time soon? What portions of the embedded Skype software in the devices are  exclusive to Verizon?
• Who will be the first Canadian carrier to adopt the Verizon-Skype model? This will be interesting to follow given that:
  • there are no network quality issues with any of the three
  • the Bell Canada/Telus networks can not only support EVDO (same BlackBerries as offered by Verizon) but also GSM/LTE supported devices with their new HSPA+ network launched in time for the Vancouver 2010 Winter Olympics.
  • all three carriers now offer the iPhone; in this case Rogers was the original carrier with it.
• What level of support will Verizon provide for BlackBerry’s app store and Android’s market? Will Verizon facilitate and promote them or even provide an aggregated app store?

Final question: Skype stealthed its way onto AT&T 3G through the combination of supporting calling over WiFi access points (worldwide) and FCC lobbying; Skype is certainly helping to drive iPhone sales at AT&T. Can the combination of carrier-supported “free international calling”, full multi-tasking, a more robust and reliable network and the currently top selling smartphone brand in the U.S. sustain and build Verizon’s user base?

Bottom line: carriers are recognizing that Skype needs to incorporated into their infrastructure as a key element providing both uninhibited access and the network resources to ensure a high quality, positive user conversation experience. Most importantly they are discovering that Skype can become a marketing tool that drives market differentiation and user adoption.

For further commentary Carl Ford and I recorded a podcast conversation yesterday: Jim Courtney & Carl Ford Converse about Skype & VZW.

Update: Andy Abramson has been on-site at MWC and picked up some feedback: Skype, Verizon (and Andy) In the News

Photo: John Stratton, executive vice president and chief marketing officer for Verizon Wireless, and Josh Silverman, Skype’s CEO, announcing their strategic relationship to bring Skype to Verizon Wireless smartphones during a press conference at the 2010 Mobile World Congress in Barcelona, Spain earlier today. (Via Business Wire, accreditat[on not provided)

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Launch of the iPad last week and the Apple’s recent change in their developer terms of service involving the removal of restrictions for using VoIP technology over a carrier’s 3G network have had the Skype mobile team busy reviewing the opportunities.

In a Share Skype post, An update on Skype for iPhone and calling over 3G, Peter Parkes interviews Skype for Mobile team member David Ponsford making a few points:

• Skype’s high quality audio SILK technology will be embedded in the next version of Skype for iPhone (for both the latest model iPhone 3G S and iPod Touch)
• “Real soon now” (quoting David in the video) we’ll be able to make Skype for iPhone voice calls over a carrier’s 3G network using Skype for iPhone.
• The next version will also incorporate the call quality indicator, a very useful tool found currently in the Skype for Windows 4.2 beta release.
• Skype for iPad is under consideration; given Apple’s claim that all current third party iPhone apps should run on the iPad, this should not involve too much change other than adapting to the larger screen size.

Here’s the video:

Skype for iPhone has bailed me out for voice calling on my recent trips to the U.S. for CES 2010 and IT Expo. During both events several calls from outside parties to my BlackBerry resulted in very poor call quality when roaming over the AT&T network. As a result I had to ask the calling party to hang up and called them back using Skype for iPhone (fortunately I was in a WiFi access point’s range). And the call quality was more than acceptable in each case. Just reinforces my point last spring about WiFi becoming a stealth carrier.

What will be real interesting is how much data traffic is generated by calls over 3G:

• Will it be the application to cause me to take full advantage of the 6GB data plan (for Canadian access) on my iPhone where my usage currently runs under 100MB per month?
• What will be the impact on roaming data plans and the resultant charges?
• While there is no doubt that Rogers, Bell and Telus will be able to handle the additional data traffic load in Canada, will Skype for iPhone over 3G be the application that brings down AT&T’s network in the U.S? (Especially if they can’t deliver good quality voice calls on their voice channel – see above.)

One final question: Does “real soon now” mean prior to or during the upcoming Vancouver/Whistler 2010 Winter Olympics that start in nine days (Feb. 12)?

Thanks to Skype’s Chief Blogging Officer Peter Parkes and David Ponsford for the update.

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Two announcements yesterday, when meshed together, create the setting for Skype to become, de facto, the ‘”unofficial” personal communications software provider for the 2010 Winter Olympics at Vancouver and Whistler, B.C. next February:

Skype President Josh Silverman today posted: “Good Move AT&T”:

Since launching our iPhone application six months ago, people have downloaded and installed Skype on 10% of all iPhone and iPod touch devices sold – making it clear that people are extremely interested in taking Skype conversations with them on the go.

All of us at Skype applaud today’s announcement by AT&T (in an FCC filing to be published shortly – update, it’s here in PDF format) that it’ll open up its 3G network to Internet calling applications such as Skype. It’s the right step for AT&T, Apple, millions of mobile Skype users and the Internet itself.

Bell Canada’s Mobility service and Telus yesterday announced both the launch of their new joint-venture HSPA+ network across Canada next month and their agreement to be selling Apple’s iPhone amongst other 3G/GSM phones such as Nokia’s line. In fact, as shown on the right, the existence of the new network, with the identifier “302880”, can already be detected via the iPhone’s Carrier settings .

