Skype strikes deal with Nokia

BARCELONA--Skype is racking up deals with mobile handset makers here at GSMA Mobile World Congress 2009.

On Tuesday, the company, which is owned by eBay, announced a partnership with Nokia, the largest cell phone maker in the world, to put the Skype Internet calling software onto its phones. Nokia will initially offer Skype on its high-end smartphones, the N-series. The N97, Nokia's flagship device that goes on sale in June, will be the first to have Skype embedded. The Skype feature will start shipping on the device in the third quarter of 2009.

Skype will be integrated into the N97 address book, enabling users to see when Skype contacts are online. It will also let people use Skype's instant-messaging client. Most importantly, N97 users will be able to make free and low-cost phone calls over the Internet whether they are on a 3G cellular network or a Wi-Fi network. The Skype-to-Skype voice calls are free. And the SkypeOut service, which allows calls from Skype to landlines and mobile devices, offers low rates.

Nokia's not the only handset maker to announce a deal with Skype at Mobile World Congress. On Monday, Sony Ericsson announced it would be offering a Skype "panel" on the Windows Mobile Xperia1 device.

Adding Skype to smartphones is a great benefit for consumers, especially people who travel internationally or have friends and family overseas. While pricing on domestic voice services has been dropping like a brick from a third-story window, international rates have remained high.

As a consumer who likes to travel and who happens to be traveling internationally right now for this trade show, I am annoyed and almost angered at the outrageous prices mobile operators charge when customers roam in other countries or make international calls from the U.S. They all try to sell "international" plans to help defray the cost, but the plans themselves cost consumers an extra fee every month regardless of whether they're traveling that month or not.

Skype and other VoIP services offer users a more cost-effective alternative. And Skype on a mobile phone, when accessed on a low-cost data network, could help people who travel frequently or make lots of international calls save tons of money.

Of course, the two smartphone makers Skype has announced as partners here are manufacturers that are already struggling to get their high-end devices on American mobile networks. And my guess is that adding Skype won't do much to convince these operators to offer these phones and subsidize them so that American consumers will buy them.

The reason is pretty simple. AT&T, Verizon Wireless, Sprint Nextel, and T-Mobile USA know that a wide-scale deployment of Skype on their phones could cannibalize their international voice services and potentially hurt their domestic voice service.

So if by chance, Nokia or Sony Ericsson manages to win approval from a U.S. operator to get these phones on their networks, I wouldn't be surprised if the Skype feature is stripped from the device in the U.S. version.

That said, AT&T is allowing some voice over IP applications to appear on Apple's iPhone App Store. And Skype users are able to make free and low-cost calls through applications, such as Truphone. But for now, AT&T and Apple seem hesitant to allow Skype's powerful brand, which has more than 400 million registered users, to make it onto the iPhone.