When Microsoft bought Skype for $8.5 billion in 2011, the VoIP service set out on a path of deeper integration with core Microsoft services like Xbox Live and Windows Phone. Months after the deal was finalized in October, Skype's still notoriously absent from Windows Phone 7. According to Skype, the app is coming soon, but it may not tie into the Windows Phone OS until Microsoft's next big update. That update can't come soon enough for Microsoft: the company could really use killer apps for Windows Phone 7, and Android and iOS are already happily equipped with Skype.
Why is the VoIP service important for mobile devices, anyway? Well, 700,000,000 minutes are spent making Skype calls per day according to Skype statistics from September 2011. Sixty five million people sign in daily. With video chat now available on iOS and Android through a third-party platform, Skype has the technical capacity to do something very powerful: threaten the structure of the telecommunications system.
Cellular providers constantly take abuse for data plans that grow more expensive and limited every year. 3G and 4G services cost a lot of money, and as cell phone users we have little choice but to pay up. Minute plans aren't criticized nearly as regularly, but they're just as bad. They might even be worse. Since the arrival of the iPhone, you've probably heard a dozen variants on this joke: "My smartphone can do all kinds of awesome stuff! Oh, and it can make phone calls too, I guess."
Smartphones are better pocket computers than they are phones, but we're trained to pay for phone subscriptions. We've been doing it for years and decades. And we don't really have a choice. Sprint, Verizon, and AT&T all charge a baseline of $40 for 450 minutes of monthly talk time. Would you pay $20 for 225 minutes, if you could? Or $10 for two hours of talk time per month?
As a VoIP service, Skype stands apart from those subscriptions. Nevertheless, it does offer the opportunity to make calls at much lower prices than we currently pay for mobile talk time. Skype-to-Skype calls and video calls are free. Calls to landlines and other mobile numbers cost a bit more than two cents per minute, or a whopping 10 bucks for 450 minutes of talk time. That's just pay-as-you-go pricing: it's cheaper with a subscription.
Imagine Skype as a third-party app implemented as effectively as FaceTime and iMessage are in iOS. FaceTime makes it very, very easy to face chat with another person, but it's proprietary to Apple and its devices. iMessage makes it so easy to use instant messaging in place of SMS that it's practically an invisible feature. Again, it's an Apple-only feature.
Skype could do that with phone calls, and in fact Skype Mobile on Verizon is a noble attempt. The service charges you Skype prices on calls to non-Skype phones (those are free) and won't use your wireless plan minutes. Too bad we're already paying $45 for a large pool of minutes we'll never use up.
The problem, once again, is that big cellular companies make the rules--and they like charging for wireless minutes.
So we come back to Skype on Windows Phone 7. If Microsoft's "deep integration" manifested in the form of a smart VoIP service that automatically routed calls over Wi-Fi or 3G/4G when it was cheaper than the cellular network, they'd have their killer app. If that sounds vaguely familiar to you, it's pretty much the paradise Republic Wireless is trying to offer: a cellular service free of minute and data plans. The problem, once again, is that big cellular companies make the rules--and they like charging for wireless minutes.
Services like Skype could give cellular users the tools to push for data-only plans from carriers like the tablet data subscriptions they already offer. The problem, then, is getting them to put out new devices--carriers count on those two-year contracts for income. With devices only available on AT&T, Windows Phone 7 is already limited in availability.
Realistically, Microsoft could turn Skype into its own version of FaceTime with little effort. As a VoIP client it's ultimately limited by the fact that cell phone minute plans are mandatory; as a video chat service, it's poised to connect Windows Phone 7 users to each other and to millions of people on Macs and PCs and future Xbox consoles. Microsoft paid eight billion dollars for this service--integration with Windows Phone 7's contacts and one-click video calling is the least we should hope for.