Skype in mobile push ahead of spin-off

HONG KONG: Skype is talking with mobile handset and network companies to install its trademark Internet telephony service, an executive said on Thursday, as it seeks growth drivers before being spun off by parent eBay.

Skype had formed a strategic alliance with Hutchison Whampoa's 3 Group and was seeking similar tie-ups with other mobile operators and handset makers, Russ Shaw, Skype general manager for mobile, told Reuters in an interview.

Skype already comes pre-installed on some cellphones, though carriers in general have been reluctant to actively support the service as it circumvents their lucrative domestic long distance and international calling business.

"We'll have some really good things to share about additional carrier relationships. That will be around next year," Shaw said.

He added that the list of potential partners included wireless network operators in China, which is an important market for the company.

"We've had discussions with them (Chinese carriers)," Shaw said. "It's not going to happen immediately, but I think over the coming months we hope to have some fruitful discussion and be able to demonstrate good work and relationship."

He declined to give names, but China's mobile market -- the world's largest with more than 600 million subscribers -- is dominated by three firms, China Mobile, China Unicom and China Telecom.

Skype is also talking with carriers in North America, Europe and other Asian markets.

EBay is selling Skype to a group of investors in order to focus on its core online auction and payments business. Shaw said the disposal is on track to be complete by year end.

"It's a positive change. The new investors, I think, can bring a lot of experience into the business," he said. "It (the EBay sale) makes us an independent company again, we'll be private but independent and it's a good thing for us."

DRIVER FOR GROWTH

Facing growing competition from other high-profile services, including Google Inc's Google Voice, Skype is mostly used on desktop computers.

But it wants to move into the fast-growing mobile field, which is getting a boost from the roll-out of high-speed mobile broadband services worldwide that are necessary to make its voice-over-Internet services function smoothly.

Skype, whose technology has allowed legions of consumers to make practically free long-distance calls over the Internet on fixed lines, has made the move into mobile by seeking deals with operators such as Hutchison Whampoa's 3 Group.

It also announced a deal with Nokia earlier this year to preload its software in Nokia N900 model, and Skype software has been downloaded onto 7 million Apple iPhones.

Established in 2003, Skype has more than 520 million registered customers who use the free Web service for voice, video or text communication. But despite its size, its revenue is relatively modest -- at about $551 million in 2008 -- as the company has had a difficult time getting users to pay for its largely free services.

Skype aims to nearly double its annual revenue to $1 billion in two years.

Shaw shrugged off concerns that the company will pose a threat to mobile operators, and said the service could even help some carriers attract new subscribers and retain existing ones.

"Initially carriers are wondering what could Skype bring, is Skype a threat or is Skype actually doing something different?" he said.