Skype Journal FAQ: Do I pay roaming when my son Skype's me from Argentina?

Q. My son Skyped my mobile phone from Argentina. Will I see expensive international rates or roaming fees on my next bill? – Dad in USA.

A. No. That was a local call as far as your phone company is concerned. Your son only paid "SkypeOut" rates, about $1.20 per hour. Aren't you glad your boy learned to use the Internet?

tags: skype, pricing, skypeout

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Skype gave away $12.9 billion in free international calls in 2009

One in nine cross-border minutes was a free Skype-to-Skype call last year. That's $12.9 billion in international calls Skype gave its users for free assuming Skype's customers would pay a world average market price of roughly $0.24 per minute.

Did Skype take those billions from telephone companies?

Just a little.

Telephone companies don't offer much in the way of differential pricing, charging more to people who'd pay more and less to people who'd pay less. So they leave a large underserved market.

Skype is happy to serve them.

Skype is also making the market bigger. When you make Skype-to-Skype calls, you don't worry about the cost of the call; just your time and your Internet connection. Skype voice calls can run for hours without anyone feeling anxious about using up minutes or the phone bill. So not only is Skype bringing underserved callers into the international calling market, Skype is encouraging them to speak longer and call more often.

Looking at the chart, people have been substituting Skype's free/cheap, simply priced, IM-style calling for expensive, unpredictable, and hard-to-dial PSTN calls. This bids down the market price of all calls. That's been going on for years; the average price is one fifth of what it was fifteen years' ago. It also slows the growth of PSTN calling as people switch to Skype.

The trend line shows Skype serving 75 billion minutes this year and 100 billion in 2011. That assumes Skype doesn't do anything new, like improving virality, usability, availability, presence, accessibility. You know: things that bring more people in and get them to call more people, more often, for more minutes.

tags: skype, competition, international, longdistance, pricing, chart, stats, statistics, trends

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Some Skype connection fees up from 3.9 to 7.9 cents per call

Skype-to-Skype calls are free. Skype sometimes charges you a small connection fee for Skype-to-PSTN calls in addition to your per-minute rate. The rates to non-"Global Rate" markets go up four cents per call on Sunday, 6 September 2009 to US$0.079 (about 8 cents).

CORRECTION: "With a calling plan there is never a connection fee, regardless of where you call".

Do you have one of Skype's calling plans? Calls are free of connection fees.

Without a calling plan you'll continue to pay 3.9 cents for each call to mobiles or landlines in Skype's Global Rate markets (listed below). Now, without a plan, your connection fee is 7.9 cents per call outside those markets.

The Global Rate destinations: Argentina - Buenos Aires, Argentina - Cordoba,  Australia, Austria, Belgium, Canada, Chile, China, Czech Republic, Denmark, Denmark - Shared Cost, Estonia, France, Germany, Greece, Guam, Hong Kong, Hong Kong - Mobile, Hungary, Ireland, Israel, Italy, Hungary, Korea, Republic of Luxembourg, Malaysia, Mexico - Mexico City, Mexico - Monterrey, Netherlands, New Zealand, Norway, Norway - Shared Cost, Poland, Portugal, Puerto Rico, Russia - Moscow, Russia - St.Petersburg, Singapore, Singapore - Mobile, Spain, Sweden, Switzerland, Taiwan, United Kingdom, USA.

Why did Skype raise the rates?

Does this new pricing simplify buying and calling choices? Does it make Skypers switch from pay-as-you-go to a subscription? Does it help prevent predatory calling or unwanted telemarketing? I think not. Most people will not notice the four cent increase. Are termination costs really higher outside of Skype's Global Rates markets? Possibly. This might offset those costs.

How much more revenue will this price increase bring?

Skype doesn't report the number of calls made or call volume by country. So let's guess [See the Google Docs spreadsheet and play with the the numbers yourself]. Skype reported 3 billion minutes of SkypeIn/SkypeOut calling. Let's say ten percent are to non-Global Rate markets (I suspect it's a larger share). And that Skype calls average 10 minutes (much longer than the average PSTN call, a little shorter than free Skype-to-Skype calls). 3x(10^9) minutes * 10% of all calls / 10 minutes per call. So, 30 million calls per quarter. At 4 cents more per call, that puts new income around $5 million each year. Or more. What's your guess?

tags: skype, prices, rates, connectionfee, tariff, analysis, strategy

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PamFax launches in Japan; lowers rates to China and 12 other countries

Send a fax for €0,09 per page (US$0.13) to Singapore, Israel, Aland Islands, Malaysia, Finland, Chile, China, Czech Republic, Hungary, Venezuela, Cyprus, Argentina, and Estonia. PamFax Pro subscribers pay €0,06. (Seems to be part of a larger trend. Skype cut rates to Turkey.)

