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Original URL: http://www.theregister.co.uk/2007/10/29/3_skype_go/

3's Skype phone is go

By Chris Williams
Published Monday 29th October 2007 15:37 GMT

Mmobile operator 3 finally released full details of its new Skype handset at an event in London today. Early adopters can expect free calls, but no guarantees of reliability.

Skype was brought crashing down (http://www.theregister.co.uk/2007/08/16/skype_down/) in August by a Windows update.

Michael van Swaaij, who stepped in as acting CEO at Skype when founders Niklas Zennstrom and Janus Friis took eBay's money (http://www.theregister.co.uk/2007/10/01/ebay_skype_zennstrom_quits/) and ran at the beginning of this month, was unapologetic about the outage. "Skype is a four-year-old company. That was the first time something like that has happened."

Van Swaaij said if Skype goes down again, 3 subscribers cannot expect to get normal voice minutes in lieu. "Maybe in another four years they will. I don't know," he added.

The 3 Skypephone, built by Chinese manufacturer Amoi, will cost £49.99 on pre-pay and will be free to monthly contract subscribers. Skype calls and instant messenger are free for up to 4,000 minutes talk or 10,000 chat messages per month.

Unlike with 3's X-series phones, users are automatically signed in to internet telephony, which is accessible via one click of the Skype button. The VoIP contact list integrates with the normal phonebook too.

Otherwise, it's a standard cheap 3G handset with a 2 megapixel camera, Bluetooth, web browsing, Java, and 256MB SD memory card. There's no HSDPA, though 3 CEO Kevin Russell said it would be "the next step" for the joint venture. Other features such as a qwerty keyboard are probable too, he added.

The first Skypephone will be available only from Skype online and from 3's own stores from this Friday. Selling through independent retailers will be dependent on the project's success, the operator said.

Russell was predictably bullish, promising to "hit the ground running" and aiming for "hundreds of thousands" of sales.

Other manufacturers were approached when the tie-up was in planning 12 months ago, but 3 said it chose to use a white label maker and Qualcomm's Brew software platform to keep the final price as accessible as possible. The relationship between 3 and Skype is exclusive, but only for "a short time", according to the VoIP firm.

SkypeIn and SkypeOut are not available because of technical difficulties. Russell said the duo would have the kinks ironed out so that users can call and be called by non-Skype phones in the first half of next year.

This handset will not work in the US either. A 3 rep told the Reg that it had missed the deadline for FCC approval. The final software build was only completed three to four weeks ago, he said.

3's expecting average revenue per user to be about the same for Skypephone and non-Skypephone subscribers. It may be instructive to see if it releases those numbers come next financials round. The longer term aim is to reduce churn by offering a service no other operator yet dares to.

The Skype handset could be the first of several internet service-centric handsets for 3, which is very keen on carrying more IP traffic.

Russell took the opportunity to call on his operator rivals to address the challenge of the internet. "Today is another strategic step forward in where we want our business to go," he said. "I haven't heard a clear articulation yet from any [other] incumbent." ®

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