Unbound Spiral: Skype Raids its Customer Base

February 1, 2007 11:26 AM

Most of us know what happens when you stir up a hornets' nest. They come after you. The clamor from Skype customers will reach a roar in just a few more weeks. Most of Skype's customers are blissfully unawares that they have just been sprayed with Raid (a bug killer). This dealthy spray may lay waste to Skypeland in just months.

What am I talking about?
I'm talking about the cost of Skype Calls. Effectively without telling you Skype has raised the cost of every Skype Call. They call it a connection fee. So you make a less than 30 second call and leave a quick voicemail. In the good old days of SkypeOut this action cost you 2 cents. You would probably be surprised to learn that today the same call will cost 6 cents. Not much if all your calls are one hour long. A huge amount if the other person isn't there.

That is where Skype screwed up on all their logic. They said.. everyone makes long calls and they will never notice. Well this user has noticed. I've been stirring up a few buddies in the background too. I've spoken to no one that thinks it is really smart. The reasons why stories are just crap. When Gizmo lets me call for 1 cent per minute in the US why even contemplate getting hit for six cents just to find out if they are there.

Come on Skype!
The most popular message on Skype is "can you talk now". What does that tell you. It says that people want to manage their interruptions and be polite. It also says that the most efficient way to connect with someone is send a text message. So what happens. We now penalize  the user that wants to call using Skypeout. We increase the risk factor that the failure a voice mail box will be costly. Which now costs three to four times as much.. Crazy! It's the biggest incentive yet found to encourage users not to use Skype. See if your friend isn't there. Resort to mobile plan and SMS them. Skype SMS is just too expensive and not two way. 

It's worse... Skype didn't communicate this to me.  I am fairly sure about this. They certainly didn't force a note into my client like they do for other services the first time and the second time they tried to charge this. No warnings.  Then I do get a lot of emails. Skype one's aren't high on the agenda. So I'm like everyone else in this regard. I really have no idea.... I also have a US address registered with them for SkypeOut. They are sending me $14.95 deals / offers which as I've spent the month in India I could not buy. Plus even if I had, I'd still get the connection fee hits when I'm in places like India, the UK or New Zealand.

This new charging structure is basically an additional tax levied on users. It's a pure profit play. It obviously relates to payouts, revenue, profits and bonuses related to the Ebay payout. A few billion. Get the details elsewhere.

I bet most users never even look at their account and call logs and see how much they were charged. However, they soon will. The new charges mean your balance will go down more quickly. It's also visible on the client. 6 or 8 cents for a call just over a minute to leave a voice mail will quickly be picked up.

I'm not even going to bother linking to the other posts I've seen on a few people trying to figure this out. You can also go and read the comments on Skype's own blogs. The views mimic this sucks.

My observation and advice is simple
Skype screwed with your rates and the basic deal that you thought you had with them. They have done a lousy job communicating it and the impact on you.

I could calculate the impact on my own bill for the last six months or year. Not really worth my time. Simple conclusion. Look for another VoIP provider for calling out. Skype is certainly no longer the best value for money. Connection charges like these are not consumer friendly. They were designed by Telecoms to make more money.

What did I just say? Schemes like this were designed by Telecoms to make more money. What does that mean? It means that Skype has sold it soul and now believes it is a telecom.... Shame really. It wasn't the dream the users had for Skype or the reason they supported Skype. Then they just changed the tagline too. Some bs is flying around the blogs about that too. No need to comment further here.

If my previous post wasn't crazy... Maybe that's just enough reason for Nokia to embrace and try and push forward SIP for the mobile world. In the end the mobile will determine the desktop. We've been through a short period in time where the desktop defined the future of VoIP. Skype was that story. Time for everyone to focus on what next. And it is not really about rates; it is about services.

In the meantime those of you that still watch for and read my blog... Watch your pennies and keep an eye on the Skype fine print; because you now have a company that happily slips it by you.

For me it is a clear strategic mistake. It seems caution and good business sense was also thrown to the winds in this one.






Technorati Tags: , , , ,


TrackBack (0)

Comments (2)

If I remember correctly, the telecoms didn't have connection charges as such, but they used to charge for a minimum of 3 minutes or something like that. In that respect, Skype has done one better.

But then I have always maintained that Skype was only perceived a revolution and that is becoming transparent, in the guise of EBay payout.

Posted by: Aswath [TypeKey Profile Page] at February 1, 2007 12:53 PM

Skype by in large has educated and created a market (mainly their own customers) with respect to PC based calling solutions, this is the risk and benefit of being first. Will this move cause en masse exits of Skype users? Probably not, Skype has other benefits that outweigh SkypeOut costs, where they will see the biggest impact is in the customer base that actually PAY's them. I would love to have been a fly on the wall at the meeting when they decided this move. I am sure there was some heated discussion.

Posted by: Andrew at February 1, 2007 4:41 PM