Skype VoIP Internet Phone Service
continues to improve,
making this way of placing phone calls more
convenient, and competition is dropping the cost of VoIP
service down even lower than before.
Skype's service, with
more than 50 million registered users, offers perhaps the
lowest cost VoIP solution of all.
But is it a case of
'you get what you pay for' or is it a genuine bargain?
5 of a
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VoIP phone service continues to
drop in price, and also to competitively pressure reductions in
regular phone service rates.
No longer an experimental
odd-ball service with poor quality, VoIP
mainstream and easy to use.
But, mainstream or not, innovative new startup companies
are pushing the envelope
(and affordability) of this technology still further. Skype is probably the
best known example.
The evolving nature of VoIP
I first wrote about VoIP a
mere two years ago, but the concept of 'internet' or 'dog' years
also applies to VoIP. A lot is happening with this
concept, and very rapidly, and the passing time has seen
VoIP - a product that needed
careful introduction and explanation two years ago, is now accepted and mainstream. And, even if you
don't knowingly use VoIP yourself, you're benefiting
from the presence of VoIP, because the very low calling rates
offered by VoIP companies are now forcing the major long
distance companies to drop their rates.
It is now
possible, for example, to get unlimited calling plans with Verizon in some areas - a phone line, plus unlimited local and
long distance (within the US) calling is sold for less than
Chances are you might be
using VoIP without even realizing it. Many of the
regular long distance services now send your call over the
internet, although for you as caller, it seems just like another
Dedicated hardware no longer
One comment I made two years
ago possibly needs to be revised. When first introducing VoIP, I
attempted to differentiate the new dedicated phone services such as
Packet 8 from
earlier software products that simply run on
your computer, connecting to similar software on other
The big disadvantages of
most software based calling programs were (and still are) :
They only work when both you
and the person you're calling have your respective computers
turned on and connected to the internet
They only connect you to
other people using the same software
You have to learn a new
software program, rather than just pick up a phone and dial
In the past, software based products were less likely
to offer good reliable sound quality. Ever
increasing processing power in our computers, and more
sophisticated software, means this disadvantage is no longer as
substantial as before.
But, with my main computer -
a 3.2GHz Pentium IV with 1 GB of memory and fast RAID disk -
I'll sometimes notice glitches in the sound quality of a
software based voice call; glitches that coincide with the
computer being briefly busy doing some other background task.
If you want to be 100%
certain of having the absolutely best possible sound quality at
all times, you probably need to continue using a dedicated
hardware solution that is unaffected by other processing on your
computer. For many of us, though, the occasional and brief
glitches caused by your computer briefly doing something else
while you're at the same time on a Skype call are an acceptable tradeoff for the
lower cost of a software rather than hardware based phone
Skype - a hybrid product that
minimizes these disadvantages
We're now seeing an
evolution of software based VoIP services that are much more
useful than their predecessors. The best known (and perhaps best) of
these is Skype (pronounced to rhyme with 'pipe').
Skype can be considered a
hybrid product because it combines both 'pure' VoIP computer to
computer calling with access to the PSTN (the regular Public
Switched Telephone Network) too. Skype is a software program and runs on PCs,
Macs, Linux and Pocket PC based computers.
Basic and Free Skype
simplest form, you download the free Skype program, install it,
create a user profile, and then, using either your PC's sound card,
speakers, and microphone, or a plug in USB headset or USB phone
handset, you can call other Skype users, and have
them call you.
In this simple computer to
computer mode you don't have a phone
number. And you can only communicate with other Skype
So far, this is
unexceptional, and similar to many other products available.
Now for the clever extra features :
This allows you to call from
your Skype service to any phone number in the world. This
service is convenient, but not free. However, it is
typically less expensive than calling with regular phone
service and usually less expensive than calling through a mainstream VoIP service.
There is no monthly fee.
