Is Verizon's Skype Deal A Game-Changer?

Today, Verizon Wireless announced a deal with Skype to allow some of its smartphone customers to use the service to place and receive calls to other Skype users, without using their plan minutes or Verizon's international calling pricing. Instead, users would pay the much lower rates that Skype charges. This sets an interesting new precedent for wireless service providers, who have traditionally insisted on forcing users to pay their international calling rates. It will definitely put pressure on other service providers to allow their smartphone users the same freedom.

The details of the deal are fascinating:

The two companies have created an exclusive, easy-to-use Skype mobile offering for 3G smartphones. Verizon Wireless 3G smartphone users with data plans can use Skype mobile to:

- make and receive unlimited Skype-to-Skype voice calls to any Skype user around the globe on America's most reliable wireless network;
- call international phone numbers at competitive Skype Out calling rates;
- send and receive instant messages to other Skype users; and
- remain always connected with the ability to see friends' online presence.

I've already mentioned the significance of the long-distance calling at Skype rates. They're generally much lower than those dictated by mobile providers like Verizon. But it's also interesting that Verizon would allow unlimited calling from Skype-to-Skype: that will also let customers who use Skype to talk more without paying for additional minutes.

So does this mean that people can just throw their voice plans out altogether and just pay for data? Not quite. Verizon considers this an enhancement to their voice plan, meaning that you still have to pay for the voice component -- no matter how little you ultimately use it, even if you prefer Skype. As a result, this plan likely mostly benefits those who do a lot of international calling or would use more Skype minutes than Verizon's most minimal voice plan offers.

Also consequential is the fact that the application would be run in the background on these smartphones. Currently, that would not be possible on some other devices, most notably the iPhone. It does not allow users to multitask. As a result, even if AT&T decided to allow Skype, unless the iPhone software is altered to allow this possibility, the service would be far less powerful.

It's interesting that Verizon has chosen to go the route of working with Skype, rather than fighting the inevitable. Since voice calls are possible through data networks, it was just a matter of time until service providers decided to cave and allow customers to utilize that capability. Verizon must have decided it might as well be the first-mover here. The deal might also be a direct attack on AT&T's decision not to allow data-based calling through the iPhone.

But as I noted, for now, Verizon is still requiring users to pay for voice. I suspect that will change in the years to come as well, but probably will include usage-based (and/or more expensive) data fees. That way, if you're using the data network for all of your calling, you'll pay for those additional megabytes used, instead of more minutes of voice. Indeed, Verizon already appears to be setting the stage for that day.