The implications of this announcement:

• Bell Mobility and Telus expect their HSPA+ network to completely replace their current CDMA/EV-DO network within five years.
• Bell Mobility and Telus will be providing direct competition to Rogers who, to date, has been the sole GSM carrier in Canada and will be able to offer a full range of 3G GSM phones – not only the iPhone but also Nokia’s GSM-exclusive line of phones.
• As a benefit of their current monopoly Rogers has also been the only carrier offering Apple’s iPhone since its Canadian launch in July, 2008. Canada now becomes one of the few countries with multiple carriers offering the iPhone.
• As another benefit of their GSM monopoly Rogers has been the sole network available for roaming by visitors from outside the U.S. and Canada as well as AT&T and T-Mobile customers from the U.S. Since athletes and visitors coming to the Vancouver Olympics from outside North America will have GSM phones, Bell Mobility and Telus will now be able to draw away from Rogers a significant portion of the roaming business that otherwise would have accrued by default to Rogers.
• Bell Canada is the “official” communications carrier for the 2010 Winter Olympics and Paralympics. Bell Mobility has built out their new HSPA+ network from the Telus network connection in Vancouver along the Sea-to-Sky highway to Whistler, site of the alpine and cross-country skiing events as well as bobsleigh, luge and skeleton “sliding” races.
• Additional communications capacity between Vancouver and Whistler has been built by Bell Canada for Internet communications, the 35 to 40 Mbps voice and data backhaul required for each of the wireless towers and the HD 5.1 surround sound television coverage that will include all events. No doubt a lot of fibre has been installed as BC Highways rebuilt the Sea to Sky Highway over the past few years to meet the Olympics’ inherent demands both additional vehicle capacity and enhanced safety. Being the “official” carrier this will benefit Bell Canada’s revenue stream also.

This raises the question of whether an HSPA-only service can run on the iPhone or BlackBerry Bold both of which currently only support 3G. The answer is Yes; HSPA will support 3G devices.

However, an HSPA+ network can only fall back to a 3G network capability when full HSPA capability is not supported by a device. But the iPhone and BlackBerry Bold also support 2G/EDGE networks.

As a result should a Bell Mobility or Telus customer leave an HSPA+ coverage area, there is no EDGE available for fall back when outside these areas. For example,when we drive the freeway from Toronto to Ottawa, we see EDGE for most of the trip except near Toronto, Kingston and Ottawa where Rogers 3G coverage exists. Either Bell and Telus will require roaming agreements with Rogers to provide non-urban service or they will not be able to offer as complete coverage to their customers.

Of course, those landlines will be able to support Skype on laptop PC’s using Ethernet or WiFi connections. But combining the two announcements along with Skype for iPhone’s recent availability in Canada, can Skype become the overall de facto “unofficial” personal communications software provider for the 2010 Olympics? Questions to be answered:

• Will Skype release a version of Skype for iPhone that supports both WiFi and 3G as the underlying wireless protocols prior to the Olympics?
• Will Skype finally release Skype for BlackBerry? (to address Phil’s desire for Skype on a multi-tasking smartphone)
• Will we see execution on Skype’s agreement with Nokia?
• Will the various communications and “Internet cafe” rooms for athletes and press be equipped with enough power sources to keep the various smartphones charged conveniently?
• Will Bell Canada have the same policy re Net Neutrality as Rogers who has publicly stated their primary business in providing Internet access and not managing applications or specific customer uses?
• Has Bell Canada signed the appropriate international roaming agreements with carriers around the world?

Certainly it’s within the realm of current technology to support Skype over wireless networks, whether WiFi or wireless carrier. Bell Canada touts their 2010 Olympics commitment as being “The first all-IP Olympics”. The question that remain:

• To what extent will the Skype ecosystem actually be able to execute on, and take full advantage of, this underlying IP-based communications infrastructure?
• Will Skype’s popularity, ease-of-use and combined voice/chat/video feature set make it the de facto “unofficial” voice, chat and video personal communications software provider for the 2010 Winter Olympics and Paralympics?

Call it Skype Everywhere by Stealth…. but can Skype execute on the challenge?

Disclaimer: Bell Canada, including its Bell Mobility wireless business unit, is the official communications services provider for the 2010 Winter Olympics. Skype is a software application, with over 500 million registered accounts worldwide, that uses these communications services for the purpose of voice, instant messaging and video conversations; however, Skype is in no way affiliated with, or endorsed, by the 2010 Winter Olympics Committee.

Full disclosure: For over thirty-five years the author has personally observed the growth of Whistler from a small and remote “boutique” ski area with one tragically slow 4-person per cabin gondola lift and a few double chairlifts into North America’s number one rated ski resort covering two mountains and capped off last year by the opening of a 4.4km peak-to-peak gondola that takes riders as high 436m above the valley floor. Concurrently the Sea-to-Sky highway has grown from a twisty, up-and-down adventure (and risky) roadway with some sections on wooden platforms on stilts anchored to rock walls over canyons to a safe multi-lane, yet still scenic, roadway. (I still consider it one of Canada’s most scenic highways.)

• A fully redundant fibre-optic network between Vancouver and Whistler to support essential broadcast traffic. Bell has successfully laid fibre to the front door of every major Olympics and Paralympics venue, and will ultimately connect all of the 130 competition and non-competition venues to our dedicated Olympics network
• Bell’s fibre-optic network will provide all voice, data and broadcast services for fans, media, athletes and officials from around the world, and will be the backbone that enables all Olympics and Paralympics connectivity. This includes 400,000 private radio calls, 10,416 hours of dedicated TV broadcast coverage to more than three billion viewers, timing and scoring results delivered in the blink of an eye, and more
• The highest level of reliability and redundancy and the most up-to-date technology for the full range of Olympics telecommunications services, including voice, data, broadcast video and audio, wireless PCS and private radio
• Provision of all hardware, cabling, logistics and support staff
• An unprecedented level of support to the Rights Holding Broadcasters, in particular the Broadcasting Service for the Olympic Games
• Internet portal services enabling an interactive, multilingual window to Canada and the world
• The first all-IP Olympic Games
• All built to minimize environmental impact by co-locating equipment to minimize footprint, coordinating construction schedules to reduce waste and using IP-based technology to dramatically reduce cabling and infrastructure needs

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On a recent trip to Spain, where I turned off my BlackBerry Bold’s and iPhone’s  mobile carrier network connection except when really required, I was able to use WiFi connections at my various hotels quite effectively to keep up with my “data” activities on these devices. (Except in a situation mentioned below I used Skype on my PC for voice calls.) But there were two situations I encountered during this trip which really hit home the message that WiFi is becoming as important as mobile carrier offerings for wireless smartphone communications:

• In one instance, two Canadians, who had stealthed Skype for iPhone onto their iPhones, used a Spanish hotel’s WiFi service to make Skype voice calls between each other, almost as if their iPhones were “walkie-talkies” while on the hotel’s grounds. No roaming charges for these calls.
• In another case, I spent one night in a hotel room, in a recently renovated 8th century building, that had no landline. But it had a WiFi service available; I used Truphone on my iPhone to make a couple of voice calls. (The price of staying “legal” in Canada is not to have Skype for iPhone installed.)