You simply pay per minute of calling, and most common
destinations are charged at €0.017 (approximately the same as
$0.021 or £0.012). Calls to mobile phones are more
expensive, as are calls to less common countries (such as Andorra,
Barbados, Cambodia, and so on through the alphabet). European
residents are charged 15% VAT on these rates; residents of all
other countries pay no extra taxes or surcharges at all.
You need to prepay for this
service, and to purchase at least €10 of credit (about US$12.50)
per transaction. As long as you make a single short call
at least once every six months, your account remains active,
meaning that the fixed cost per month is as close to zero as
Note that there is no such
thing as a free local calling area. All calls out to
regular phones are charged, no matter where in the world you are
and they are.
Calls are billed in whole
minute increments, and rates are based solely on the country you
are calling to, not the country you are calling from. Your
remaining balance is continuously displayed in the Skype program
When you are calling out,
there is a perceptible delay between selecting a number to call
and when the ring tone starts to be heard - anywhere from about
7 secs to 12 secs in testing. No Caller ID data is sent
when you make a call, because, after all, you don't have a
regular phone number to send to people. Sometimes, when
calling internationally, a strange number might appear in caller
ID (eg 1000012345 on one occasion) and when calling locally,
generally the caller ID display just shows 'unavailable'.
SkypeOut solves the first
problem - how to call someone who doesn't have Skype.
The next problem is how to
get in contact with a Skype user when they are not at their
computer, or not connected to the internet. And so, Skype
added a voicemail feature. Part of this is free, and
part will cost you money.
All Skype users can receive
voicemail messages for free, and anyone can send voicemail
messages to other Skype users if either the sender or the
receiver of the message has signed up for voicemail service.
But if neither person has signed up for the service, it won't be
possible for voicemail messages to be exchanged.
Voicemail service is
inexpensive. It is included, at no extra cost, with the
SkypeIn service (see below), or can be purchased as a standalone
service at a cost of €5 for three months or €15 for a year
(about US$6 or US$18). This is a flat rate, and there are
no extra charges for either sending or receiving voicemails.
A clever feature of Skype's
voicemail is the ability to directly send a person a voicemail
message without needing to try and speak directly to them first. Maybe it is a
commentary on our increasingly impersonal interactions, but many
times it feels more efficient and appropriate to quickly send a
voicemail message rather than to interrupt the person you are
calling with something that is perhaps not vitally time
Skype's voicemail service is
good, but has some annoying limitations which would be very easy
to resolve. It would be very helpful to be able to forward
voicemail messages to other people - the messages are stored as
data files on your computer, so forwarding them is, in theory
But there is no built in means to forward
voicemails, and because they are stored in a proprietary format which
regular audio file players such as Realplayer and Windows Media
Player can not understand, even if you manually found the
individual message files and sent them to someone else, there's
no way they could play them.
You can set your voicemail
to immediately answer the phone, or to only answer the phone if
you don't pick up the call yourself after a specified time
SkypeIn resolves the remaining limitation of most other software based computer to
computer VoIP services. You can add a regular phone number
to your Skype account, so that anyone, from any phone, can dial
you on your Skype account, exactly the same as they would dial
anyone else, anywhere else in the world.
Indeed, you don't need to
limit yourself to just one SkypeIn phone number. You can
have up to ten of them, all feeding in to your same account.
Better still, the phone numbers can be located in nine different
This list of countries is
expected to grow over time as Skype gets bigger and extends into
other countries. Not all area codes are
available in all countries, and toll free numbers are also not available.
There can sometimes be benefit in having multiple phone numbers. For example, if
you have friends, relatives or business contacts in one of these
countries, but you live in a different country, then creating a
number in their own country they can reach you at is an easy way
for them to keep in touch with you.
Unlike other 'regular'
hardware based VoIP services, SkypeIn numbers don't have many
extra features on them - for example, no call forwarding,
although Skype says it is working on this. But it does
have call waiting, and you can put one call on hold and talk to
the second caller. I don't think it possible to link both
callers into a conference, but possibly I just haven't worked
out how to do this yet. :)
It is possible, however, to
have a conference call that you start yourself, with a mix of
regular Skype users and SkypeOut people you call to as well.
