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Story URL: http://www.silicon.com/research/specialreports/voip/0,3800004463,39129554,00.htm

Skype spruced up with paid-for services
The official coming out of SkypeIn and Voicemail...

By Sylvia Carr

Published: Friday 15 April 2005

Skype has enhanced its popular voice-over-IP application with today's official public beta launch of two new paid-for features: SkypeIn and Skype Voicemail.

Both have been available in limited tests but are now ready for widespread use for the Windows, Linux, Pocket PC and Mac OS X versions of the VoIP software, which has just reached the 100 million download mark and boasts 35 million registered users.

SkypeIn allows users to buy up to three phone numbers in eight countries – Denmark, Finland, France, Hong Kong, Norway, Sweden, the UK or the US – at which people can call them from standard or mobile telephones. The voicemail records messages from callers when Skype users are not available.

Along with SkypeOut, which allows Skype users to call standard phones from their computers for a per-minute fee, they give the company a total of three paid-for services.

SkypeIn costs €10 for 3 months or €30 for one year and includes voicemail. The voicemail feature on its own costs €5 for 3 months or €15 for 12 months. Both are available for purchase on the Skype website.

Skype CEO Niklas Zennstrom told silicon.com he hopes the new features will increase the amount of time people use Skype and help "people to make Skype more and more a primary communications tool".

Skype Voicemail is much like traditional voicemail in that users can record original outgoing messages and receive messages up to 10 minutes long. But Zennstrom says they've already seen testers use it in innovative ways – such as sending voice message when they know the Skype user will not be around. "We expect people to use it not only as traditional voicemail but as a messaging service," he said. "We have seen people are sending messages directly to voicemail."

Skype stores voicemail messages so users can play them back even when offline – a feature that sets it apart from the third-party 'answering machine' add-ons that have been available for some time, according to Zennstrom. At the same time, he said of the third-party developers: "We definitely encourage them to continue."

James Enck, European telecom analyst at Daiwa Securities SMBC Europe, has tested the new features and said they work "beautifully". He particularly noted the ability to send voice messages to other users and play them back them offline. "All of this is pretty revolutionary," he said. "It further demonstrates [Skype's] potential to do damage to the telecoms industry."

Zennstrom said Skype "definitely wants to announce more paid-for features" but said they don't have any "immediate plans" as they've been busy developing SkypeIn and voicemail.

As for the new features' effect on Skype usage, Enck said: "I don't know if [the new features] will accelerate adoption but they will expand the revenues [Skype] can get from the existing user base."

The strategy of adding more and more paid services is "very consistent with what [Skype] said from day one, that we don't need that many users to be spending with us," Enck added.

"Given a scenario with 100 million registered users, and maybe 1 million hand you €10 a year – that ain't bad, given [the company's] size and that they have effectively no physical assets that incumbents in this space have."

Zennstrom said the company is also moving forward with its Skype for Business offering, due out later this year. According to Zennstrom, the company has created a prototype which it has been testing with business users but warned not to expect anything radically different from the consumer version. Instead, he said Skype is following a model set by mobile operators.

"When [mobile operators] have a mobile phone service for consumers or business, it's the same service, but the business service can group users on the same invoice so it's easier to administer. That's what we're looking at immediately, making [Skype] easier to administer [for business users]."

As for making Skype mobile, another possible revenue stream, Zennstrom said: "We are continuously working on making Skype available on mobile devices but don't have any definite plans at the moment."