The trip, combined with my WiFi experience during a March vacation trip to South Carolina, significantly reinforced my belief that WiFi is becoming the potential “stealth” carrier in the smartphone communications business. But what does that portend for the future?

Friend Andy Abramson, in a post Rumored New Apple iPod Touch Will Be Huge for VoIP, Multimedia, has pointed to the rumors of a new iPod Touch that will include a camera, a built-in microphone and 64GB of memory:

This is awesome news for the likes of Skype and client Truphone and will likely start a flood of “me too” applications from the likes of Cablevision who operates a WiFi hot zone in the New York area, Clearwire and Comcast who are chasing customers in the Portland area with WiMax and elsewhere as the WiFi capability of the iPod touch means its a mobile phone without the mobile phone bill and contract connected to it, something Jeff Belk, the former Senior VP of Strategy at Qualcomm discussed in Unstrung in February of this year.

And where does he see the disruptive uptake?

…. Within two key categories:

1) Pre-teens who need a phone but can’t afford a contract

2) Travelers who don’t need to be “always on” but want to stay in touch cost effectively.

Who benefits from this? Anyone with a travel router to sell, including Apple. Toss a travel router in your bag, and stay in a hotel with wired broadband to your room, and logging on is a snap.

As pointed out in the introduction to this post, I think I was already well into Andy’s category 2 during my Spain trip. Alec Saunders, in Will the new iPod Touch unleash VoWiFi? I’ll wait and see, sees WiFi as a “backup” to 3G network but pipes into the road warrior discussion with:

Travelling, however, is a different story.  As Andy notes, you can talk for free on WiFi when you’re travelling, versus whatever the outrageous roaming rate that your carrier might charge.  Savvy travelers use products like Truphone and Skype to avoid roaming charges.

Bottom line: users will continue to look for the combination of access and cost that serves their immediate need. While in Canada, I never run over 1GB of data on my BlackBerry Bold and have a reasonable cost voice subscription for voice calls; thus my mobile carrier costs are not a particular concern. But when I leave Canada, I will look to use any wireless service that avoids the last bastion of excessively high mobile calling costs: roaming charges.

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• Skype Without a Personal Computer (voiceontheweb.biz)
• WiFi: The Real Threat to the Mobile Carriers (voiceontheweb.biz)
• Skype 101 for Carriers: A “Voice On The Web Primer” (voiceontheweb.biz)

The past Monday/Tuesday/Wednesday I attended my first Canadian Telecom Summit – where Canadian telecom carrier and vendor executives have an opportunity to provide an overview of their goals and directions encompassing both recent accomplishments and future plans. Overall many of the speakers succeeded; however, there are still a few telecom executives who want to preach motherhood. The audience comprised a mix of participants in the Canadian telecom ecosystem including both national  and  independent carrier management personnel, telecom business consultants, regulatory body staff, financial analysts and service providers amongst others.

Some highlights:

Building out a national broadband infrastructure (wireless and wireline). While the country can be considered “covered” with broadband and 3G wireless access, there are a multitude of private companies who have invested several billion dollars to build this infrastructure. Bell Canada, Rogers, Telus and MTS Allstream are the major carrier players but there are several regional or local private operations providing backbone to vertical or regional markets, (Atria Networks, Hydro One Telecom and Internetworking-Atlantic are some examples.)

But doing the interconnect between these players, especially at the wholesale/retail interface, is governed by CRTC regulation. A “regulatory blockbuster” forum, encompassing the heads of government relations for four major carriers and a public policy advocate, brought out several of the issues and conflicts from the participants’ perspective. Multi-billions of dollars are being spent this year to build out fiber and wireless infrastructure. Shareholders want to see return on investment; business and consumer customers simply want value for their charges independent of how the connection is routed. CRTC personnel were in the audience but there was no indication as to whether they heard anything new.

Customer Expectations: Simply put, several of the presenters focused on the customer as the primary consideration and marketing target when it comes to developing services. Lots of talk about how the user experience is changing and will change with the range of new services available via mobile data/Internet. However, execution is the challenge.

From comments by various Rogers personnel related to Net Neutrality (separate post) through to the demonstration of user-friendly interfaces that aggregate local and cloud-based personalization of a mobile device the conference covered a range of end user issues. Both the Palm Pre and Comverse demonstrations provided specific examples of how such aggregation can work to the user’s benefit. Microsoft’s “Surface” table demonstration was pretty amazing but it can only become a consumer experience with a significant price drop from the stated $12,000.

It’s about bringing broadband speeds to mobile services: One common theme across most of the presentations was the exponential growth of user demand for mobile services across the data networks. RIM co-CEO Mike Lazardis used physics as the basis of his talk about the future need for more wireless data network capacity through not only additional spectrum but also scalable applications and, based on an inherent strength of BlackBerry devices since their introduction ten years ago, effective wireless data compression to reduce bandwidth demand.