Numbers are unlisted - they
don't appear in regular phone directory service listings.
Skype charge €10 for three
months of service, per number, or €30 for a year of service
(US$12/36), and this charge includes their voicemail service as
There are no extra charges
for calls received. Just the flat rate per quarter or per
How the Skype services all tie
The preceding might seem
complicated, but in reality, it is very simple :
The Skype program is
free to download, and free to use when calling other Skype
users on their computers.
If you want to be able
to send and receive voicemail, then you need to sign up for
the voicemail service, either as a standalone product or
included with SkypeIn. You are charged a flat rate per
month, with no extra costs for sending or receiving
If you want to be able
to call out to normal phone numbers, everywhere in the world, as
well as to Skype users, you need to sign up for SkypeOut and
then you will be charged a low rate per minute (most 'major'
countries are about US2¢ a minute).
If you also want to have
a phone number yourself that anyone can call in to, same as if it
was a regular phone line, you need to sign up for SkypeIn,
and then you will be charged a flat rate per month, with no
extra charges for actual calls received.
In total, if you buy all
the pay services from Skype, you'll be paying only $3-4 a month
plus the cost of outgoing calls.
This is wonderfully simple.
Download and save the appropriate version from
(about 7MB for all versions), then run the downloaded program,
which will self extract itself and install the Skype program on
your computer. Most people will choose the option to have
Skype auto-load whenever you start your computer.
You then choose a user name
for yourself, and at any time can sign up for the pay service
extensions to Skype if you want to add these.
Skype can automatically
search through your Outlook contacts to try and match any of
your contacts up with the Skype identities and import this
information into your Skype contact list. You might be
surprised at how many different people it ends up matching with
a Skype identity.
Editing contact information
is currently not possible; you have to delete the contact and
then recreate it with the correct information.
If you have more than one
computer (eg work, home, and laptop), you can put copies of the
software on each machine. Your contact lists are kept on
the central Skype network so this data will automatically follow
to whatever computer you log in from, but voicemails, once you
download and play them, are on each local machine, as are call
records, so you won't be able to replay voicemails at home that
you've already downloaded and played at work, and your call
records from work will also not be visible at home.
This is an amazing feature,
although I'm not sure if it is an official feature or an
You can be logged into
multiple computers at the same time (with the same user ID), and
then if you get an incoming call, it will ring at all computers
simultaneously. This is analogous to having a phone line
with multiple extensions.
However, there is a
potential problem. When you do this it may confuse the
Skype servers, and may show you as off-line to other Skype
The program uses an
interface much like an Instant Messenger program. The
interface is simple and easy to understand and use. Green
and red phone handset icons for placing and ending calls are
prominently shown, and you simply choose which contact person
you wish to call, or manually type in a phone number.
Most people can simply stop
reading at this point and jump on down to the
next green heading. Because, for most people, all they
want to be able to do is to place and receive phone calls.
But if you're interested in other 'goodies' and capabilities,
A nice thing about Skype (or
potentially an intrusive thing, depending on your perspective)
is that people can immediately see if you're online or not.
This makes it a bit harder to convincingly explain why you
didn't answer a call. But it is possible to set your
status so it appears you're away from your computer, even if you
One problem with the Skype
interface is that when a call comes in, a popup window appears
on the screen and takes the focus from whatever was the previous
window. This means if you're typing away and then a call
comes in, your typing gets redirected into the Skype window and
may cause Skype to do just about anything, depending on what
sequence of key strokes you're typing. This is a very poor
bit of design on Skype's part and needs urgently to be fixed.
In copying the functionality
as well as the look and feel of IM programs, it is possible to
have 'chat's (by typing) with other contacts, and also possible
to send files to each other through the program.
You can place
conference calls with up to four other people participating.
These people can be Skype users on their computers or regular
phone users on their regular phones.
