Will Skype Lose Its Charm As It Starts To Charge For 3G Calls?

Skype, the pioneering VoIP company, says people have downloaded five million of its apps on Apple (NASDAQ: AAPL) iPhones.

Skype means to leverage its new universe of 3G users by  charging them to make calls over the AT&T (NYSE: T) network beginning later this year. That may result in Skype quickly losing its charm with users.

Skype said that calls made using WiFi will still be free. But, the charges will apparently apply to Skype-to-Skype customers,  a service that was free until now.

Skype has  improved its service since it started in 2003. The firm has added video calls. Skype used to only work on PCs. Now it works on portable devices. Skype’s popularity can hardly be questioned. The company claims it was responsible for 12% of global international calling minutes, with its users making 3.1 billion minutes of calls to landlines and mobiles in the third quarter of 2009. As many as 23 million users are logged on its service at any one time.

Skype has already begun to charge for some types of calls including those made from Skype subscribers to people who are not a member of its network. But, offering a service that the public believes is free at a cost carries great risks.

EBay (NASDAQ: EBAY), Skype’s owner for several years, sold a two-thirds interest in the company last year for $1.9 billion and a $125 million note. The investors in the deal expect to get their money back, and almost certainly a healthy return.

Skype has largely been a free service since it founding because it was an alternative to paid phone services. Charging customers for 3G calls be its undoing

Douglas A. McIntyre