Telus wireless customers will be able to make Skype calls on their smartphones more easily under a new partnership announced this week.
It is the first such partnership between a Canadian wireless company and an internet voice calling service — a type of application once viewed with suspicion by wireless carriers, which feared cheap or free internet calling might cause customers to ditch their cellphone voice plans.
This summer, Telus and Skype will launch a Skype-branded edition of the LG Optimus Black phone that comes with international Skype calling credits.
That will allow users to make long-distance calls over the internet to landlines and mobile phones for low monthly subscription or per-minute fees compared to regular prices for wireless long-distance. Users can also make free calls to other Skype users.
Other benefits are promised for all Telus customers who use Skype:
- Skype credits added directly to their Telus bills, without the need to pay online using a credit card or PayPal.
- Free technical support to help Telus customers use Skype on their phones.
However, the company will still require customers to have a voice plan in addition to the data plan that enables Skype.
Voice plan still needed
"Skype is a great solution, but it's not a replacement for voice," said Brent Johnston, vice-president of mobility marketing for Telus Corp.
What is Skype?
Launched in 2003, Skype allows a user to talk via voice, text or video with another user, anywhere in the world, over the internet. It is typically used on personal computers but updated versions permit the service over televisions equipped with internet access and, most significantly, smartphones.
The basic model is free, but users willing to pay are granted additional abilities, such as being able to call telephones. The smartphone market is a major focus for the company, as the ability to make long-distance phone calls without paying cellular providers is proving to be a popular option with consumers.
Skype was purchased in May by Microsoft Corp., which has its own Windows smartphone platform.
Skype calling is already available to Canadian iPhone, Android and Symbian smartphone users, regardless of their wireless network.
But until now, Canadian wireless providers have been reluctant to openly endorse Skype, which had previously partnered with 3 Mobile in the U.K. and Verizon in the U.S.
Johnston said both 3 Mobile and Verizon had positive experiences, and Telus is aware many of its own customers already use Skype.
"So we want to participate in the future and be relevant as technology evolves," he said. "I think the way you do that is by partnering and improving on current technology, versus what people might have expected a telco to do — resist and otherwise be afraid of solutions like Skype. We think that's the wrong strategy."
Skype and smartphones
Skype launched its iPhone app in Canada in 2009, but initially calling features only worked when the iPhone or iPod was connected to the internet through a Wi-Fi wireless network. Wireless carriers initially prohibited the application from using the iPhone's cellular internet connection to make calls.
Apple banned app developers from designing calling services that used devices' 3G internet connection under pressure from wireless carriers worried about their voice revenues being eroded. However, the ban was lifted in 2010 after increased scrutiny from U.S. regulators
He added that this contributes to the company's core strategy to gain a larger share of the smartphone market, since people who use Skype tend to be smartphone users.
The service is also popular among "certain ethnic segments" and other client groups, he added.
"This allows us to very effectively target and serve those clients in a new and unique way."
Chetan Sharma, an independent telecommunications analyst based in Issaquah, Wash., said he sees the partnership as positive for Telus customers.
"It's more choice for the consumer — especially for international calling, there's nothing better out there [than Skype]," he said.
Emily Taylor, an analyst at IDC Canada specializing in consumer technology and services, said the partnership means Telus can prioritize Skype on its network and advertise itself as the best network for Skype.
"That can be a selling point for those who are using it right now, for sure," she said.
She thinks the deal will likely benefit both partners.
"This really exposes Skype to a whole new user base — the Telus user base — and vice versa."
Taylor acknowledged that previously, wireless carriers were concerned about losing voice revenues and, to a lesser extent, services such as Skype clogging up bandwidth on their data services.
But the current trend is toward declining voice calls anyway, as people communicate more with text messaging and social networks, she said. Meanwhile, data usage is heading the opposite way.
"The data market, we're seeing exponential, significant growth there," she said.
Bob Hafner, a managing vice-president of Gartner Inc., a technology market research firm, said the fact wireless carriers are moving away from unlimited data plans "is certainly going to be part of where they expect to make some of the money back from this."
He added that people have been using their smartphones more and more for internet services such as Skype.
"This is just sort of an acknowledgment by Telus that it can no longer stop it," he said, "so it might as well join the party."