And in today's news, PamConsult is now selling a localized release of PamFax for the Japanese market. You can fax to Japan at the same rates. Here's PamFax's page operated by PamConsult's distribution partner, Fusion Network Services Corporation. 

tags: skype, japan, china, pamfax, pamconsult, fax, ipfax, fusiongol, fusion

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Q. What are the Skype TechPolicy issues?

I'm heading out to a technology public policy conference today. Tuning my ear to listen for new issues. Some already on the Skype plate...

• Mobile Carterfone – freedom to use the device of your choice on a mobile network
• Mobile Net Neutrality – US mobile carriers are blocking Skype voice calls from data services. See iPhone and Windows Mobile store policies written by carriers.
• Net Neutrality – ISPs banned Skype. Should that be OK?
• P2P Freedom – As Skype shows, p2p has legitimate uses yet copyright industry groups draft laws banning the technology.
• Rural Access – Skype users needs cheap, capacious, ubiquitous, expandable broadband to the home and office.
• Telco Antitrust – The big mobile, landline, and cable carriers are very profitable, even in a horrid economy. Evidence of undue market power?
• Privacy – The US government is funding research to intercept Skype calls and uncover your Skype contacts
• E911 – When does Skype become responsible for helping people call emergency services?
• Unwanted Attention – Telemarketing, spam, spim, spit – we hate it all. What is government's role?
• Carbon Footprint – Can Skype-like communication lower our personal and national environmental impact? What can Skype engineers do to lower it further?

See today's Free Press analysis Dismantling Digital Deregulation: Toward a National Broadband Strategy (pdf). DDD suggests the US:

• Review every major FCC decision since the 1996 Act and reverse those that failed to promote broadband competition, openness and access. Congress should aid this process with a series of oversight hearings.
• Develop a data-driven standard to identify local areas where broadband providers are abusing their market power, and use the tools in the 1996 Act to promote competition.
• Expand and codify the FCC's "Internet Policy Statement" into permanent Net Neutrality rules. Congress should pass a Net Neutrality law to place these protections in the Communications Act.
• Reclassify broadband as a "telecommunications service," which will allow the FCC to promote competition by reinstating open access rules where appropriate.
• Transition the Universal Service Fund from supporting telephone service to supporting broadband infrastructure. Congress should aid this transition through oversight and legislation to provide a clear path for FCC action.
• Produce an honest assessment of whether broadband is being deployed to all Americans in a timely fashion, as required by the 1996 Act.
• Conduct a thorough review of policies governing competition and pricing in the "special access" and "middle-mile" or "enterprise" markets -- the broadband lines that connect cell phone towers and local area networks to the Internet.
• Open more of the public airwaves to unlicensed use and promote shared spectrum for both low-power urban and high-power rural uses. Congress should instruct the FCC and the NTIA to identify spectrum that could be utilized.

Offline for a the afternoon, the better to pay attention and mingle.

tags: public policy, skype, carterfone, Mobile Net Neutrality, iPhone, apple, microsoft, netneutrality, p2p, fcc, access, broadband, monopoly, antitrust, privacy, e911, telemarketing, spam, spim, spit, deregulation, competition, openness, spectrum, NTIA

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Skype To Go without a subscription to boost International calling

You can now use Skype To Go without a subscription, using your Skype credits. This widens the market for this cost saving service: Skypers who call family and friends over international lines. Could be a good move: if if STG can switch newbies from calling cards to Skype. 

Andy Abramson argues this move cheapens the value of buying Skype subscriptions. I'd agree if this was a more popular feature. Since it isn't, there's little risk in offering it to all of Skype's users. And as Andy says, this could burn up some of the Skype credits burning a hole in eBay's balance sheet. Skype can't recognize your Skype credits as income until you spend them.

STG is a blend of SkypeIn, Speed Dial, and SkypeOut. Get an STG number near you. You set up a short list of numbers you'd like to call at Skype's discounted rates. Assign each number a speed dial code. To use, call your STG number from any phone, press your speed dial code, and you're call goes through.

In tough times (any time), lower the barriers to buying your service. Skype just did.

tags: skype, skype-to-go, voip, pricing

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art credit: Skype

Skype sued for old money

Do you want your money back after 180 days?

Skype's long taken credits from accounts it deems abandoned. Seattle lawyer Roger M. Townsend filed suit Friday on behalf of all Skype users in Washington who lost money this way.

The plaintiffs say a Skype account should be treated like a merchant's gift certificate. In Washington state, all gift certificates are refundable by law (and balances are turned over to charity 24 months after being abandoned). So Skype should be giving back a Washingtonian's money instead of keeping it.

