Skype-Verizon Wireless Deal Is No Game Changer

Given the names involved, many observers unsurprisingly expected whatever deal Skype and Verizon Wireless planned to announce at the Mobile World Congress in Barcelona to produce a major breakthrough for mobile VoIP. But when the announcement came, it turned out to be less than overwhelming. It involved an application that will allow mobile users to make Skype calls over the Verizon Wireless network using smart phones. The deal does little to alter Verizon's traditional cellular model. It doesn't transport VoIP over the 3G data network, and it won't be a major money-saver for users. The main change it brings is making Skype somewhat more convenient and accessible for Verizon customers.

The downloaded app runs on a variety of BlackBerry and Android devices. While it lets users make and receive Skype calls, the calls travel to and from the Skype network via Verizon's circuit-switched voice network, bypassing the 3G data network. The calls can be either Skype-to-Skype with other Skype users, or SkypeOut calls to conventional phones. There is no charge for airtime minutes during the calls.

While not having to pay for minutes might seem a major benefit, those who want to use the app will still have to buy both voice and data plans from Verizon. Thus they won't save much if any money on domestic calling, particularly if they buy the unlimited calling plans Verizon is increasingly pushing. They will save some money on international calls if they use Skype rather Verizon's network. But most Skype-savvy users wouldn't likely have made many international cellular calls anyway. Rather, they would have simply waited until they were at their desks, and made Skype-to-Skype or SkypeOut calls from their PCs.

Thus it's clear that the only major advantage the deal brings is availability. With the app, Verizon Wireless users can make Skype calls from anywhere using their smart phones, rather than only from their PCs. And because the app runs in the background, they can receive Skype calls any time. That means their callers need no longer guess when users will be at their PCs and online, and users need no longer set up appointments to make or receive free Skype calls. Such added convenience will make both Skype's and Verizon's services more attractive, but it's hardly revolutionary.

The service will launch on nine smart phones in March.