Various program buttons and
tabs take you to such things as your main contact list, there is
also a call history, and configuration options to set various
Skype signals an incoming
call by playing a sound much like a traditional phone's ring
through your computer's speakers. Various other events
also trigger sounds, and you can completely customize which
events generate sounds, and what sounds are used.
If your phone service is to
be tied to your PC, you'll probably expect it to offer a lot
more 'computer type' features than you would from a regular
phone. For example, why can't it record calls and allow
you to manipulate/forward the recordings. Why not grab the
caller’s IP address and show their approximate location; and/or,
conversely, allow you to block your own location.
In other words, the very
fact of being PC-centered creates the basis for Skypes main
weaknesses - the expectation of more features than it delivers.
One feature that is missing,
but promised for the future, is webcam support, so you can send
and receive video from your other caller as well as audio.
This is already available as
from another company, though, and that leads to the next
Skype Plug Ins and Extensions
Skype has bravely published
the specifications for its service, and allows other companies
to develop products to run on the Skype network, too. Some
of these products add extra features, whereas some compete
directly with Skype's own services (such as competing voicemail
And so, in addition to the main
Skype program, there are a growing number of add-on or plug-in
type extensions to Skype (some are available on the Skype
website, others you'll have to do a bit of Googling to find).
These provide features such as being able to record
conversations and interfaces to send SMS messages and various
Skype plug-ins exist for
Internet Explorer and Outlook (available on the Skype website).
The IE plug-in seems of little use, but the Outlook one allows you to combine/merge your Outlook and Skype contacts
and might be helpful.
The vSkype plug-in gives
Skype video capabilities and is reviewed on our page about
how to add video to a basic VoIP
Skype does not
support the US 911 or any other country's emergency calling
Calls between two Skype
users, both on broadband, were usually crystal clear and
'broadcast quality'; very
much better than regular telephone to telephone service.
It was interesting to compare a call from Skype to another Skype
user's computer, and then a second call to that same person's
landline. Every time, the Skype to Skype call was better
than a Skype to landline call.
Skype is generally the
absolutely best way possible of calling to another person out of
all possible methods.
However, while generally the
best, it is not always the best. As mentioned above,
sometimes my computer would be multi-tasking and doing some
other job at the same time (eg receiving email, or rebuilding an
index file) and at such times there would be occasional pauses
and glitches in the Skype sound.
I had a consistent problem
when calling using the SkypeOut service to other people on their
regular landline phones. My voice would sometimes not be
heard by the other person, and this problem also applied if I
was accessing an auto attendant that required me to press
buttons on my phone to generate tone sounds.
Obviously something is wrong
somewhere, and although I've seen repeated messages from other
people also suffering problems with SkypeOut, I haven't seen any
relevant solutions. On the other hand, I know other users
who have no trouble whatsoever with their SkypeOut service, so I
think it is something to do with my computer and configuration,
not a general limitation of the SkypeOut service.
I asked Skype's technical
support people about this problem, but received no response.
Service and Support
Don't misunderstand what
Skype is. While dressed up as a very friendly 'free'
product, Skype has, at its heart, a very sensible business
model and revenue generating process.
Which makes it very
surprising they don't offer any type of useful
support. I'd be quite happy to pay reasonable fees
per minute or per incident for help with problems as they may
occur, but this is not offered.
This is an important
oversight on Skype's part - good support can generate revenue
for them three different ways - encouraging people to use the
software, encouraging people to get better/more use out of the
revenue generating parts of the software, and by making a profit
on selling support services.
Instead, the only three ways
you can get support are :
To read through their
knowledge base of questions and answers
To post on a public user
forum and hope someone chooses to correctly answer your
To send a form based email to
their technical support people, the response to which is a
message saying you might not get any response if the
question is already answered somewhere else.
In my case, with a problem
about their SkypeOut service (this is one of the services they
sell, not something they give away for free) I have not been
able to find anything in their knowledgebase, and have not
received any reply from their technical support people 3.5 days
after sending them a help request. And so, for the last
3.5 days, I've been unable to use the product which they sell
and make a profit on every minute I'd otherwise be using it.