Rogers Chief Strategy Officer Mike Lee pointed out that current investment in wireless and fiber infrastructure dwarfs all other investment in Canadian ICT combined. Four outcomes that I have experienced this year as a result of these investments: launch of their 7.2 Mbps HSPA wireless service reaching 75% of the Canadian population; fiber-to-the-node installed to my neighborhood cable head, 3G service to two central Canada resort areas which I frequent and, most importantly, a robust, stable 3G service compared to my AT&T 3G roaming experience.

The disconnect: However, I also felt a major disconnect with the emerging communications opportunities being discussed at conferences such as Lee Dryburgh’s eComm Conferences and Jeff Pulver’s recently launched HD Communications Summit. Innovative applications, communications enhanced business processes and the productivity benefits of HD Voice were amongst the subjects NOT discussed at Canadian Telecom Summit. Innovative yet profitably successful services such as Voxeo and Jaduka ride over the carrier networks. Yet the Canadian Telecom Summit was an opportunity missed; it had the audience that needs to hear these stories and to build awareness of the services required to facilitate sustainable revenue streams at the carrier level.

Friend Thomas Howe, CEO of Jaduka and more commonly known as Mr. Mashup, puts it succinctly in a recent post, The Sophomore Slump, concludes with:

My suggestion is simple: instead of putting out another solo album, today’s operators need to team up with other musicians. They need push out of their current ecosystem and into others, showing how voice and communications can make other applications better.

…….

The challenge? Operators need to step back from the spotlight, and give somebody else a turn at the microphone. Operators need to admit that they are not expert at anything other than real time communication. The most rational path is for the carriers to partner with others companies that bring other talents and values to the table, [rather] than to use what operators do best to extend their partner’s offerings.

Bottom line: Canada continues to lead the world in delivering communications over a large geography but with relatively small pockets of population. But, instead of hearing oft-stated platitudes about the need for increased business communications, let’s hear about specific examples where enhanced communications applications and services can deliver true productivity enhancements to the both enterprise operations and the end user while bringing significant benefits to our social communications.

Suggested reading: Thomas Howe’s various posts on The Jaduka Exchange – a primer on new telecom services in action. Especially relevant: Unified Communications? No, CEBP.

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• Bell, MTS at odds in separate appeals of CRTC rulings (cbc.ca)
• Rogers defends wireless pricing (thestar.com)

We all know that Skype for iPhone currently requires that you be at a WiFi access point in order to make a Skype call from the iPhone, even though it supports 3G data. So, when highly respected technology reporter Larry Magid, attending today’s D:AllThingsDigital conference, sends out the Tweet, shown to the right, quoting AT&T CEO Randall Stephenson, many questions arise:

• Has AT&T heard that Skype really provides communications software? I think that is the message that Skype President Josh Silverman has been trying to deliver when he states, “software will drive the future of real time communications innovation and efficiencies going forward, not the existing telcos”
• Is failure to allow Skype for iPhone to run over AT&T’s 3G network a tacit admission that AT&T continues to suffer from 3G data network capacity and quality issues? Once again my most recent trip roaming on AT&T in Chicago four weeks ago demonstrated nothing to say service availability and robustness has improved over my previous experiences in PA, WV, VA, NC, SC, CA and NV.
• Is AT&T’s response to SlingPlayer Mobile for iPhone (or BlackBerry) one more challenge to, or subtle admission of, AT&T’s network quality and robustness issues. Is the following statement a cover-up for their failings:
  

  “Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network,” an AT&T representative said in e-mail to reporters. “The application does not run on our 3G wireless network. Applications like this, which redirect a TV signal to a personal computer, are specifically prohibited under our terms of service.”

I would invite Mr. Stephenson to Canada where I can demonstrate Rogers’ high quality 3G GSM data network that:

• has robust and reliable 3G data coverage in not only major population areas but also all our major tourist and recreation areas (Whistler, Central Ontario, Tremblant, etc.)
• is always there when I expect it
• has no issue with using SlingPlayer Mobile for BlackBerry (and has made no issue with SlingPlayer Mobile for iPhone either)
• Rogers is offering its Rocket Stick mobile data service over its  7.2Mbps 3.5G HSPA network, placing additional demand on their network capacity.

Bottom Line: Sorry, Randall, but AT&T has a long way to go to show that they understand the real potential of, and that they’re serious about, their mobile business.

For more amusement check out John Paczkowski’s report on Walt Mossberg’s Q&A with Randall Stephenson at D7.

Update: Om Malik reports this afternoon at GigaOm: AT&T Moves Up Its LTE Rollout, Admits To Network Issues. Seems that AT&T is finally admitting they have some issues to address.

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• WiFi: The Real Threat to the Mobile Carriers (voiceontheweb.biz)
• SlingPlayer for iPhone Arrives…Partly (netnewsdaily.com)
• AT&T Says Its Network Can’t Keep Up With All The Cool Stuff You Can Do With The Smartphones It Sells (techdirt.com)
• AT&T Uses Semantics to Justify Locking Down SlingPlayer For iPhone [At&t] (gizmodo.com)
• Canadian Experience with Skype Access and Boingo WiFi (voiceontheweb.biz)

Hutchison-Whampoa’s 3 service in the UK has been the pioneer in offering Skype access and other data-based services, such as SlingPlayer, at low cost. For as little as £10 per month, one could have almost unlimited Skype calling and text messaging on the Skypephone and other selected mobile smartphones. Already 3 has said they are delivering over 1.5 million minutes of Skype-to-Skype calling per day. However, earlier this week 3 announced they were pushing the envelope for free Skype calling even further.

Effective May 1, 3 subscribers will be able to purchase a special 3G SIM card which will allow the user to download Skype software and start making calls to Skype users worldwide with no minimum monthly payment obligations. Come summer 2009, 3 will expand the availability of this offer; from the same press release:

During the summer, 3 will expand its offer making it possible for anyone with a compatible unlocked 3G handset in the UK, to take advantage of free Skype calls, whether or not their phone is from 3. Anyone that wants to talk on a mobile for free will be able to use a Skype-enabled 3 SIM to make and receive totally free Skype-to-Skype calls and to use Skype’s instant messaging (IM).

