Skype for iPhone Enables 3G Calls (& a fee)

The free Skype for iPhone (app store) was updated this week to version 2.0.0. Listed as new features are improved start-up time, faster access to the dial pad, enhanced call quality indicator and near CD quality for Skype-to-Skype calls. Oh yeah, and Skype over 3G. This feature has been on everyone’s wish-list since AT&T announced last October that it had “taken the steps necessary so that Apple can enable VoIP applications on iPhone to run on AT&T’s wireless network”. I thought it would be great, but it seems there is a new catch…. starting later this year, it will cost you a “small monthly fee”.

Skype is the popular VoIP software that has always allowed free video, IM, and Skype-to-Skype calls. Calling a standard landline, or mobile numbers, required you to purchase Skype Credits. It appears that is changing. Posts at 9to5 MacMacRumors and Mashable related to this update state that Skype-to-Skype calls over 3G are free through August 2010, but the Skype page in iTunes says “Skype-to-Skype calls on 3G are free until the end of 2010, after which there will be a small monthly fee (operator charges for data will still apply)”. I am not sure which is accurate, but a fee is coming.

I am not going to try and suggest that they can’t, or shouldn’t, charge for using their service, since of course they can. In fact, it would be easy to justify charging for Skype. It is very popular in the tech industry, and podcast world, and it is a great product. My question is, why only for 3G calls?. Is it simply a business decision on their end, or are the wireless providers involved?

Why should it matter to Skype where my bandwidth is coming from? It should not. If I am on DSL or Cable I can make Skype-to-Skype voice and video calls for free, but on the unlimited 3G data plan – I am forced into buying – I have to pay more? If Skype charged a monthly fee for their service, regardless of the connection method, that would actually make more sense. Charging only for 3G access seems like an AT&T charge. I might as well just use my cell minutes. OK, long distance may still come out cheaper on Skype, but the bigger issue is that this will change the image of Skype. Gone is the simple statement “Skype-to-Skype calls are free”. Adding the small italic text “*except over 3G where a small monthly fee is required” kind of kills the flow.

Before someone mentions that Skype is a business, and is free to charge for new features, I know that. Businesses are supposed to try and make profit, and I don’t mean to suggest otherwise. I don’t see opening a bandwidth option as a new feature. I see it as lifting a carrier mandated restriction, or removing a crippling feature. The other argument I have seen in various forums is that Skype needs to charge to finance their app development. A monthly charge was simply a bad business decision. There were options available to Skype to monetize app development that are more customer friendly than a recurring charge. What they have really done is create incentive to wait and use Skype on a different connection. That is not smart.

How could Skype better monetize the iPhone market? Simple. They could have implemented in-app purchases of Skype Credit. They could have even charged a small fee for the app itself. For me, I will simply wait until I am in front of my computer before I use Skype. The app is off my iPhone.

3 Responses to “Skype for iPhone Enables 3G Calls (& a fee)”

  1. Mark, Sr. says:

    I agree with your assessment that the wireless providers must be involved with the charge, but maybe not directly. For people like me, who do not have unlimited data access, we need to pay per byte. Skype may be just following the wireless provider’s model/culture of paying for data that is not necessarily as common a practice on DSL or cable.

  2. Mark, Sr. says:

    Oh yeah, and since these comments are moderated . . . it’s ABOUT TIME you came up with a new post!
    I have been meaning to get on your butt for the gap in postings, but I have been busy coming up with A NEW VIDEO EVERY WEEK for my website!!!!!

    Weren’t you the one who taught me that more relevant content is better for the search engines, etc.?

    Sure, . . . I don’t have a job, and all . . . but STILL!

    Just giving you a bad time. Much love AND respect! 🙂

  3. Razz says:

    Hey Mark, Great to hear from you again. You concept on the data falls apart. As you mentioned you pay for the data. You pay your provider, and at a much higher rate than those with unlimited data. The rate you pay, and the source of that bandwidth, do not affect Skype. It is, plain and simple, a change in their business model. I don’t begrudge any company from releasing new features or new versions of software and charging for that upgrade or service, but in this case the charge makes no sense. Their actual business model has always, and really still is, free Skype-to-Skype calls – except those originated on cell. There’s a great tag line for the marketing department. It would simply make more sense to charge for any Skype use. If they don’t want to do that, and they want that free Skype-to-Skype ‘feature’ then should just charge for the app up front.

    As to the lag in posts… been busy. I have a ton to say but no time to say it. Hoping to change that soon. Love your site and videos too!

    (Plug for Mark: