Skype to Start Charging a Flat Fee

Skype, the voice over Internet protocol (VoIP) calling service owned by eBay, will begin charging $29.95 a year for unlimited calls to landline and mobile phones within the United States and Canada. The plan, called Skype Unlimited Calling, will begin Jan. 1.

The plan is available to any Skype user in the United States and Canada and serves as an alternative to the company's pay-per-call program.

Skype, which has 11.9 million users in North America and 136 million users worldwide, had been offering this service for free in the United States and Canada as part of a promotion that began in May and runs out Dec. 31.

Customers can still pay for calls individually at a rate of pennies per call, but the company found that "there is a large chunk of our customer base that would prefer to pay on a subscription basis," says Don Albert, Skype's North American general manager.

The new Skype Unlimited Calling Plan is "an affordable option that will save consumers hundreds of dollars compared to high rates charged by traditional phone companies," Albert says, noting that most other telephone and VoIP service providers charge between $25 and $40 a month. "At $29.95 for a full year, we are about 90 percent less than competing plans," he says.

When the new rate takes effect, Skype-to-Skype calls will remain free. Customers who sign up for the unlimited calling plan before Jan. 31 will receive a special half-price introductory rate of $14.95 per year, as well as a bonus offer of 100 minutes of SkypeOut credit for international calls and $50 in discount coupons for Skype-certified hardware.

The new calling plan is part of a broader strategy by eBay to expand Skype's offerings. In addition to its basic Internet-based phone service, Skype also offers file sharing, instant messaging, conference calling, voicemail, call forwarding, ringtones, and avatars.

Though Albert declined to predict the adoption rate for the plan or the revenue it could produce for Skype, he did say that the company is able to charge so little because "we are not positioning Skype as a landline replacement, mostly because you can't make emergency 911 calls with it."