Basic cost of the SIM will be £1.99; revenue will be generated via associated pay-as-you-go or 3’s other mobile phone services contract offerings. In addition new subscribers will have to purchase one of the supported phones, such as a Skypephone 2 (or, later this year, a new Skypephone 3 which is speculated to have a QWERTY keyboard).

According to 3’s website, their focus from the beginning has been to provide services built around their purpose-built data network using the HSDPA protocol. And, of course, any VoIP-based service requires a high speed data network. However, questions remain:

• What will be the impact on handset battery life? This has been a major factor hindering the provisioning of VoIP over 3G networks.
• Will this service be available to 3’s UK customers when they are roaming in other 3 countries, such as Austria, Denmark, Italy, Sweden and Ireland?
• Which smartphones will be able to take advantage of the expanded offer coming in the summer? Does this mean i can bring my BlackBerry to the UK, buy the 3 SIM, and have free Skype-to-Skype calling while in the UK (or even other 3 countries) and using 3’s service for other calling, messaging, email and browsing requirements?

A hint of 3’s business reasoning is given further down the press release where they provide some information on existing services:

3 UK has found that regular Skype users:

• Are less likely to churn than non-Skype users
• Use more traditional voice minutes than non-Skype users in addition to calling their Skype contacts
• Use Skype IM, but also send more SMS than non-Skype users
• Are more likely to browse the internet on their mobile
• Are higher margin customers
• Are twice as likely to access social networking sites as non-Skype customers

In addition, with the support of SkypeOut calling from 3’s various Skype-enabled phones, one can expect that 3 will share with Skype revenues resulting from SkypeOut minutes generated by this change in services.

3 is also lobbying within the EU for reduced termination charges and “fair pricing for roaming”. In practice they are really pointing out, very pragmatically, that a wireless carrier can generate significant customer recruitment levels, satisfactory revenues and improved ARPU when adopting Skype support with properly structured services.

Which raises a cost advantage of 3’s obligation-free Skype-to-Skype calls and chat messaging: there are no termination charges involved. Skype’s secure peer-to-peer technology has essentially eliminated the need for termination charges along with the associated business development, call record tracking and billing infrastructure costs.

At last fall’s Mobilize 08 Conference organized by GigaOm, 3’s Frank Meehan, Director & GM, 3G Handset and Application Group, stated (hat tip to Om for the reminder):

The Skype phone makes us more margin than any other phone in pre-paid with the exception of the iPhone. About 65 percent of the UK market is prepaid and only 5 percent of those are using data. Smartphones are not as relevant. We also have a massive churn in prepaid in all markets where prepaid exists. So we basically told people, if you spend 10 pounds a month and top it off every month, you get Skype for free. That’s driven incredible loyalty to the device. We have a huge level of top-offs and we’re seeing growth on voice and text on those devices.

3 is certainly providing wireless carrier leadership in the adoption of Skype as a mobile accessible service, demonstrating that there is a business model for the wireless carrier that not only drives subscriber recruitment but also can generate increased ARPU (and revenues) while lowering the overhead costs associated with supporting international calling. Would it be fair to also say that it has the potential to drive down international roaming charges?

Other posts:

• GigaOm: GigaOm: 3 of UK Marries Itself to Skype; Shakes Up the Mobile Market
• Andy Abramson, VoIP Watch: Skype Winning With 3? Actually It’s 3 Winning With Skype

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• Skype 101 for Carriers: A “Voice On The Web Primer” (voiceontheweb.biz)
• Accessing Skype on the iPhone and BlackBerry (voiceontheweb.biz)
• Skype COO Scott Durchslag Outlines Skype’s Mobile Strategy (voiceontheweb.biz)
• Skype Everywhere: Nokia and Skype Announce Ongoing Partnership (voiceontheweb.biz)

I follow several forums about Skype, for instance at LinkedIn and on eCademy. Recently I have noticed a thread on the LinkedIn Skype for Business Group asking about using Skype without a PC. While eventually I intend to have more detailed information in response to such a question in the reference content on this site, let me summarize what is available as of today. The sales channels for these products are largely through the Skype Store (which is country-specific). Unfortunately several players who had good offerings have abandoned their Skype hardware offerings over the couple of years; however, we are starting to see the emergence of new devices.

Mobile Phones

Update: March 1, 2010: Access to Skype on mobile smartphones has evolved to several platforms; there are several posts that provide an update to what is stated below:

• Skype for Mobile – Now Focusing on a True Skype User Experience includes a summary table of options, as of March 1, 2010, for running Skype on mobile smartphones.
• Skype for iPhone: Now Legally Available for Canadians

Update: May 30, 2010: Skype for iPhone now works over GSM 3G/HSPA+ networks:

• Skype for iPhone 2.0 Released: 3G Skype-to-Skype Calling to Require a Fee
• Skype for iPhone 2.0: The End User Experience
• Skype for iPhone 2.0: The Commentary and The Reality

Obviously the most popular is Skype for iPhone. With over 1 12 million downloads since its introduction in late March 2009 earlier this week, the major caveat is that you need either an iPod Touch (with a microphone accessory) or iPhone. In both cases you also need to be at a WiFi access point to take full advantage of Skype’s voice and IM features; however, you can also use Skype IM (presence and text chat) on the iPhone using a carrier’s 3G or 2G/EDGE data plan (but not voice). Currently Skype for iPhone is not available in Canada pending resolution of a patent licensing issue. Skype for iPhone does require that the application be open in order to received messages and Skype calls.

Skype Lite for Nokia has been replaced by Skype for Symbian.

