Tole Hart

On April 23^rd 2009 3 UK announced starting May 1^st, 2009 it will allow users with a Skype enabled handset, and a 3 SIM to have unlimited Skype-to-Skype calls and instant messages without having to pay. Over the summer, it will expand this service to any unlocked 3G handset. On the surface this seems like a crazy move that is going to cost them voice revenues but,3 UK and Skype have found that their users who have Skype services use the phone for non-Skype calls, SMSs, and the mobile internet more than the average customer and have higher ARPUs and margins. They also have lower churn than non-Skype customers.

3 UK wants subscribers to use their service for voice, text and data and are willing to forego the cost of Skype calls, because they will make it up with other services.

3 UK also know this will be a differentiator because the other operators do not want to offer Skype.

Offering this service can be thought is a similar fashion to in network mobile to mobile calling in the US. Carriers are willing to incur the network cost it creates loyalty. A plus for 3 UK is that Skype takes care of the final leg with a call connection.

Overall this is semi impactful and mostly related to heavy users of Skype. This incident will not become a force until most of the operators adopt the Skype service. But it is a good way for 3 UK to get some noise in the market especially in a poor economy.

For more information on the future of Mobile VoIP and 3^rd Party providers please reference:

Emerging Technology Analysis: Mobile Portal VoIP, Global Consumer Communications Services. By Tole Hart and Akshay Sharma ID: G00166429