VoIP tipped to drive down mobile prices

Mobile phone service providers are coming under increasing pressure to cut prices as free Internet telephone services start to become widely used, experts said on Monday.

The growing uptake of Skype, a voice-over IP telephone service that can run on a smartphone as well as on a PC, is forcing mobile providers to reconsider their pricing plans, according to analyst Gartner.

"It could well drive some of the prices down," said Steve Blood, a research vice-president for Gartner. "We are seeing companies recommend their users to use Skype for long distance calls."

Skype claims more than its application has been downloaded 100 million times to date. But Gartner claimed that Skype's free service sometimes failed to provide consistent standards.

"Skype, as an opportunity, is very good," said Nick Jones, another Gartner research vice-president. "But it doesn't give quality of service and that may be a problem."

Speaking at Gartner's Wireless and Mobile Summit, the analysts said that Skype was running into problems when billing people for chargeable services — such as SkypeOut, which allows calls to landlines and mobiles. Some Skype users have complained of problems with payment processing.

But one speaker argued he liked to use Skype because it cut his mobile phone bill by 90 percent.

"My mobile phone bill has dropped from $500 a month to $50," said Peter Cochrane, a futurologist at ConceptLabs. "But you get two modes — brilliant and crap. I pay for Wi-Fi because I then get free phone calls, but network providers do not like this view."