Skypephone set to challenge incumbent networks

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Skype is expecting to sell hundreds of thousands of its new handset over the next few months, challenging incumbent mobile networks, the Voice over IP (VoIP) firm said following the launch of its Skypephone today.

Skype users in the UK will be able to make free calls from a mobile phone to anywhere in the world, following a new deal between the Internet phone company and mobile operator 3.

This Friday, 3 will start to sell a new handset developed jointly with Skype and manufactured by Chinese device maker Amoi, with software from US vendors Qualcomm and iSkoot.

The phone, which costs £49.99 for pay as you go users or is free on a contract, supports 3G data and has a Skype button for direct access to Skype users' address books and instant voice calling. Shaun Collins, of analyst firm CCS Insight, said that the service had a good chance of success, based on the pricing structure announced today.

Video calls will be added on future phones, according to Skype CEO Michael van Swaaij.

Skype has offered limited support for mobile phones before now, including on some Windows-based mobile handsets and on some 3 phones. However, the new phone has been designed from the ground up to be easy to use, according to Swaaij and 3 UK's managing director, Kevin Russell.

Ease of use will be paramount to the new service's success, according to both companies, as existing mobile-based VoIP services are too complicated for most users to embrace. Neither Skype nor 3 would be drawn on predicted sales, but Russell said that the phone would sell "hundreds of thousands of units" over the coming months, driven in part by a "network effect" of Skype users introducing friends and colleagues to the new handset.

Skype, which is owned by eBay, claims some 246 million registered users worldwide. Buyers of the new phone will be able to call any Skype user for free from the handset. Instant messaging or chat on Skype is also free, up to a fair usage limit of 70 hours a month of voice calls.

Users of the new phone will not, however, be able to use it to make video calls or to receive "Skype in" calls from the public phone network or make low cost "Skype out" calls to regular phones. Van Swaaij said that these features would be added in the next few months, however. Skype calls and messages are free of charge when roaming on some 3 networks, but the first handset uses UMTS rather than the faster HSDPA data protocols supported by 3's network.

However, the new Skype handset and service is being aimed at consumers, according to van Swaaij, rather than businesses that might want faster data speeds. But van Swaaij said that more business-related phones, including Blackberry-style devices with Qwerty keypads or touch screens, are a possibility.

Even so, small business users and even enterprises are expected to try out the phones. 3's Russell said that one company, which he declined to name, had ordered the new phone at 7am this morning.

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