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$3 SIM Card Puts Skype On Your Cell Phone

By W. David Gardner
April 24, 2009 01:44 PM

Skype's future continues to be prophesied in Europe as U.K. mobile phone operator 3 works to push the VoIP service on its mobile phones, including a new low-cost service that will enable consumers to make Skype calls virtually free of charge.

In a service announced in London this week, 3's CEO, Kevin Russell, and Skype president Josh Silverman outlined the service that will debut May 1. Subscribers with GSM phones -- the standard in Europe -- can purchase a Skype-oriented SIM card for less than $3 and make free calls to other Skype users free of charge.

When users activate their handsets with the new SIM card, they'll be sent text messages with instructions on how to install 3's Internet settings and download Skype software. New users can buy a 3 Skypephone. The carrier began offering its first Skypephones in October 2007 in nine countries where it operates, including Austria, Denmark, Italy, Ireland, and Sweden in Europe. The carrier doesn't have service in the United States. Skype is a unit ofeBay (NSDQ: EBAY).

Russell also said 3 will offer a new Skypephone in the fourth quarter of 2009. While he didn't reveal any precise specs of the phone, there has been speculation that it would have a full QWERTY keyboard, which would facilitate the IM features available with Skype calls.

According to media reports, Russell reiterated 3's intention of focusing on mass-market subscriber services and eschewing high-end services and handsets. Regarding the iPhone, Russell said: "It's a great product, but our focus is on the mass market."

The U.K. carrier has been selling Skypephones for a set price and betting that subscribers will sign up for the economical Skype service and later pay for more costly services and data applications. Skype service also will be offered onNokia (NYSE: NOK)'s N97 handsets later this year.

The 3 and Nokia approach is diametrically different from Germany's T-Mobile, which has vowed to block Skype connections on iPhones, to which it enjoys exclusive rights in Germany. A European trade association that includes Google and Microsoft (NSDQ: MSFT) has appealed to European Union officials to ensure free calling access that would permit consumers, including those in Germany, to use Skype.


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