News

The pending marriage of Skype with Apple Inc.'s iPhone could prove to be a match made in heaven for users but a royal pain in the long run for wireless carriers.

Today, Skype - the popular VoIP (voice over Internet protocol) service owned by eBay Inc. - will announce it is bringing its software to Apple's smart phone application marketplace, the App Store, with versions for Research In Motion Ltd.'s BlackBerry devices coming in May.

Much like the existing computer Skype service, users will be able to use the software to make free phone calls and send instant messages to other Skype clients and enjoy inexpensive dialling rates when calling non-Skype users, compared to the pricing of most phone companies. The mobile Skype software will work wherever a user can access a WiFi signal.

However, like other VoIP services, Apple's software prevents iPhone users from making use of the service over traditional carrier data networks. While some carriers worry that consumers will opt to use software like Skype to make phone calls instead of using more expensive, high-margin voice-calling plans, Skype's move into the mobile application world actually highlights a larger power shift in the smart phone world away from carriers and in favour of software vendors building tools that operate above or outside the carrier network.

"Much of the intelligence in the wireless device is migrating outside the control of the carrier," said Kaan Yigit, president of Solutions Research Group. "The carrier then becomes a pipe and a seller of a commodity - capacity."

In effect, services such as Skype mark the beginning of a transition that will see consumers subscribe to smart phones in a fashion similar to how they use computers - by paying providers such as Rogers Communications Inc. or Bell Mobility Inc. one price for Internet access on the mobile device and then using that service to use various applications, instead of paying for multiple services.

Rogers, which is the exclusive Canadian carrier for the iPhone, said it would not seek to block its customers from using the service.

Still, services such as Skype might offer carriers a chance to transition voice services, which are in decline, to data services, said Amit Kaminer, an analyst with technology research firm SeaBoard Group. "Going voice over data is the future and in that respect, resistance is futile," Mr. Kaminer said. "What the carriers are trying to manage now is how to minimize the damage. They know that voice decline has not stopped and they know what the future is going to look like, and the future is data. It's just how you bring your customers to that data."

Although carriers might initially be concerned about the ebbing of voice revenue from users making their phone calls through Skype, instead of through their existing cellphone plan, Mr. Yigit argues that the growth in demand for smart phones and the data plans that are needed to run applications such as Skype will outweigh those losses in the short term.