Skype Debuts on the iPhone

Using a Wi-Fi connection, people can now make cheap international calls with Apple's gadget.

The Internet phone service Skype already offers a way to make free or inexpensive calls to anywhere in the world via an Internet connection. Today, the Luxembourg-based company behind Skype releases an application that runs on Apple's iPhone and iPod Touch over a Wi-Fi connection.

Long distance: A screenshot of the new Skype iPhone app. The software can be used to call Skype contacts as well as regular phones. Credit: Skype

The service is already available on some Nokia phones and those running Windows Mobile or Google's Android. But its emergence on Apple gadgets is significant. According to one recent industry report, the iPhone is responsible for 50 percent of all mobile traffic in the U.S.

Skype isn't the only Voice-over-Internet Protocol (VoIP) application available on the iPhone--Truphone, Fring, and Nimbuzz are other examples. But these apps do not offer as many features as Skype or access to Skype's network of more than 400 million users worldwide.

As with other VoIP applications, Apple will limit use of Skype to Wi-Fi networks and will not allow Skype data to travel over the cellular network, which is operated by AT&T in the U.S. This will help shield AT&T's voice-minutes and text-messaging revenue. Furthermore, with the current state of Wi-Fi coverage, it's unlikely that VoIP will provide a true alternative to cellular voice plans.

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AT&T would not comment on the Skype application specifically nor on mobile VoIP in general. But some cellular providers have been more proactive about protecting their voice revenue. T-Mobile USA, for one, has modified handsets so that they can identify calls made using VoIP software and WiFi connections. It then charges these calls against a subscriber's wireless minutes unless he or she has signed up for an additional plan that costs $10 a month.

In the future, a technology called deep-packet inspection could play a role in moderating how successful VoIP on mobile devices ultimately is, says David Chamberlain, analyst for research firm In-Stat, who is based in Arizona. "If mobile operators decided that there is too much traffic on their network and they see a packet they don't like, then they can reshape the traffic," so that certain packets are reprioritized. This way, Chamberlain says, voice traffic sent over the data network could be prioritized and slowed down en route, which would degrade the quality of the call. If Skype proves too popular, he speculates that service providers might be forced to take this route.