Hutchison’s 3 to offer Skype-enabled handsets

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Hutchison Whampoa’s 3 networks are to sell handsets with Skype software built in, in the boldest step yet by a European mobile network operator to branch into potentially disruptive voice-over-IP technology.

At the 3GSM Congress in Barcelona on Tuesday, Hutchison’s 3G Europe managing director, Christian Salbaing, said a trial of the service in Sweden would likely result in a rollout in that country later this year.

Mr Salbaing said all Hutchison’s Three businesses in Europe would eventually offer Skype 3G phones, and he believed all Hutchison’s other networks were likely to follow suit. Hong Kong-based Hutchison Whampoa also operates Three networks in Italy, the UK, Denmark, Ireland, as well as Australia.

Skype, a free downloadable programme, allows computer users to make free or very cheap phone calls using the internet instead of traditional telephone voice systems. The two-year-old company was bought by eBay last year for $2.6bn.

However Hutchison will limit risks to its revenue by ruling out “dual-mode” handsets, which can use free wireless internet hotspots as well as mobile networks.

Analysts acknowledged the tie-up could lead to some increase in pricing pressure but appeared generally underwhelmed by the announcement.

“It all sounds very exciting but in reality it is probably less so,” said Robert Grindle, telecoms analyst at Dresdner Kleinwort Wasserstein in London. “Skype isn’t free to other mobile phones so round the edges there might be some impact [on pricing] but it sounds more like marketing hype.”

Around three-quarters of all calls from mobiles are made to other mobiles and the cost of calling a mobile phone from a computer with Skype is not always cheaper than a traditional call. “There is a reasonable chance that it would be cheaper to phone another mobile using your mobile operator’s network than to use Skype,” said another analyst.

Mr Salbaing said it was too early to say whether it would lower average revenue per user (arpu), but added: “We don’t think we’re going to bring values down, it’s going to enhance the value proposition.”

Hutchison had already spoken to some mobile handset manufacturers about making phones that would specifically support Skype. “Obviously the quality has to be at a level where the customer will again be prepared to pay for it.”

Just a few hours earlier at 3GSM Alan Harper, group strategy director at Vodafone, said he believed mobile voice-over-IP services were two to three years away from being a mass market product.

Christian Salbaing, Hutchison’s managing director of European telecommunications, said all Hutchison’s Three businesses in Europe would sell Skype and he believed all Hutchison’s other networks were likely to follow suit. “The logic would be: yes,” he told the Financial Times. Hong Kong-based Hutchison Whampoa also operates Three networks in Italy, the UK, Denmark, Ireland, as well as Australia.

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