If Skype broke the law, then plaintiffs want triple damages, legal fees, and for Skype to stop the practice. "Our goal is to get a fair disposition" Townsend said to Skype Journal.

The claim says Skype has billing information good enough to identify and notify all Washington Skype users about the suit. 

A similar suit in Germany ordered Skype to stop this in 2006.

So how could this affect Skype and Skype users?

The suit may not find a legal nexus. But Skype does business with Washingtonians daily.

Skype may win. It's not clear Washington's gift certificate laws apply to something that is neither a gift certificate nor a bank account. However there are enough similarities that Skype may be held to that standard.

Should Skype lose, while this class action is limited to one US state, suits in other populated states may follow. Other states have similar gift card consumer protection laws, but terms vary a lot from state to state.

I don't imagine the business impact would be severe. Skype has been driving customers to switch from Skype credit accounts to signing up for pay-as-you-go subscription plans for years.

Has Skype taken your money? How did it feel? Would you like it back?

2008 Skype Class Action

Publish at Scribd or explore others: Business Skype Journal Skype s

tags: skype, security, law, terms, conditions

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IPEVO gives free Skype minutes, free US shipping

A message from IPEVO's Caroline Andreolle:

Happy Thanksgiving! To celebrate and thank our customers, we're offering free ground shipping until the end of year (to the Continental US).

And to celebrate that, we're offering 300 free Skype vouchers to all Skype lovers and to our friends at Skype Journal! Simply email iWantSkypeMinutes@gmail.com for your free minutes today!

All vouchers must be redeemed this month, before 31 November 2008, limit one per household, 300 vouchers total.

IPEVO makes Skype USB and desk phones, speakerphones, and webcams.

tags: blackfriday, ipevo, skype, discounts, pricing, free, minutes

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FCC puts off rural funding and freemium decision

The Federal Communication Commission scheduled it for election day, but they will not vote to reform intercarrier compensation and rural telephone subsidies as part of the Universal Service Fund (USF). While it may be brought up again, it probably won't be until the new presidential administration appoints new commissioners. Supporters had hoped for a delay to hold hearings in December. 

Some services, such as free conference calling, use loopholes in intercarrier tariffs to pay the bills. So some smaller states became a haven for services free-to-consumers but with costs born by the phone companies of out-of-state callers. These only becomes a problem for bigger carriers when their long distance services are sold at a flat rate while underlying costs vary. Some of the proposed rate reforms would have closed these loopholes. In anticipation of this ruling, companies like Skype partner VAPPS left their freemium model for a subscription model.

The country's largest carriers supported leveling the tariffs, which would have cut off payments to small phone companies supporting about one third of the United States. Opposition to these reforms came from telecom unions, state regulators, rural phone companies and rural ISPs.

Barack Obama expressed support for the USF, for funding rural telecom access, and for expanding the reach of broadband to rural America. The Chairman's decision clearly had nothing to do with today's election. 

tags: skype, policy, election, 2008, regulation, rural, suburban, access, fcc, obama, mccain, presidency, president, us, united states, voters, icc, usf, tariff, demographics, demography, broadband

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Measuring Freemium with Minutes is easier than with Money

Hudson asked me about using minutes instead of dollars and the trend of the Freemium Rate I described Monday.

Comparing apples to apples, minutes-talked is the only data I have on both sides of the free/fee equation.

Money as a measure is useful. It leads us to the lifetime value of a customer. How can we measure free in dollars?

We might value the free minutes at some averaged rate and compare that to Skype's overall revenue.

Skype earns money from licensing its brand, the rental of SkypeIn phone numbers, from its online store, ads in Skype’s yellow page directory services. Sadly, I don’t have access to revenue data broken out by source.

We might include costs with dollars, seeking profitability or net value of customers. Costs for fee-based services are higher (transaction costs, higher security, admin, sales costs, customer service, technical support, business development) than for free. 

Meanwhile, we have customer behavior in the form of minutes. And the simple freemium rate comparing free to fee. It will suffice.

tags: skype, freemium, metrics, business, strategy, free, skypeout, directory, yp, yellowpages, skypein, revenue, costs

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Skype is tweaking the freemium model

Following up Monday's post about the Freemium Rate, Hudson Barton wrote "in a normal 'freemium' relationship, it is the higher valued services that have a fee attached to them."

Most freemium services offer free but limp, shallow versions of their paid products. I show that on the chart below by the boxed "0" (free, few features) and the upgrade path to the boxed "$" (high cost, more features).

