Skype Offers Free Phone Calls in US and Canada

Skype, a unit of eBay, has offered free phone calls from now until the end of the year for users of its service in the US and Canada when they call a regular land line or cell phone. The idea is to grab market share from other Voice-over-Internet Protocol (VoIP) communications firms. This is a long way removed from the phone companies that just turned over call records to the NSA; it is 21st century technology and the beginning of free calls all the time.

Skype calls itself a peer-to-peer voice service. It runs on one’s computer and, if the microphone and speakers are functioning, it allows one to call any other computer in the world for free. For calls to traditional phones, there is a small charge (usually much less than traditional carriers, at about €0.017 per minute in the developed world), and in the US and Canada, it’s been temporarily abolished. The company makes most of its money through sales of phones, accessories, and ring-tones. The software is Estonian, a nation that has rebuilt itself after communism on the web.

The target of the latest move is less the traditional land-line companies or even cell phones. Skype is trying to position itself as an alternative to Vonage, of which the Kensington Review is a customer. Vonage is set to go public later this month, and Skype sees this as the time and the hour.

The two don’t quite serve the exact same markets. Skype is usually considered a complementary service that one would add to an existing telephony services package. Vonage is a complete replacement of the traditional package. It is part of the so-called “triple play” of VoIP, cable TV and high-speed internet access, and as such, it is in competition with Time Warner and others of that ilk.

Whether Skype, Vonage or BellSouth winds up winning the telephone follies, the significant fact was summed up by eBay CEO Meg Whitman back in October when her company bought Skype, “In the end, the price that anyone can provide for voice transmission on the ’Net will trend toward zero.” The profits will come from advertising and transaction fees, and calling anywhere will be free. That is the revolution that lies ahead.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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