Skype hits the shops

Net telephone service Skype Technologies is set to make its first appearance in a US retail store.

The Luxembourg-based net telephony company, founded by the people behind the Kazaa peer-to-peer service, is expected to announce on Monday that it has struck a partnership with consumer electronics chain RadioShack.

More than 3,000 RadioShack locations nationwide on Monday will begin offering the Skype Starter Kit, which includes the software that enables a customer to use Skype's free computer-to-computer telephone service, a headset and 30 minutes of Skype's premium service, with which a user can call a landline or mobile phone, company executives said.

The move is an attempt by Skype, the world's largest provider of voice over IP, or VoIP, to introduce its service to mainstream America. Before this deal, US consumers could only get Skype service by downloading the software from the internet.

Saul Klein, Skype's vice president of global marketing, said: "Skype has grown rapidly among early adopters, and this partnership with RadioShack will bring Skype to the mass market."

Since launching in 2002, Skype has rattled traditional telephone companies by offering free computer-to-computer VoIP calls and low-cost connectivity between computer and landline or mobile phones. While Skype can boast 66 million registered users and a growth rate of 180,000 new customers per day, the market is still in its infancy, and major conglomerates have begun venturing into the sector.

A tiny fraction of Americans use VoIP, and analysts have predicted that continued growth in the market may ignite a land-grab by large players.

On Wednesday, electronics kingpin Sony launched a free web-based phone service designed to link users via their computer video-cameras. AOL, Yahoo! and others have long offered computer-to-computer phone services. Microsoft revealed plans earlier this month to offer internet-to-telephone calling.

Skype's competitive position was bolstered in September when deep-pocketed eBay announced it had agreed to acquire Skype for between $2.5bn and $4bn.

Besides growing competition, another obstacle Skype faces is entrenched consumer behaviour, said Charles Golvin, a telecommunications analyst for Forrester Research.

Golvin said: "When consumers think of making phone calls, they look for their phone and not their PC. I think moving into retail is a smart move by Skype. It removes one of the fundamental impediments to its business: it puts the necessary equipment into people's hands, and it helps to spread the word that free web phone service exists."

Greg Sandoval writes for CNET News.com