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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• Skype Pushes iPhone 3G Voice Fees Until 2011 (iphonesavior.com)
• Skype 2.0 for iPhone: Is it worth subscribing for 3G VoIP calls? (reviews.cnet.com)
• Skype on the iPhone Goes 3G … Finally (gadgetwise.blogs.nytimes.com)
• Skype on 3G mobile impresses (saunderslog.com)
• Skype on Mobile over 3G: A Skype Video Calling First Experience (voiceontheweb.biz)
• Voice and Chat over iPad: Skype and Truphone Fill the Gap (voiceontheweb.biz)
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• Skype’s SILK Codec: Working Towards Adoption as a Standard (voiceontheweb.biz)

While the FREETALK Connect all encompassing PBX announced at IT Expo last Wednesday changes the economics of small business communications, it also provides a platform around which third party applications can readily be built and integrated.

Thursday saw the announcement of the FREETALK Connect Alliance, comprising thirteen charter members plus FREETALK that covers applications from conference calling to communications enhanced business processes.

Charter members include:

• AbbeyNet/Sitofono (Italy)
• Cloudvox (USA)
• FlatPlanet Phone Company (Israel)
• FREETALK (Spain)
• IfByPhone (USA)
• In Store Solutions (Hong Kong)
• Iotum/Calliflower (Canada)
• Jazinga (Canada)
• Skype (Luxembourg)
• Tatung (Taiwan)
• Thomas Howe’s Light and Electric (USA)
• Voxeo (US)
• Voxygen (UK)
• Voxbone (Belgium)

What stands out amongst all these members is their previous experience either contributing to, or developing, applications envisioned by Alec Saunders’ Voice 2.0 Manifesto more than three years ago. IVR infrastructure, conference calling, worldwide DID number provisioning, voice broadcasting and other hosted services are amongst the strengths brought into the consortium. FREETALK is continuing to recruit additional members whose bottom line is to deliver innovative applications that deliver new business opportunities to their customers.

Expect to see an entire ecosystem of products evolve around the FREETALK Connect with its inherent support of Asterisk, SIP, Skype and Skype for SIP working with the members’ existing API sets.

Full disclosure: In Store Solutions, producer of the FREETALK line of Skype hardware, has become a client of Denali InterConneXions, publisher of Voice On The Web, building on the author’s previous business development experience with establishing partnerships that can assist with the promotion of a primary vendor’s offerings. A more complete statement will follow shortly.

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At eComm Spring 2009, Skype executive Jonathan Christensen announced that their recently released SILK codec would be available to third parties royalty-free. Two weeks ago at eComm Europe phonefromhere.com’s Tim Panton gave a presentation “Deploying the SILK codec, How and Why” where he discussed two projects where he was involved in embedding Skype’s SILK codec into a voice-enabled service under projects managed by Dean Elwood’s Voxygen product and services deployment company. From the overview for the presentation:

SILK’s royalty free licensing combined with it’s non-TDM heritage allow us to focus on the user and what they have available instead of obsessing about attempting to manage the network.

Last week came a press release announcing the beta release of Blabbelon, the first browser-based voice chat and push-to-talk tool targeted initially at the Internet gaming market.

As communication companies continue to look for new ways to generate revenue with VoIP applications, keep current customers and lure new ones, Blabbelon enters the market and completely changes the rules of the VoIP game. The first browser-based VoIP chat tool using Skype’s SILK super wideband audio codec, as well as one of the first massively multi-user VoIP services, Blabbelon can handle thousands of simultaneous users at a fraction of the cost per user of other traditional services. Blabbelon provides a platform for a wide variety of users such as: gamers securely competing in team-based quests; businesses running 7,000 person global conference calls; or grandparents taunting grandkids over a game of Facebook Scrabble.

I spent some time yesterday in a Blabbelon session with Dean to experience the service in action. Out of this session came the following points:

• Push-to-talk voice sessions comprise a common feature of Internet gaming sessions; however, Blabbelon brings a new level of ease-of-implementation and ease-of-use, with the goal of having a simplicity of adoption similar to what Skype experienced because you simply installed it and started calling and talking.
• In fact, being browser-based means there is no download required. Once a session leader has launched a Blabbelon session s/he simply needs to distribute a URL to other participants in a game to allow them to join the session.
• It’s push-to-talk but there is a hierarchy established to manage who has “talking” rights. The entire experience of having a discussion is very similar to CB Radio or a “direct connect” two-way radio service where, with the simple push of a button, one can speak instantly to a designated team of participants in an activity, such as a construction project.
• Blabbelon sessions can scale up to more than 7,000 users in a low cost business model. In fact their press release talks about its being ideal for online auctions. Is this the style of voice service that Meg Whitman should have acquired for eBay instead of Skype?
• Use of the SILK codec certainly supplies a crystal clear sound while using a minimal amount of bandwidth – very important for gaming sessions that can become very CPU intensive. Again from the press release:
  

  Users can run Blabbelon in their Web browser, while simultaneously using other online applications – with no impact on their overall network performance, since Skype’s SILK codec was designed to use approximately 50 percent less network bandwidth than previously required, while delivering improved richness in audio quality.”

• As for the initial target market:
  

  Blabbelon will initially focus on a core audience of the millions of online gamers and players of Massively Multiplayer Online (MMO) games such as World of Warcraft (WoW). The combination of Blabbelon’s technology and features and the SILK codec provides a perfect tool for this market, which, because of the cooperative nature of games, needs a no-download, high-quality, secure, reliable and scalable voice chat.

More background from the press release:

Blabbelon was created by a team led by CEO Ed Ikeguchi, former co-founder of Medidata Solutions (Nasdaq: MDSO); Dean Elwood, CEO of telecom provider Voxygen Limited and chief technology strategist of Blabbelon; and Rowena Rubio, CMO and former systems analyst.

Available immediately [as a beta offering] from www.blabbelon.com, Blabbelon is hosted by Rackspace, ensuring the highest levels of chat stability, quality, security and reliability. Blabbelon offers 100 percent uptime through Rackspace’s worldwide network and zero downtime guarantees.

Bottom Line: Blabbelon opens new directions for the application of VoIP technology and the SILK codec. It’s not a voice conversation service along the lines of traditional telephony. Yet it brings new ease-of-use and voice quality to a market that has been poorly served by current offerings. Of course listening to Dean on Blabbelon using a FreeTalk Everyman for Skype headset with its inherent support of the SILK codec ensured that the full benefit of the voice quality available from SILK was experienced.

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