Networks Restrict Skype On iPhone Using 3G Networks, Are Their Fears Justified?

As popular and impressive as the new Skype on iPhone app is, the main complaint from users is that it can only be used over a wi-fi connection, severely limiting the freedom to make free voice calls over the web.

It turns out that the application has in fact been hobbled by the respective networks selling the iPhone across the US and Europe, with AT&T/O2 preventing its use over 3G, whilst T-Mobile Germany has banned Skype outright.

The latent fear that this service will detract from mobile usage over the air has been a constant one for the carriers, and this step to prevent the full functionality is the latest in a long line of very visible stands against Skype becoming integrated on handsets.

The networks were quick to jump on the Nokia N97 the instant that they announced embedded integration of Skype at Mobile World Congress, demanding that it be removed and going as far as threatening not to stock the handset at all.

Net neutrality organisations are obviously up in arms regarding this discovery, talking to the FCC about the legality of this situation, whilst the Voice on the Net coalition (which includes among its numbers Google, Intel and Microsoft) have called on European regulators to ensure that consumers can run whichever smartphone applications of their choosing on any public network. The irony of Google doing this exact thing with an app at a network’s behest a week ago is not lost on everyone…

Many people see the networks’ reactions as far too extreme, as mobile Skype is in reality some ways off from killing traditional over the air communications.

Robin Landy, Information Architect for Omio/Trafficbroker, makes a compelling argument to suggest carriers are overreacting:

“I’ve never been very convinced about mobile Skype being such a threat to the operators, for four main reasons.

1. Skype user-experience on mobiles is abysmal. There are far more drop-outs and interruptions than on a PC. When the first mobile Skype client came out a few years ago, I thought that it would improve with time. Weirdly, even with much faster phones, it’s still not great.

2. On all networks (apart from 3) the data-tariff restrictions mean that it’s only practical to use Skype over wi-fi.

3. Most contract tariffs already have enough bundled minutes that it’d only be worthwhile using Skype for international calls – which most people wouldn’t use their mobile for anyway. In any case, making Skype-out calls to international mobiles is also prohibitively expensive.

4. WiMAX never seems to arrive. It is one of those technologies, which (like mobile fuel-cells and scrollable displays) is always “this year’s technology” but never appears in real products. In any case, WiMAX would still only solve the problems of restricted wi-fi coverage and the inability to ‘hand-off’ a call from one hotspot to the next.

I think that if problem 1 could be solved, people would probably make more international calls from their mobiles – using Skype. But it would have a negligible impact on the operators’ revenues because those calls would only be cannibalising the calls which people already make from Skype via their computer’s client.

The big four networks are missing the point. Mobile Skype won’t become an effective replacement for UK-to-UK calls and texts until a critical mass of users has Skype on their handsets, running all the time, with total coverage. Only 3 seems to get it.”

Perhaps it the networks stopped seeing Skype as a direct threat and rather a compliment to their existing services, then this stalemate between themselves and the manufacturers would be resolved. 3 experienced higher data usage (and revenue) than ever as consumers embraced their Web 2.0 biased SkypePhone and later the INQ1, which shows there is still plenty of money to be made by embedding and integrating new technology into handsets.

This aggressive anti-Skype/VoIP stance only runs the risk of highlighting the service as a worthy alternative to what networks are currently offering to the mobile user. Why else would they be so afraid of it?

Source: Mobile Today

Tags: inq1, iPhone, iphone 3g, networks, skype, skypephone, wimax