As the focus of mobile usage moves further from minutes and text bundles, towards megabytes of data, mobile network operators are unsurprisingly concerned at this shift, and the potential loss of revenue that it represents to them. Frustrated by the ongoing restrictions imposed upon its Skype service in the UK, Microsoft intends to lean more heavily on those networks that routinely block Skype access.
Skype complained to the UK communications regulator, Ofcom, last year about this state of affairs. In a report last week, Ofcom openly stated that such restrictions stifle innovation, indicating that action may be taken against operators that fail to properly open their networks to VoIP traffic.
When voice calls and text messages become nothing more than raw data sent across a network - as is the case with services such as Skype - operators lose the ability to charge higher (and arguably absurd) rates for them any longer.
When America’s AT&T network increased the cost for sending an SMS text message from $0.15 to $0.20 in March 2008, numerous articles cropped up – including a widely referenced example by Sam Garfield – that exposed the madness of SMS pricing. In his calculations, Garfield noted that the cost of sending the bits of data that form a text message over AT&T was as much as 61 MILLION times more than sending data over a home broadband connection. This is all the more extraordinary when you consider that the true cost to the network for sending an SMS is almost negligible, as noted by The New York Times. Little wonder then that operators are desperate to hold on to the ‘old’ way of doing things.
While major US operators don’t block Skype access, many European ones do, including the UK’s Everything Everywhere (Orange and T-Mobile) and Vodafone; the latter charges up to £15 ($23) per month for the freedom to use VoIP services on mobile contracts. While some networks, such as Telefónica O2 and 3 from Hutchison Whompoa, don’t discriminate against such traffic, Microsoft is keen to press those operators that are dragging their feet.
Skype’s Jean-Jacques Sahel told Bloomberg Businessweek that Ofcom’s support in this matter is “helpful and should allow us to continue the dialog [with operators]. We need the few that lag behind to catch up.”
Microsoft is hoping to gain “some sort of commitment” from operators to open up their networks, but that will be easier said than done. Given how accustomed the carriers have become to milking their customers with such grossly inflated pricing, they won’t be eager to roll out the red carpet to new cheaper competitors.