Skype has also been developing Skype Lite for a wide range of Java-enabled phones, including the Nokia N- and E-series phones. Again one can use Skype IM (presence and text chat) for those phones that support a WiFi connection (such as many of the Nokia N- and E-series smartphones). But for voice, one needs a carrier for which Skype is setting up arrangements in ten countries. Skype announced earlier this week that a Skype Lite for BlackBerry will be available in May, 2009.

As mentioned in the first update post above, Skype for Windows Mobile has been withdrawn.

Skype for Windows Mobile has been available for several years, recently released version 2.5 and demonstrated the Skype for Windows Mobile 3.0 beta. They recommend its use via WiFi access points; however, its use on a Windows Mobile smartphone over 3G may have performance limitations, especially with respect to battery life.

If you are in one of the nine countries served by 3 as a carrier, you will find the Skypephone 2 available as well as a few other devices that supports Skype operation. Later this spring Skype will appear embedded into Sony Xperia X1 and new Nokia smartphones.

There are two third party solutions that I have used quite often: iSkoot (BlackBerry, several Nokia smartphones) and IM+ for Skype (BlackBerry, iPhone/iPod Touch, a few Nokia smartphones). On the BlackBerry they can take advantage of the inherent background processing to allow Skype chat sessions to remain active while executing other applications; they also require both a voice and data plan (2G or 3G GSM) in order to complete voice calls; chat sessions are supported over a WiFi connection.

There are several other third party offerings which provide Skype access, including Truphone (iPhone, BlackBerry, some Nokia models), Fring (iPhone, some Nokia) and Nimbuzz (iPhone). Suffice it to say that, while one can carry on conversations via these services while dealing with user interface, performance and/or call quality issues, the best service level is achieved from a service where Skype has full control of the software and network connections.

Skype’s strategy for mobile was recently outlined by Skype COO Scott Durchslag.

Dual Mode Phones

About two years ago several hardware vendors introduced dual mode PC-free phones that allow you to connect to both Skype via a broadband Internet connection and the PSTN. However, currently these devices are undergoing a transition as Skype restructures, the only phone that is readily available today is the Philips VOIP3211 which can be found for several countries via the Skype Store. Update, Fall 2009: The only dual mode phone that is readily available as of fall 2009 is the RTX 3088 Dualphone; feedback here. The one caveat for these phones is that they support voice and presence but have no chat capability.

IPEVO also offers their Skype Desktop Phone S0-10, which only provides Skype calling over an Ethernet connection into a router.

Skype Video Phone

I recently received an evaluation ASUS Eee Videophone AirGuru SV1, which provides support for both Skype voice and Skype video calling along with presence information (no chat). My few conversations with it have been quite satisfactory and the user interface provides easy setup of calls. Basically all operations are done via a five-way trackball where you have up/down/right/left to navigate and a central push button to perform an action. While it is basically a video speakerphone, there are headphone jacks on the rear.

To get started you simply plug it into an Ethernet port on a router or switch with a minimum broadband Internet service and enter the setup routine to provide your Skype account information. Optionally it also supports WiFi access if you are not attached via an Ethernet connection.

WiFi Phones

These are again available via the Skype Store with models provided by Netgear and Belkin that support voice and presence. I have never been a fan of the Skype WiFi phones, especially from a price/performance perspective, as they have very limited functionality and have found them to have battery life issues amongst other problems. But some people seem to like them. More recently IPEVO has offered their WiFi Phone for Skype S0-20.

Others

Skype can be found on the Nokia N800 and N810 N900 small tablet handsets; Sony Mylo and some Sony PSP models. However, these are examples of embedding Skype into a device as part of Skype’s “Skype Everywhere” strategy where conversations become one more feature of a specialty device.

Conclusion

“Skype without a Computer” is inherent in Skype’s new “Skype Everywhere” strategy recently outlined by the new Skype executive team. With the current restructuring of Skype where more mature business processes are being introduced to incorporate product marketing, build partnerships and spread the availability of Skype across many platforms, we can expect to see new “PC-free” Skype hardware coming out in the future. In their visioning statements, beyond mobile devices, they point out that we may see it attached to TV sets, automotive dashboards and embedded into other hardware.

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Having just come out from behind the rocks of West Virginia and spent all yesterday traveling, I arrived home to find that it has been confirmed that Skype will be launching an application on the iPhone tomorrow. The major point coming out of the announcement, aside from the conversation feature set, is that Skype for iPhone will require WiFi access to the Internet. A masterful stroke on Skype’s part, especially after my experience over the past ten days that involved 3200 km of driving, mostly on U.S. Interstates, and nine nights of lodging. Some key bullets to back this up:

• AT&T is just not a reliable 3G wireless network – full stop. I have reported on this previously involving trips to California and Nevada; Om confirmed it recently when he switched from iPhone and BlackBerry Bold on AT&T to Blackberry 8900 Curve on T-Mobile.
• When the best I can find is one bar (and not always) at a major tourist destination with over 2 million visitors per year, Skype could not rely on AT&T to deliver anything close to the current experience Skype and iSkoot are having on the 3 networks in nine countries.
• T-Mobile actually had more bars than AT&T on Hilton Head Island but only two at best; of course an iPhone will not work over T-Mobile.
• AT&T coverage along the Interstates varied from zero to full 3G, but with the latter only near major cities (as to be expected). It was the intermittent 2G/EDGE coverage along the Interstates that was very frustrating. (I can drive along Ontario’s major freeways with no service interruptions, whether 2G or 3G.)
• WiFi access points are becoming pervasive. Every hotel along the route was advertising high speed Internet connectivity (usually WiFi); most restaurants also had WiFi access, including one at a New York State Thruway rest stop. Our primary lodging had individual access points for each unit.
• I used my Boingo account at one overnight hotel for access without a hotel WiFi charge.

