Start-up slashes cost of international wireless Cambridge firm uses Skype technology to make cellphone calls http://www.boston.com/business/technology/articles/2005/08/01/start_up_slash es_cost_of_international_wireless?mode=PF
By Peter J. Howe, Globe Staff | August 1, 2005 CAMBRIDGE -- In just one year, computer users around the world have downloaded 140 million copies of the Skype program that lets them make free phone calls over the Internet to other Skype users. Now a Kendall Square start-up is pushing Skype into a new frontier: cellphones. Through a $10-a-year software rental that goes on sale today, iSkoot promises to let people make international calls to other Skype users for nothing more than the price of local air time for the link from their cellphones to their broadband-connected home computers. Just as Internet phone technology has slashed the price of making conventional landline long-distance calls and enabled unlimited calling for as little as $20 a month, the iSkoot technology could put pressure on still-exorbitant wireless international calling charges. Cingular Wireless and Verizon Wireless, the two biggest US carriers, charge $1.49 a minute for calls to Europe and India, and rates as high as $3 for less common destinations like Madagascar. Subscribers willing to pay a $4 monthly fee can get lower rates, such as 19 or 20 cents a minute to most of Europe and 30 or 35 cents to India. But Verizon warns it can require a $500 security deposit for international long-distance subscribers. Market data suggest a big market for international cellphone calls. According to a survey by Telegeography, a market analysis and research firm in San Diego, 20 percent of all international calls originated on cellphones in 2003, the most recent year surveyed. In the United States and Canada, the figure was 5 percent. The iSkoot founder, Jacob Guedalia, said his vision was to ''enable the individual to become his own long-distance carrier" by routing calls over a home or office computer connection, instead of AT&T or Sprint. Thanks to moves by Skype to make its software code available to other technology developers to build new services and products that run over Skype, Guedalia said, ''We can take the voice-over-Internet revolution, which until now has really been confined to the personal computer, and bring it to the mobile world." Executives at top wireless carriers, who could lose millions of dollars in international calling revenue, are taking a wait-and-see attitude. Although carriers like Verizon and Cingular maintain wide latitude to terminate customers they deem to be misusing their service by doing things like making excessive free night and weekend calls, functionally iSkoot resembles using a calling card or company conference bridge for an international cellphone call, which normally carriers don't block. ''The concept raises a number of issues," said Cingular spokesman Martin A. Nee. ''We want to take a closer look at it before we take a position." Verizon Wireless spokeswoman J. Abra Degbor said the carrier would have no public comment on iSkoot but would be in touch with the company directly about any concerns it had over the acceptability or legality of the service. Like Internet search powerhouse Google.com, Skype, which is run from offices in Estonia and England, has in recent months begun publicizing so-called application programming interfaces to encourage other technology companies to build services that increase business for them. After programmers figured out how to open Google Maps to create cartographic displays of everything from gas prices and traffic jams to crime reports, Google last month began publishing the map API to encourage more use of its technology. Other services like iSkoot built onto Skype include a made-for-Skype answering machine, phones that plug directly into Skype-enabled computers, and a service that pauses computer music players when a Skype call comes in. The website Echostore.com offers a device that can enable cellphone calls through Skype, but it requires buying a $99 box instead of paying $10 a year for just software. Asked why iSkoot has picked such a low sales price, Guedalia said in a recent interview, ''We don't want to lose ground because we are in love with our profit margins. If the first 42 million Skype users buy it for $10," he joked, ''the last 1 million can have it for free." Guedalia has previously started and sold three companies, including two Internet video imaging companies and, most recently, Mobilee, a Chestnut Hill speech-recognition systems company that NMS Communications Inc. of Framingham bought for $13 million in 2001. To receive a call on a cellphone through Skype, all that an iSkoot user has to do after downloading the iSkoot program is set up forwarding, to redirect incoming Skype calls to the cellphone number. Making outbound calls is a little more complicated. After registering the cellphone number with iSkoot, the user creates and sends a text message to the e-mail address [EMAIL PROTECTED] The text message can contain either a phone number, a Skype speed-dial number, or a screen name for someone in the user's Skype ''buddy list." The iSkoot software extracts the phone number to be dialed from the message, and sets up a conference call -- through the Skype-connected computer -- between the user's cellphone and the Skype computer or phone number of the person the subscriber is calling. In trials at iSkoot's offices, the process normally took just eight to 15 seconds. So-called SkypeOut calls to phone numbers, instead of computers, generally cost an extra 2 to 3 cents per minute in Europe and East Asia, and more in poorer developing nations that charge higher call-termination rates. Peter J. Howe can be reached at [EMAIL PROTECTED] You are a subscribed member of the infowarrior list. 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