If you're looking for a VoIP
service that offers good support, Skype is not an acceptable
Skype is much more
economical on bandwidth than other VoIP services. Unlike
other VoIP services which require broadband, Skype seems to work
acceptably well with dialup.
Skype uses an adaptive
codec which responds to line quality and the bandwidth
available, and requires between 25kb/sec and 130kb/sec.
To torture test Skype's
bandwidth requirement, I placed and received calls between my
laptop, connected via dialup line in New Zealand (at 51kb), and a friend,
also on a dialup line, in London. To our amazement - and
our delight - we enjoyed acceptably good quality service,
although with more noticeable latency (delay) than on a
broadband to broadband connection.
Taking things to the
extreme, I also tested Skype using a GPRS connection on a GSM
cell phone. This proved to be unreliable. In one
scenario, between Britain and the US, the cell phone user could
hear the regular user perfectly well, but the regular user
struggled to understand the cell phone user. In another
scenario, within London, the call worked acceptably well.
GPRS calling on a cell phone is unreliable and - unless you have
an unlimited GPRS plan - is probably much more expensive than
calling direct from the cellphone without using Skype at all.
Skype - the right product at
the right time?
Whether a perfect product or
not, Skype is gaining mass acceptance. As an interesting
measure of its success and growth, in a typical week, more
people sign up as new users of Skype than all the subscribers,
in total, for the largest traditional VoIP service (Vonage).
Skype says more than 150
million copies have been downloaded, and claims to have 50
million different users registered. The number of
active regular users is doubtless very much smaller, and it is
estimated that about 5% of Skype's users have signed up for one
or more of Skype's chargeable services.
I'm increasingly having
people ask me if I'm on Skype, or talking about their own Skype
experiences, or including a Skype identity in their contact
details. It may be, rather like previously happened to email and
faxing, Skype is achieving a critical mass where it
becomes necessary to have Skype, whether you like
it or not.
While the imperfections in
the product make it - to my mind and perhaps overly high
standards - not well suited for business use, some 30% of Skype
users are businesses rather than individuals. And although
joking with a friend that neither of us were about to use Skype
in a call center environment, some call center operations do use
Skype and report great success with it.
At the same time that Skype
and other VoIP companies are announcing phenomenal growth rates,
regular PSTN phone lines are dropping in number.
Annualizing the rates disclosed in Q2 2005 filings, the major
telco's are not only shrinking, but are shrinking at
Worst North American performer was Bellsouth, which
is shrinking at a current annual rate of 7.3%, compared to
'only' 4.8% same time last year. Within these overall
averages are some much more startling numbers - for example, in
Rhode Island, Verizon is losing residential users at an annual
rate of 16.2%.
Much of this loss is due to
people abandoning regular phone lines in favor of wireless
service, but undoubtedly part is due to people switching some of
their phone service from landlines to VoIP lines too.
Skype is still far from
being guaranteed of success in this fast moving market.
Microsoft's Messenger program is now adding voice conversation
support, and there are an estimated 165 million installed copies
of Messenger - more than three times the size of Skype's user
base (although it is impossible to know what percentage of the
165 million installed copies of Messenger are ever used).
Skype's opportunity is also
its vulnerability - it is a surprisingly unsophisticated product
that is relying on quickly getting critical mass, rather than
hard to copy technological sophistication. If one of the
already huge companies come up with a direct Skype competitor
that resolves the weaknesses in Skype, then Skype could
disappear as quickly as it grew.
Skype is a great additional
way of contacting other people, and being contacted by them, for
people who are at their computer a great deal. It is not
so useful as a complete replacement for a regular phone
(unlike the hardware based VoIP services).
It is easy to install and
use, and inexpensive to trial.
If you're seeking to add
some extra communication capabilities, Skype might make for a
good alternative to buying another phone line. And if you
just want to play with VoIP, the free basic Skype service is a
great way to so do.
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19 Aug 2005, last update
21 Jul 2020
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