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Skype boosts results for exclusive operators

3 UK says 80% of its Skypephone customers are new, and have low churn

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Good news for operators like Verizon Wireless, which have thrown their lot in with Skype rather than fighting the open web tide. The pioneer of cellco-Skype deals, 3 UK, claims the arrangement has brought it a massive boost to earnings.

Research by CSS Insight showed that the benefits of Skype - or rather, the way 3 has marketed the service - have far outweighed the much-feared cannibalization of conventional voice revenues. Nearly 80% of 3 UK's Skype users over the past year are new to the company, and on average, they deliver 20% higher ARPU and 14% lower churn than the rest of 3's base (this might not be as marked at some other cellcos, since 3 tends to focus on prepaid and lower priced user profiles).

Skype's EMEA market development director, Enrico Noseda, told Mobile Today: "Our deal with 3 UK has been extremely successful. There is great satisfaction on both sides. This is evidence that Skype is an opportunity rather than a threat to carriers. Skype users are clearly much more active communicators than non-Skype users."

However, Skype is clearly aware of the value of choosing carriers carefully rather than going for a scattergun approach. Though few operators actually block the service any more, only a handful has offered active support, including an optimized application and free calls over 3G - and so these tend to promote such a rare differentiator aggressively. The first was E-Plus in Germany almost five years ago, and Verizon has been the most high profile. 3 has launched Skype-branded handsets, made by sister company INQ and designed to deliver a smooth VoIP experience, and included Skype in many of its most appealing bundles and propositions.

Noseda is clearly aware of the benefit of making such a difference to a carrier. "I am not sure we would go ahead with different players in one country," he said in the interview.

However, the Skype offering could get slightly less attractive from next year, when there are plans to start charging for Skype-to-Skype calls on 3G, as well as coming under pressure from the looming Google Voice for Android. Critics claim Skype and 3 will be breaking the promise of "free Skype-to-Skype calls forever".

Copyright © 2010, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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