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July 12, 2005

Skype, Boingo Partner in Hotspots for VoIP, Telephony

By Nancy Gohring

Skype users will pay $7.95 per month for unlimited use of Boingo hotspots for Internet telephony: Boingo has 18,000 hotspots worldwide in its network. Boingo users pay $21.95 per month for unlimited use of the network, and Boingo surely sees this as a stepping stone to acquiring more full-fledged users. Skype users can also pay $2.95 for a two-hour connection.

Users will be able to download the software from Skype’s Web site and all of Skype’s premium services will be available to users. Initially, the software will just be available for Windows users. It’s not clear what that means for voice over Wi-Fi handset users.

The heads of these companies think this is going to be a disruptive offering, though it’s more likely to be marginally interesting. Dave Hagen, Boingo’s CEO and president, said he expects this service to interest mainstream users. But realistically, this would be most interesting to a budget-conscious frequent traveler. Hagen has a point when he says that most travelers spend a lot of time in airports, hotels, and cafes—all locations that do or are likely to have hotspots. That traveler could save a lot of money by spending just $8 a month to make calls in those locations instead of paying for airtime on their cell phones.

One journalist on today’s conference call announcing the service asked a question about companies like Vodafone, that are threatening to block voice over IP over their 3G data networks. If data access prices drop enough, at some point it can become more economical for users to do voice over the 3G data networks. Unfortunately, not only does that cut into regular voice profits for the mobile operators, it’s a really inefficient way for operators to carry voice. Skype’s CEO, Niklas Zennstrom, said such moves to block voice over 3G are evidence that the 3G operators might be worried about the types of applications customers might decide to use over their data channels.

For now, voice over 3G data networks shouldn’t be much of a problem, given the rates the operators are charging for data access. Zennstrom noted that he does voice over Vodafone’s 3G network using a data card and that in a matter of minutes he pays the same as a month’s subscription to the new Skype/Boingo offering. He’s exaggerating but his point that $8 a month is a good deal is well taken.

Posted by nancyg at July 12, 2005 1:09 PM

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