Skype Launches Business Phone Service

Aiming to boost revenues ahead of its planned IPO, Skype Monday formally rolled out its phone service for business users. Previously in beta for the last six months, Skype Connect 1.0 ties into a company's existing private branch exchange (PBX) or Unified Communications (UC) phone systems to make low-cost voice calls.

Businesses using the Internet-based phone service pay $6.95 per line and calls made to landlines or mobile phones are billed at Skype's standard rate of 2.1 cents per minute. Incoming calls from Skype subscribers are free and companies can receive calls from Skype-connected users worldwide by adding a click-to-call buttons to their Web sites. A hotel, for instance, could use that button to let Skype users make a reservation.

So the idea is essentially to extend Skype's low calling rates for consumers to companies and tack on a monthly fee per user. In its securities filing earlier this month for a $100 million IPO, Skype revealed that of its 560 million registered users, only 8.1 million, or about 1.5%, are paying customers on a monthly basis.

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Skype's plan is to increase that proportion by building up the enterprise side of its business. "As we seek to develop new communications services products and expand our Skype for Business offerings, we expect our net revenues attributable to our consumer users to decrease as a percentage of total net revenues and our revenues from business users to increase both in absolute terms and as a percentage of total net revenues," the company stated in its IPO filing.

During the beta period for Connect, Skype said more than 2,400 customers worldwide had signed up for the service. It also noted that Connect is certified to work with PBX and UC systems from Avaya, Cisco and ShoreTel, among others, and now offers dedicated customer support including real-time chat. The same goes for Skype Manager, the Web-based tool that allows IT administrators to set up and control Connect.

The launch of Connect comes on the heels of TechCrunch reporting that Cisco had made an offer to acquire Skype before the company completes its IPO. The tech blog speculated the price tag could run as high as $5 billion.

In the Risk Factors section of its S-1 filing, Skype admitted that cracking the corporate phone business may not be so easy with Internet competitors including Google and Microsoft as well as large telecom companies and VoIP providers. It also acknowledged that concerns about the security of Skype's underlying peer-to-peer technology could hamper expansion into the enterprise market.

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