My WiFi experiences during the week (all at no additional cost):

• the major connection for both my Windows laptop and MacBook at our accommodation
• Making Skype video and voice calls from the Mac Book
• Downloading and installing the final release of SlingPlayer Mobile for BlackBerry
• Updating iPhone applications
• Following an NHL hockey game of interest via SlingPlayer on my BlackBerry Bold using my NHL Center Ice cable subscription
• Making Skype calls and PSTN calls via Truphone for iPhone (but with echo cancellation issues on the Skype call and termination issues when calling the PSTN).
• With Boingo, avoiding additional WiFi charges at one of our overnight stops during the trip down.

Not only did WiFi make these applications possible; there were no (Rogers) roaming charges for a Canadian traveling in the U.S. At $6/MB (and when I had an AT&T signal), I limited my use on wireless GSM networks to checking GMail headers, following Twitter via SocialScope and, during our trip home, finalizing a hotel reservation as we neared our overnight destination (and this exercise involved waiting for coverage at some points as we traveled along the I-79 through West Virginia’s mountains).

Boingo will be a major benefactor of this trend; their relationships with major hotel chains, airports and restaurants contribute to this trend and provide an account that minimizes charges. Having clients on Macs, Windows PC’s, Nokia smartphones and, currently in alpha phase, BlackBerry again improves the user experience making the technology transparent to the calling protocol.

One difficulty continues with WiFi: access at high usage locations such as conventions where capacity limitations come into play.  Ultimately it reinforces that WiFi still needs to address scalability issues.

Bottom line: WiFi is stealthing its way significantly into the wireless picture for fixed point access to the Internet by road warriors. Of course its speed and robustness features are additional benefits.

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Whenever I travel to the U.S. I am careful with usage of my BlackBerry Bold for voice calls; there’s a $0.95 per minute roaming charge for any use of it on the AT&T or T-Mobile network even before any long distance charges are considered. Calls back to Toronto from California will result in a total charge of $1.75 per minute. And, at $6.00/MB for data usage, I try to maximize my data activity via WiFi access points in hotel rooms, airports and conference press rooms. And, when I go to Mexico or Europe I look for any opportunity to make voice calls over Skype and access data services over WiFi; in fact, in Mexico, one is advised to turn off the BlackBerry. Roaming charges will easily clean out your wallet.

Recently a Los Angeles Times reporter was referred to me for more information about how he could avoid “roaming charges billing shock” in the future. He had just received a $400 roaming charge billing for using his iPhone over the Rogers network during a weekend trip to Vancouver, Canada.

At one of Andy Abramson’s famous Blogger dinners, held during a recent conference, roaming charges were identified as the number one cost issue and arbitrage opportunity existing in the wireless services market today.

Today Truphone, who has continuously demonstrated innovation in low cost wireless calling, announced their forthcoming Truphone Local Anywhere service at Mobile World Congress. From the press release:

The introduction of Truphone’s multi-country, single-SIM service will change the current experience of people with an international lifestyle.  Their mobile experience is currently characterized by frustration, brought on by constantly having to juggle multiple SIM cards and mobile phones in order to minimize their mobile costs.

In an interview with Truphone CEO Geraldine Wilson, she highlighted four key benefits of this service. On a single handset a Truphone Local Anywhere subscriber can:

• have a local number whenever travelling in a supported country
• make calls anywhere in the territory of participating carriers at “local” rates
• make international calls at reduced costs
• eliminate or minimize ”roaming” charges at most destinations

But there is also a benefit to people calling to a Truphone Local Anywhere subscriber. Personal and business calls to the subscriber can be made via the subscriber’s “local” number for the location from which the call is being placed.

Other issues:

• All numbers will be “mobile” numbers, capable of supporting SMS messaging and data activity
• The default callerID seen by the called party will be the call destination’s “Local” number but the displayed callerID can be managed to display other numbers available to the subscriber
• calls to other Truphone Local Anywhere customers will have the lowest calling rates

Geraldine was quite specific in stating that the target market includes mobile professionals, travel industry employees, expatriate workers who need a “local” number in both their home country and “on the job”, and international students. According to Geraldine, this “road warrior” market encompasses 300 million today, making over 700 million trips per year.

Why an announcement now at Mobile World Congress? While Truphone has already signed some carrier and service provider agreements for this program, they are seeking out additional carrier and MVNO partners to build out a worldwide network.

As for the infrastructure behind this service:

• the customer will receive one SIM that supports service providers in all countries
• it is a scalable, plug-and-play solution
• a customer will be able to add another carrier or service provider to the SIM over-the-air
• Truphone is seeking out non-traditional distribution channels
• it will have full data compatibility

Bottom Line: if Truphone can pull off a sufficient number of service provider relationships worldwide, Truphone Local Anywhere will have the same friction-free impact for travellers’ mobile communications activities as the introduction of the Euro provided to European travelers, eliminating the need to stop by an “exchange counter” when arriving in every country.

Update: Jon Arnold: Truphone Launches Local Anywhere Service

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While returning to the home office from my workout yesterday morning, before I started driving, I pulled out my Blackberry 8820, selected the iSkoot icon to open iSkoot (which auto logs into Skype), selected a Skype contact in the U.K., clicked on Call, heard a message asking me to “please wait while the call is completed” and within seconds I was talking to my contact in the U.K.

We talked for 15 minutes (over my nXZen Bluetooth headset for obvious safety reasons). A simple, straight forward, familiar user experience — total cost was a 15 minute charge against my Rogers wireless monthly subscription for a local call (from iSkoot’s Toronto POP to my phone). Even the callback operation itself was transparent to the user. In fact, it meets my “Truphone test” for user experience: Look up a contact in a device address book, select which phone number, press the Call button and the call is connected with no further user action.

If this sounds similar to the 3 Skypephone experience, it is. In my case the Skype button is replaced by the iSkoot icon on the Blackberry. Bottom line is that whether via 3 Skypephone or my Blackberry over Rogers a connection is readily made and there are minimal, if any, charges. And it is a very familiar user experience, comparable to making wireless calls via the service provider’s native (GSM) voice network. (Photo above: Blackberry 8820 running iSkoot and Skypephone together at Fall VON session on Goin’ Mobile with Skype.)

