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3 to offer £2 SIM cards for free Skype

The operator hopes to attract its rivals' customers with the offer of an inexpensive SIM card that requires no credit top-up in order to make calls and send instant messages over Skype
Written by David Meyer, Contributor

The mobile operator 3 is to offer free Skype voice calling and instant messaging to users of its pre-pay SIM cards.

3 and Skype announced the offer on Thursday. The deal will be rolled out in two stages: from 1 May, 3's existing pay-as-you-go users will not need to top up their credit to use Skype; and, from some time this summer, other operators' customers will be able to buy £1.99 3 SIM cards for their unlocked 3G handsets and will get free Skype use with no top-up required.

At a briefing in London, 3 chief executive Kevin Russell pointed out that most operators prohibit the use of VoIP services such as Skype on their handsets, and said that those networks' customers "will be able to use [3's] network for Skype and will not have to pay a penny for it".

"We believe that, once you come to 3 and use Skype, you will use other services on 3," Russell said. "We are targeting anyone who uses Skype today."

Russell said offering free Skype would be "an exciting brand differentiator" for 3, and suggested the extra data traffic 3 would be handling for no return was "not significant relative to the investments [3 is] already making in mobile broadband".

3 and Skype have already had many tie-ins over the past two-and-a-half years.

The free Skype services that will be offered by 3 include voice calling and instant messaging to other Skype users, but calls to landlines or standard mobile numbers will require a credit top-up. The proposition remains UK-only for now, so users will not be able to get free Skype access when roaming across other countries' 3 networks.

Telecoms analyst John Delaney, from IDC, told ZDNet UK at the briefing that 3 could only succeed in the mobile marketplace by remaining a "challenger", and that the operator was unlikely to significantly affect its own voice revenues by offering free Skype calls.

"I'm pretty certain that most Skype calls at the moment go to PCs, so that doesn't cannibalise voice revenues," Delaney said. "As long as the user base remains relatively small, that makes sense [for 3]."

Delaney added, however, that he was sceptical about the idea of other operators' customers bringing their own handsets over to 3. "Once you can do that, you don't have to churn from your old operator to use Skype for 3," he said. "Either way, you have a 3 SIM which you can use only to use Skype for free, so this could erode [the attraction of 3] using Skype to drive customer acquisition."

"The biggest benefit for 3 in all this is pissing other operators off," Delaney suggested.

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