Mobile Skype: The End of Cellular As We Know It

The arrival of Skype on iPhone and BlackBerry will force the carriers to confront a painful reality: Telephone calls aren't special. They are just data crossing the network that happens to end up on a handset someplace. And that data shouldn't be priced differently than any other data the network carries.

Sneak Peek at Skype for iPhone, Available
Skype for iPhone arrives

Apple, in its usual anti-consumer way, is limiting what Skype will be able to do on iPhones in order to protect AT&T's business. iPhone users will be able to use Skype when connected to a Wi-Fi network, but not when using AT&T's 3G or EDGE data networks.

That protects AT&T's voice revenue from calls moving to Skype and the avalanche of data Skype caller might create.

Wanting to protect against this is understandable, considering how afraid AT&T must be of Skype. Not that AT&T couldn't see this coming, they just aren't prepared for it. It has even been tested in the UK with some success (and no carrier bankruptcies).

Progress Delayed, Not Denied

I understand the protectionist thinking behind this, but it only underscores why Apple shouldn't control what applications the iPhone can run and handset vendors shouldn't be beholden to the wireless carriers. The idea of charging for calls on a per-minute, or even per-call, basis is no longer relevant to the cellular industry, though it will certainly not go away easily. Such pricing stopped being relevant to the wired telephony business several years ago as people started switching to flat-rate calling plans and international long distance became almost dirt cheap.

The cellular carriers have had years to prepare for wireless VoIP and still find themselves caught in a bind. Cellular data hasn't really taken off quite yet, so the pricing isn't optimized for heavy users. Not that data plans are too cheap--they aren't--but the pricing isn't based on a user replacing all their voice calls with Skype calls, either. On the other hand, Vonage and magicJack haven't caused my DSL bill to increase. Both can also be used with a wireless data card plugged into a PC.

The appearance of Skype on wireless handsets will not change the world overnight. However, it will drag the wireless industry forward, even if there is some kicking-and-screaming involved.

Right now, even if Skype could be used on iPhones over the wireless data network, it would still be easier to make calls the old-fashioned way. It will stay that way until Apple makes a software change that gives users the option of how their calls are routed.

This would be an excellent opportunity for BlackBerry, Android, or some other handset to take some thunder away from the iPhone.

The first U.S. carrier to embrace VoIP over its wireless network will make a big splash and sell a bunch of handsets, particularly to price-sensitive businesses. That seems like an opportunity that is custom-made for Blackberry, provided a carrier steps up to the plate. Sprint, maybe?

With apologies to REM, Skype coming to the iPhone marks the beginning of the end of the phone as we know it. And I feel fine--even if Apple and AT&T don't.

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