Skype and Netgear hook up for stand-alone wi-fi phone

Networking products maker Netgear and wireless calling provider Skype on Wednesday unveiled the first wi-fi phone designed to work on the internationally popular voice over IP service.

The so-called wi-fi phone, which will allow Skype users to access the service and call anyone anywhere in the world, is expected to be available in the first quarter of 2006. The companies also said pricing would be announced in that timeframe.

The idea, company officials said at the Consumer Electronics Show in Las Vegas, is that Luxembourg-based Skype's members will be able to use the phone on any wireless internet connection out of the box after entering their username and password. A PC will not be required.

The phone will work on encrypted wi-fi networks, as long as a user has the proper network ID but it will not work on paid wi-fi systems like those offered at many bookstores and cafes. However, the system is not designed to work seamlessly across multiple access points.

Netgear CEO Patrick Lo said: "We will be able to [multiply by 10] the number of Skype users around the world. We will free people from the inability to call people around the world because it's too expensive."

Skype CEO Niklas Zennstrom joined the demonstration by placing a call to Lo's wi-fi phone.

Skype allows its users to call each other for free, regardless of geography. They can also call non-Skype users via its SkypeOut service. The company, which was bought by eBay in September, creates revenue through premium offerings such as SkypeOut, as well as through voicemail and call forwarding features.

Lo said the Skype wi-fi phone will be aimed at consumers and not initially at businesses.

He added: "The business community will require more upscale [devices]. You have to be able to roam between access points."

According to an October study by Jupiter Research, 20.4 million US households are expected to subscribe to one form of VoIP service or another by 2010. But a study by In-Stat suggested it would take the availability of wireless-compatible phones in order for VoIP to be widely adopted.

Skype is not the first VoIP provider to offer a stand-alone wi-fi phone. Already, services such as Vonage have offered such devices. But Vonage and many other VoIP providers charge customers a monthly fee, regardless of whether users call in or outside the network. Skype differentiates itself with its free in-network service.

Daniel Terdiman writes for CNET News.com