Tom Keating reported that Skype will be charging iPhone users a monthly fee for Skype-to-Skype calls riding on 3G come August 2010.  Tom thinks that it is a 'dumb move' by Skype and people will be able to make outbound Skype 3G calls on a jailbroken iPhone. Rich Tehrani thinks Skype feels it has established itself as the dominant IP communications platform and feels comfortable that charging for services like mobile VoIP won't lead to tremendous market share loss.

Of course, I disagree with both Tom and Rich for tactical and strategic reasons. Skype HAS to start charging more money in the long run for a number of reasons and people shouldn't be surprised if even desktop client users have to start paying monthly fees -- the good news is that the desktop folks should have a free ride for a while longer.

First, let's talk about the tactical environment - Skype on smartphones. If memory serves, nearly every smartphone implementation of Skype has had some sort tweak to it to make the incumbent carrier happy. Verizon Wireless has enabled Skype, but calls are forced over 3G and Verizon's voice network and the app won't work over WiFi;  for anyone steeped into the world of settlements and call termination fees, this is likely to end up being a quid-pro-quo deal with minutes riding over Verizon's network being used to offset Skype charges somewhere else in the system.

Looking to the iPhone/Skype deal, I suspect that AT&T and other iPhone carriers will get a cut of the monthly fee since any call over Skype means less billable minutes. The kicker is Skype's phrase 'a small monthly fee.' A couple of dollars per month for most users is noise, especially considering what people typically spend on new apps and iTunes -- those who need it and will save money using it, will pay it gladly.

The long-term strategic environment is a much bigger concern for Skype. In January, Skype bragged that it had 12 percent of international calling minutes, but realistically, how much longer can that market share grow? Between dirt-cheap VoIP rates and carriers willing to experiment to keep those rates on their books, there has to be an upper limit to growth.

For U.S. long-distance national service and many wireless carriers, Skype is not much of a factor -- flat rate monthly plans mean people aren't looking at alternatives. In addition, wireless carriers are moving to directly SIP interconnect to facilitate a variety of services from MMS to video-calling.  In a world of all IP-calling, Skype makes zero dollars on per-minute charges. To be sure, there are profits being made playing the settlements game on U.S. long-distance calls, but sooner or later the FCC will blow up the current settlement shell games and replace it with something much simpler.

Finally, Skype is very very gung-ho on video calling, having embedded their client into TVs and promising to roll out a mobile video client on Android.  Again, there's no per-minute profits lurking in video calling, so as people move from voice calling into video, Skype is going to have to find new ways to generate revenue.

I agree with Rich Tehrani in part -- Skype is a major IP communications platform. However, the company currently generates nearly all of its revenues from long-distance billing -- a legacy source of revenue  that cannot be viewed as steady or sustainable as the world slowly moves out of TDM-style billable minutes and into an all-IP world.

The wireless world is currently moving the fastest to drive SIP-interconnectivity for rich media (i.e. MMS, video, HD voice) and two-way video calling, so it is not surprising that Skype is planning to start a monthly flat-rate billing scheme with the iPhone. Android users will likely see a monthly flat-rate scheme as well when two-way video-calling appears for that platform. Other device users (desktop, TV) shouldn't be surprised to see a Skype billing scheme down the road, but this may not be for a couple of years.

By Doug Mohney.