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October 7, 2004

Is Skype going backwards with pay-per-minute billing?

default — by TDavid @ 5:15 pm PST
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The time has come for Skype to start giving investors a return on their investment via paid services like SkypeOut. From day one I’ve wondered how this was going to play out and over a year since Skype’s early days, we’re finally starting to see Skype business plans begin to unfold. Cyndalie asks:

“TDavid, I know you are a Skype user - how do you think this news can help them, and webmasters, expand their business?”

Short answer: I don’t think this is going to help them very much. We’ve been using Vonage for the last 6 months or so, converting the majority of our traditional phone lines to VoIP. On the rare instances when I use IM, I tend to use Skype in place of ICQ, as Cyndalie noted or Qnext (which gives me multiple clients like Trillian). Instant Messenging is comparatively slow to voice communication, it’s only good for a “quick” message or two to somebody if they are logged in. Without voicemail, Skype doesn’t really address this whereas Vonage will send you WAV files of voicemail. However, if I can’t talk to someone in business via traditional phone (or cell phone), then I’ll try Skype, and lastly IM and email.

It sounds like it’s time to pay the piper for Skype’s vast collective of free users. They need to turn a profit out of netizens who use their service to place SkypeOut calls and by adding voicemail. The SkypeIN service which will allow people with cellphones and traditional phones to be able to call your computer and while that is interesting, people can already call me through my computer using Vonage. I know, I know, it’s not quite the same thing, but as far as it goes for at least this business user: I don’t need to pay extra (nor especially pay-per-minute to have SkypeIN).

As far as it goes for business use, I’m not sure why one wouldn’t go with Vonage over Skype for a variety of reasons? I mean, why absorb pay-per-minute phone charges just to be able to call from your computer when you can get Vonage and have unlimited minutes for a low monthly fee?

We have been trying to escape ridiculous pay-per-minute LD charges and Skype seems to be wanting to get businesses to use their service to go back to that dinosaur pricing model. That seems like a recipe for failure to me. Too late for pay-per-minute long distance in the US and Canada, at least. I’d like to see unlimited LD expanded to the whole world and if Skype could pull that off with a low monthly fee, that could be a coup for them. Business owners that start realizing how much they can save by switching to VoIP with unlimited LD plans will be exiting the traditional phone companies in droves. About the only reason we kept any of our traditional phone service was because we didn’t want to lose all our publicized phone numbers. You build a business and if you can’t port the phone number you are trapped. But I think the local phone company is one of the worst businesses out there. They don’t care about giving better deals because in our area they are the only game in town … except now for places like Vonage.

So if Skype puts together some sort of long distance SkypeOut plan for businesses that is unlimited use for say $25-50/month and is available worldwide, not just in the US or Canada then that could be the truly disruptive technology with a financial $$ model for Skype.

Until that time though, as great as Skype is for PC to PC (and, like Stuart Henshall I’ve been following it before it became a worldwide sensation with tens of millions of downloads) voicemail, SkypeIn and other goodies aren’t going to turn on that many businesses that — again – are trying to escape the pay-per-minute LD environment.

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RSS Feed comments for this post 5 Comments »

  1. Good detailed review of the VOIP/V2V services, TDavid. The last six months I am running into more and more smaller businesses that are switching to Vonage. Looks like an accelerating trend here to stay and going mainstream.

    Comment by Anita Campbell — October 7, 2004 @ 9:36 pm PST

  2. We have created a VOIPail it integrates with Skype and allows Skype users to have Voicemail. Please feel to join our Beta test of our new software. http://www.voipail.com

    Comment by Dennis — October 31, 2004 @ 4:10 pm PST

  3. [Dennis:2] Thanks for stopping by, Dennis. I filled out the signup form and am intrigued by what you guys put together via the Skype API.

    Comment by TDavid — November 1, 2004 @ 11:15 am PST

  4. [TDavid:3] Thanks for signing up. I was amazed at all the signups that I am getting regarding VOIPail. I am hoping to release the beta version of VOIPail mid November. I know skype is coming out with there voicemail in the future but VOIPail is something larger then just Voicemail for Skype it will integrate with a variety of applications and become a centralized Voicemail service. The response has been incredible and I cant wait to get the first Beta out.

    Comment by Dennis — November 1, 2004 @ 1:23 pm PST

  5. […] In particular, here’s a post of note: October 7, 2004 - Is Skype going backwards with pay-per-minute billing? This post explores and compares advantages Vonage has over Skype and the whole pay-per-minute pricing model: Business owners that start realizing how much they can save by switching to VoIP with unlimited LD plans will be exiting the traditional phone companies in droves. About the only reason we kept any of our traditional phone service was because we didn’t want to lose all our publicized phone numbers. You build a business and if you can’t port the phone number you are trapped. But I think the local phone company is one of the worst businesses out there. They don’t care about giving better deals because in our area they are the only game in town … except now for places like Vonage. […]

    Pingback by Make You Go Hmm: » Loren looking for firsthand Vonage experiences — October 20, 2005 @ 10:20 am PST


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