Since the introduction of the 3 Skypephone two weeks ago I have seen many commentaries attempting to find issues with the offering. Very simply stated the 3 Skypephone offers:

• Free Skype-to-Skype calling worldwide, reducing or eliminating international long distance charges, provided your contact is also on Skype (on any platform)¹.
• Free Skype IM (presence and chat)
• Unlimited Internet browsing

provided you contract to purchase a monthly minimum of £12 of traditional voice and SMS text messaging services from Hutchison Whampoa’s 3 Service. on an 18 month contract; the phone itself is then free. Alternatively you can purchase the Skypephone for £49.95 and do a minimum £10 monthly Pay-As-You-Go top up.

The Skypephone hardware is a quad-band GSM/UMTS² phone over GSM/EDGE 2G and GSM/UMTS 3G networks. It includes a 2MP camera and video camera along with music services including a (MP3) media player as well as a voice recorder. Think of the additional Skype button as an iSkoot icon on any other iSkoot-supported device such as the Blackberry 8xxx’s and Nokia N-series phones.

Fundamentally, the 3 Skypephone is a promotion to encourage generation of traditional mobile voice business over the 3 network. As a result there is no SkypeOut included whereas with iSkoot I can access SkypeOut numbers. In fact the lack of SkypeOut on the 3 Skypephone service will virally encourage Skype adoption by users’ contacts who are outside the 3 network service areas.

A key benefit of the 3 Skypephone to the rest of the mobile user world is that it is a pioneering carrier-supported service that threatens to be another crack in a disruption of the traditional mobile voice service business models.

Using my Blackberry I get my equivalent voice service with only the requirement to have a Rogers wireless subscription for a set number of minutes per month (I am not on contract at the moment), which I need anyway.

But there are some other comments in the blogosphere that also can affect the user experience³:

1. Having the Skype client on a server (and not on the Skypephone) means longer battery charge lifetimes for the mobile device and a more robust, carrier grade overall platform for connecting to Skype.⁴
2. Roaming on other networks is expensive regardless of your carrier. In fact, this was the number one issue discussed at a recent blogger dinner at Fall VON.
3. Should you have a Blackberry 8xxx or Nokia N-Series phone you can install iSkoot and have a similar user experience on any GSM network worldwide. In fact, 3 itself encourages the use of Skype for their X-Series customers using any of the Nokia: N73, E65, 6120 and N95; Sony Ericsson: W950i; or LG Shine U970 smartphones.
4. UMA/GAN provides an alternative path to low cost, familiar voice calling through its seamless transition of voice calls and data between GSM/2G/3G wireless and WiFi access hotspots.
5. Whether using VoIP or UMA/GAN carriers will still want to have some revenue generating plan, even if it is fixed rate. Both 3′s Skypephone offering with the promotion described above and T-Moible USA’s Hotspot @ Home unlimited use, but fixed rate, service represent the type of plan we can expect to see going forward.

There are three advantages to using the Blackberry 8820 and iSkoot:

• Having a QWERTY keyboard makes it a much easier to enter text messages, whether in Skype IM or SMS
• The WiFi inherent to the 8820 (or 8320 Curve) can significantly reduce carrier data plan usage, especially important when your carrier has no “unlimited” data plan.
• Blackberries inherently have the best battery management and charge lifetime of any mobile devices.

The only issue I cannot fully address is the Skypephone’s voice quality. Certainly the Blackberry-based call I made was limited to the <~3 kHz audio bandwidth of a cell phone and did not inhibit the conversation. Until I know the voice engine within the Skypephone and with no experience using it, I cannot comment. (Link to an experience using Skype on a mobile device with a wideband voice engine.) However, the reviews linked below speak favorably of the voice quality.

Bottom line: it’s the user experience that matters. In architecting the service its goal has to be ease-of-use, robustness and reliability along with a service plan that will be very attractive to generating customers. Using my criteria for evaluating mobile Skype services, it stands up quite well in both in terms of features, especially Skype features, and the user experience. And may it contribute to driving lower mobile user costs for both voice calls and mobile web activities.

Related posts:

• Time Online: On test: the 3 Skypephone

The other great feature of the phone is the ease of use. You sign in on the handset with your Skype account details at the outset. This takes less than a minute. Once signed on, you press a single Skype key and the screen shows all your contacts and their status, exactly as you would see on your computer. You can use Skype to chat or call them. Pretty simple.

• Technical Itch: 3 Skypephone Review

The Skype phone is all about free phone calls, and opening Skype to a whole new mobile audience, and for that purpose it does a good job. With a sub £50 price tag on PAYG it represents great value for money.

• A Primer for Skype’s Direction: Mobile Conversations

¹ Note there is a cap of 10,000 IM messages per month (333 messages/day) and 4,000 Skype minutes per month (2 hour 20 minutes/day). With a T9 keyboard you would be hard pressed to generate 100 chat messages per day.

² 900 MHz, 1800 Mhz, 1900 MHz GSM and 2100 MHz UMTS. Without the 850 MHz band, it is not suitable for North American GSM use. Yes, as evidenced by the photo above, I saw a Skypephone running on AT&T while at Fall VON.

³ Normally I would refer to a press release received by many bloggers in the past couple of days but in this case the release was quite pretentious and misinformed with the result that I don’t want to give it any publicity that it really does not deserve.

⁴ Today a very significant portion of all long distance calls use VoIP at some stage in the connection between end points; the carriers just don’t want to announce that they too have figured out how VoIP can reduce their service costs. The key here is that the VoIP interface does not have to be on the end point device to achieve a cost saving, whether for the user or the carrier.