Believing the Skype

Tuesday, May 16, 2006

When Kevin Cantwell's son attends Oxford next year in England, the two will be staying in touch by computer.

And we're not talking e-mail here.

Cantwell, president of Cape Girardeau-based Big River Telephone, and his son will both be hooked up to Skype, the free voice-over-Internet protocol system.

"I'll be able to tell when he's online, click a button and we're talking," Cantwell said. "When I was selling video tele-conferencing 10 years ago, it was $400,000. Now it's a Web cam plus Internet and it's away you go."

After learning about Skype, Cantwell was so intrigued that he contacted the European company. Now the two are working on a business partnership that would include Big River providing Internet and Web cams to local customers. They've already got some customers hooked up as part of a trial before determining if they will roll it out to everyone.

"We're going to look at some network stuff and applications and see how we could work together on some things," he said.

The founders of Skype -- Niklas Zennstrom and Janus Friis -- were featured in the most recent issue of "Time," which focused on the people who "shape our world." VOIP calls are placed over the Internet, the article explains, using the same underlying transport technology that a Web browser uses.

If you become a Skype user, you can use your computer to call any other Skype user free in the world. The pair sold Skype to eBay last year for $2.6 billion, but they continue to run it. Even though they give the service away, they expect to make money by selling add-on features such as customized ring tones and voice-mail subscriptions.

There are also fees -- ranging from 2 to 4 cents a minute -- for using Skype to call land-line or cellular phones. The two men also created Kazaa, the free file-sharing program that riled the music industry.

Skype says it now has more than 100 million registered users worldwide. Luxembourg-based Skype had 54 million members when it was bought last September.

The number of people who use Skype regularly may be far less than the number of registered users -- Skype reported last week that 5.9 million people were logged in.

At the most recent First Friday Coffee, Cantwell was giving away Web cams to promote its idea. (I won one.)

Cantwell said he has been talking to Skype's president of North America -- through Skype naturally.

"This is the next level of customer service," Cantwell said.

While the service is free, Cantwell said customers have to have Internet service to use it. That's where Big River would come in.

Skype is really popular in Europe, he said, noting that Skype has the largest download of software in history.

"Skype is huge outside the U.S.," Cantwell said.

And Cantwell is hoping it catches on here, too.

"I don't think the technology is the driving force," he said. "I think it's the application. People are going to have to try it."

Internet phone providers like Skype are creating upheaval in the telecommunications industry and putting pressure on traditional operators with low prices and added features.

More and more phone provider options are on the horizon, including cable companies that will soon get into the fray. Companies like Skype will make a dent. The new philosophy may be that talk shouldn't be cheap -- it should be free.

Scott Moyers is editor of Business Today.

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