In Skype's case, that's not how it works. SkypeOut users call a voice line and pay for it by the minute or with a subscription. Skype-to-Skype users get free multi-modal talk (persistent IM, voice, video), file transfers, voice conferencing, public chats, audio fidelity far better than mobiles and landlines.

So Skype is making the free experience rich and sophisticated and full. On the chart, users start in the bottom-right quadrant (free, full features) and ADD SkypeOut (costs, simple features).

Skype has a pricing advantage in their freemium model. A year's national SkypeOut subscription can cost less than 10% of what people spend on land lines. So even Skype's premium charges are cheaper than many alternatives.

tags: skype, freemium, business, strategy, free, skypeout

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economic heartache

"More economic heartache! Email from Skype just notified me that my $0.18 of Skype credit will expire in 7 days!" - Scott Sorheim

German court bans VoIP on iPhone

Too bizarre. Read Tom Keating's post on software as thought-crime.

tags: skype, voip, germany, iphone, blocking, banning, censorship, hamburg, de, sipgate, apple, t-mobile, tmobile

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The Bush/McCain economy is good for Skype

The U.S. misery index is up. Unemployment is at a five year high. The US dollar is at a generational low. Home loans are hard to get and usurious if you get them. College is out of reach for millions. Petrol so expensive that people aren't traveling, are rethinking location decisions like where they work and live, how often they visit family, are cutting shopping trips and buying more online.

This is good for Skype adoption in the United States.

Cheap is Skype's gateway drug.

We substitute onlife communication for costly local and long distance travel. Telecommuting, conference calling, and team chats replace hauling your sorry atoms to meetings. 

We reinforce relationships with family and close friends as financial threats loom large. Safety in numbers, strength in tribes, even at a distance.

We look hard at our monthly spending. Compared to PSTN landlines, $5/month for 10,000 minutes in the US & Canada and a SkypeIn number looks like a lifeline. Hundreds of dollars kept in your wallet. Small businesses, also feeling economic pain, are setting up Skype and Vosky PBX-to-Skype gateways to save. Good feelings in bad times can bank loyalty money can't buy.

Will next month's 2008-Q3 numbers support the theory? We'll see.

tags: skype, economic geography, economy, trends, marketing

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Skype stops selling flat-rate all-Taiwan and all-Asia plans in Taiwan

Taiwan probably has the highest per-capita Skype adoption of any country. Politicians pose for Skype photo-ops. Their top portal drives Skype traffic. They invent the most stylish of USB and PC-free Skype phones.  
So I was surprised when Jan Geirnaert tipped me to Skype partner PChome backing off of some flat rate services as published in this DigiTimes story.
Skype's deal of a cheap flat rate to landlines in all of Taiwan and most of Asia was so good that some customers maxed out their accounts. They shared their accounts with friends and family. Some even set up shop selling access to their Skype accounts.
Skype continues to offer the all world rate, but the Go Taiwan and Go Asia rates are not for sale or renewal at PChome.com.  New pricing plans will replace Go Taiwan and Go Asia as soon as they can be defined and built. The new subscriptions "will better suit the calling patterns and price points for users in Taiwan" said a Skype spokesperson.
Large economic forces are in tension. The demand to talk still fuels a multi-trillion dollar industry. Skype serves five percent of long distance calls on Earth, yet unmet demand is enormous. As we've seen here, small changes in pricing dramatically change product adoption, calling behavior, and consumer psychology. It's still early and new skills, beyond simple market arbitrage, will become important to Skype's prosperity and success. 

Rough translation of the letter PChome emailed to customers, provided to me by Skype.

Dear XYZ,
 
Thank your kindly for supporting PChome and Skype for a long time.
 
We regret to notify you that we will stop the auto-renewal function of Unlimited Taiwan and Asia 200 starting 8/21/2008. It means you can not extend the subscription of these packages by paying with Skype Credits in your Skype account anymore. However, you can keep using active Unlimited Taiwan and Asia 200 until the expiration date.
 
PChome always tries to keep our users satisfied by offering the Skype Internet communication service with excellent quality and reasonable price. The new subscriptions are very popular. However as several months passed, we found some users abused the service, and the misuse made a serious impact on regular users. Therefore, we have to stop the auto-renewal of the service. We are quite sorry about the inconvenience.
 
Please notice that after the auto-renewal stops, you can still use SkypeOut to call the whole world and don't forget the chat, calls and video calls of Skype to Skype are completely free. Besides, we will release alternative monthly subscription packages that match users' requests as soon as possible.
 
Once again, sorry for the inconvenience, and thanks for understanding. 
 
Sincerely, 
 
PChome

tags: skype, pchome, taiwan, taipei, pricing, plans

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