The whole world chats for free with Skype

“Let’s Skype tonight” – phrases like this are becoming increasingly familiar, indicating that the name of the leading VoIP service company has been transformed into a verb and widely adopted in the Internet user community.

Skype, headquartered in Luxembourg with offices in London and Tallinn (the capital of Estonia), was recently acquired by the online auction giant eBay for a price many consider exorbitant: $2.6 billion, plus an additional $1.5 billion in bonuses if certain targets are met by 2008.

Skype software allows users to connect online and make free calls with sound quality that rivals traditional telephones. The program was developed by the creators of the peer-to-peer file-sharing technology Kazaa (Niklas Zennström and Janus Friis), which transmits data directly between two endpoints rather than through a server. However, Zennström stated, “Skype is entirely different from Kazaa because it allows us to communicate directly with any telephone. This software has significantly cut into the revenues of major telecommunications companies, which are still relying on outdated technology.”

Two years after its launch, Skype had approximately 46 million registered users worldwide, more than any other VoIP service provider. The company offers free PC-to-PC calls but charges for calls made to traditional landline and mobile phones (SkypeOut).

Unlike traditional long-distance international calls that charge based on the distance between two countries, SkypeOut’s pricing is based on the relative development of a country, the volume of incoming and outgoing calls, plus some additional fees. This means that a SkypeOut user will pay the same rate for a call to Hanoi, regardless of whether they are calling from within Vietnam or from the United States. The cost to call countries in the “first world” is currently $0.02 per minute, payable via credit card, check, or online services like PayPal and Moneybookers. The deposit is either $12 or $24 and will automatically expire after 180 days of inactivity.

With SkypeIn, users can register for a fixed phone number. If their friends do not use Skype and call this number, they can still receive the call on Skype from anywhere. For instance, if you register a number in Chicago but are traveling in Paris, friends in Chicago can still reach you and only incur local call charges. The Beta version released in March allows customers to register up to 10 numbers from the UK, USA, France, Hong Kong, Denmark, Finland, Norway, Sweden, and Estonia for $35 for 12 months or $12 for 3 months. Also announced on March 10 was SkypeVoicemail, which allows users to leave voice messages if the Skype user is offline or on another call.

Additionally, Festoon is a supplementary feature of Skype that operates on computers using Microsoft’s operating systems with Internet Explorer version 5.0 or higher. With Festoon, customers can make group video calls with 2 to 200 participants and share applications, spreadsheets, photos, etc.

Skype can be downloaded for free directly from the company’s website and operates on Windows 2000, Windows XP, Windows CE (Pocket PC), Mac OS X, and GNU/Linux.

In Vietnam, Skype has not gained much popularity due to the lack of Vietnamese language support and the limited functionality of PC-to-PC calls.

According to research firm Gartner, by 2009, about one-third of Americans and Europeans will abandon traditional telephone lines in favor of wireless broadband phones as a cost-effective alternative. By that year, it is also expected that 70% of conversations worldwide will take place over wireless connections. Skype will continue to be a widely favored service, despite Gartner’s prediction that many VoIP-integrated landline phones will emerge.

VoIP is also making its way into instant messaging (IM) systems. In the upgrade of Yahoo! Messenger to version 7.0, the world’s largest online service focused primarily on Internet phone features, optimizing audio quality through broadband connections and dialing. “After email and IM, VoIP is opening a third chapter for popular applications on the global network,” asserted Frazier Miller, Director of Yahoo Messenger.

Similarly, the strategic move in introducing Google Talk by the current number one search engine also focuses on voice conversations, placing the company in direct competition with Skype.

Last week, Microsoft Chairman Bill Gates declared: “The VoIP era has exploded, and we want every application from our corporation on computers to be able to connect beyond traditional boundaries.”

Quietly launched and relatively unknown, VoiceVNN by VASC has not charged for calls between two computers for over a year now. Recently, the Vietnam New Generation Telecommunications Center (VNGT) also introduced the free Voice 777 service for PC-to-PC calls. Unlike international phone cards like FoneVNN, SnetFone, and Net2Call, with just two computers connected to high-speed Internet and using the Voice 777 account, users can talk “across the ocean” without worrying about costs. Moreover, unlike Skype, VNGT customers are allowed to use devices such as Zoom’s integrated modem or IP Phones to make calls as easily as with traditional telephones without needing a PC.