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Tuesday, November 27, 2007

The World’s best phone?

Product_3skypephone_screens The spectacular title suggest I have found the definite phone. How can I make a claim that there is a best phone, when we very much know that the phone is a mass market object of  desire, many flowers can bloom. Here is my logic. Phones are voice communication devices, they are primarily used for voice, most of the cost is incurred from talking, so my argument is the phone that provides cheapest talk is the worlds best phone.

According to my analysis, the cheapest calls can be made using the Skypephone from 3. It is a small 3G phone with a crisp colour screen and simple user interface, very Nokia style, priced at GBP49.90. It offers free Skype calls anywhere, also when roaming in a 3 sister networks, so if you take holidays in Italy or Sweden for example this is perfect. Furthermore for GBP25 a month you can add International call saver, a sort of flatfee to call to 35 countries. I checked the fine print and realized that many mobile area codes are excluded, one seems to be able to call US broadly also mobile. Nevertheless a stunning deal. If you then top up more than the required GBP10/month to keep the service running you get call cost locally down to 3p a minute or 3p per text.

If you have family, friends and business spread over the world this is a stellar deal, and hence I claim it is the best phone.

I have used Fring, Gizmo, Truphone, Jajah on my mobiles, but the problem with them is that they either require data or wifi, which consume more energy than cellular, and the N95 for example cannot sustain that for long enough. There is no major magic here, the stuff they have done on this phone could be done on any platform, but it is the total package that makes it interesting and revolutionary.

The Skypephone makes a phonecall into 3 infra, where the call is routed to the Skype infra, where it leverages their VOIP technology. This to me is a best of both worlds. One gets the bandwith and energy efficient 3G call and the cost efficient VOIP call. A solution requires deep integration and dedication on both sides, one could even call it a partnership ;-)

The business logic is as follows. The user need to top up atleast 10GBP per month to keep the service running, for this the user gets some minutes that can be used to make calls 12p per minute/txt. Hence 3 will make atleast GBP120 from the user. Skype could get a small piece of this maybe 30%. With the International Flat fee, for GBP25 per month That adds up to GBP470 per year, a lot of money, but far less than the typical GBP100/Month I pay to have service from T-Mobile, where I am very very careful not to make international calls. The low price point will attract a lot of new customers for 3, they will get a taster for the service and if they are happy they will start to top up more and once you have your international deal you are hooked, the difference to the other providers are so stark. When then the Skype network effect kicks in we will really see the power of this partnership. This means one needs to wait about 6M to judge the success of this handset. The service that came closest are Vodafone with lots of minutes, passport and a business line from T-Mobile where one can use the bundle to make international calls. Vodafone is better when roaming, but it is really not an option.

What 3 does not offer is an ability to use the phone as a modem for data, which I have from my T-Mobile deal.

What would make this even better? First of all, I really would like 3 to offer 6M to 12M contracts. I would like to have it on a high end Nokia, which would not be tied to a contract. I like to keep handset and service separate, I switch phones all the time.  OK, that is me, not the consumers en masse....

Congrats to the Hutch and the Skype teams. Really good job guys!

05:02 PM in Technology | Permalink


Great post. However, I wanted to point out that the 3 Skypephone can be used as a modem. I have successfully tried it out a couple of times at home as well as in the University. Will be writing a review on it soon.

Posted by: Adam at Nov 30, 2007 6:02:29 PM

Hi Thank you !
good story

Posted by: Keith Neff at Dec 5, 2007 11:32:18 AM

You wrote it requires some partnership between Skype and the telco because of the required infrastructure, doesn't that make it unlikely several telcos in the same country would be able to offer a plan for this phone? But I'm certainly no expert in business logic, just wondering. Actually I believed this phone just had a standard Skype client ported to it and was using UMTS data/GPRS to talk directly to Skype servers. Not that I doubt it, but do you have a source for more information about this infrastructure - would be very interesting.

Posted by: Claus Conrad at Jan 6, 2008 5:17:33 PM

Skypephone as a modem: works great. I get about 116kbps.

Posted by: Tony at Mar 2, 2008 3:12:47 AM

I signed up with skype and nothing happened, I want my funds back,why was my efforts to get my phone working ommitted,

Posted by: gabriel at May 21, 2012 11:01:31 PM