E-commerce Update

Skype Offers Unlimited Calling Plan

Skype, EBay's (Quote) Internet phone service, today announced an unlimited calling plan for SkypeOut users. The new option comes as a year-long free period nears an end.

Details of the flat-rate annual plan for calls within the U.S. and Canada include a $14.95 introductory rate until Jan. 31, 2007. After that, Skype unlimited calling costs $29.95.

Skype-to-Skype calls remain free and calls outside of the U.S. and Canada are 2.1 cents per minute.

As part of the introductory offer, subscribers to the new flat rate SkypeOut plan receive credits for international calls, plus a $50 discount on Skype-certified hardware. In November, Skype announced the latest handset enabling users of the Internet calling service to untether themselves from a PC.

"We want to give Skype customers convenient options for choosing either an unlimited calling plan with a flat annual rate and or staying with our pay-per-minute offering," Don Albert, Skype's North America general manager, said.

Skype said as a result of its year-long promotion of SkypeOut, usage, number of subscribers and revenue figures all increased.

In North America, the number of SkypeOut users tripled to 11.9 million, a 122 percent increase compared to 2005. Worldwide, Skype reports 136 million registered users.

Subscription rates weren't the only figure boosted by the free SkypeOut promotion. Worldwide revenue for the Luxembourg-based Skype was around $195 million, three times the IP voice company's 2005 income.

As internetnews.com reported in November, analysts have expressed skepticism over Skype's numbers. Though SkypeOut subscribers have tripled, the company didn't release numbers, which IDC analyst Will Stofega said could be used as a benchmark of Skype's success.

And though there is an increase in subscribers, mass-market adoption for Skype isn't here yet, said Yankee Group VoIP analyst Jennifer Simpson. Simpson said Skype's gains in subscribers will likely come at the price of Vonage, which she said is having trouble retaining users.

When the free SkypeOut period expires, there will be an upswing in PC-to-PC calls, which will remain free. "PC-to-PC people are very price-conscious," according to the analyst.

Skype could continue the increase in international calls if it offered a service allowing cell phone users to place free calls. However, because of the tight control demanded by mobile carriers, such an option is not on the horizon, Simpson said.

Online auctioneer EBay paid $2.6Million in 2005 to acquire Skype