One part computer plus one part technology equals cheap phone calls

Citation

(2007), "One part computer plus one part technology equals cheap phone calls", Journal of Consumer Marketing, Vol. 24 No. 5. https://doi.org/10.1108/jcm.2007.07724eab.001

One part computer plus one part technology equals cheap phone calls

A few years ago, one of my friends complained about the size of his company’s and his family’s long distance bills. He had three children of university age; each of whom was in a distant city. His company had an active sales force covering accounts across the nation. Despite the significant reductions in long distance service charges since the US broke up the Ma Bell monopoly and long distance competition bloomed, many consumers face large long distance telephone bills. He searched for a better, translated as cheaper, way to call long distance and internationally. There seemed to be promise in a technology called voice over internet protocol (VOIP). Some of the early attempts at exploiting VOIP were noticeably substandard.

However, my friend found Skype (pronounced Sk-eye-p) and spread the word. Soon most of our circle of communicators found themselves at their computers with headsets and microphones “calling” each other using Skype. When someone visited Peru for a six month sabbatical, he was not out of touch. In fact, a Skype “call” to his computer was free. Like the Instant Messenger products, we were able to see who on our list of friends was online and we were able to contact them easily.

Since that time, the environment has changed. Admittedly, the level of competition has risen to the point that television cable providers are now in the telephone game adding another layer of competition. That competition puts further downward pressure on telephone rates. Still, Skype has some interesting advantages.

Really what is Skype?

Skype promotes its software as an amazing product that lets users make free calls to anyone else on Skype, anywhere in the world. One might expect that something that is free will suffer from quality problems. However, Skype computer to computer phone calls are of excellent quality. One new feature is Skype’s webcam ready setup. Webcams are cameras attached to the computer that integrate with internet browsers and are increasingly common and increasingly inexpensive. If both caller and receiver have webcam setups, they can make free video calls.

What happens if you want to call a real telephone? Now Skype allows calls to both landlines and mobile phones. Those calls are not free but have very inexpensive per minute rates. Compared to the “deals” in telecommunications that require contracts and fees, Skype requires no setup or subscription fee.

The product combines elements of telephony and the instant messenger programs that are now very common. One can do more than just calling. There is a chat provision reminiscent of instant messengers. Skype allows one to chat with up to 100 people in a group chat. If it is a really nice group chat, you can bookmark it and find it later, which is handy for persistent chats with family or business contacts.

Managing contacts

One can find and add contacts to a contact list easily. Importing contacts lets you find people among your contacts who are already on Skype. With people on the contact list, you can see if they are online, offline, busy or not sitting at their computer right now. Skype allows you to avoid tedious creation of contacts, that repetitious data entry stage by allowing importation of contacts from other applications. For example, contacts that are not using Skype yet do not appear in your Skype contact list. However, you can access your Microsoft Outlook® contacts directly from Skype. That adds immeasurably to the convenience. Every contact has a name which can be real or a nickname so there is little confusion about who is and who is not online.

Skype has a shared groups feature that helps organize contacts. If your contact list is full of friends and family, you can organize them by creating and managing groups of contacts. Furthermore, using shared groups, all your friends or your latest project group can stay in touch and be automatically updated when a new person joins the group.

Security

Skype automatically encrypts calls, chats and file transfers before sending it through the Internet so no one can intercept your call, text or file transfer. And it is completely free of advertising, so you will not be disturbed by annoying pop-ups or banners. As an additional feature, Skype notes that it is free of Adware, Spyware and Malware. The staff at Skype pride themselves in offering a product that always protects and maintains the online security of users. They pledge not to display unwanted and intrusive advertising, or allow any malware or spyware to operate.

These promises are ambitious. Adware has the primary commercial purpose of automatically delivering advertising messages to a user without informing the user and is often hard to turn off. Because you always have the ability to turn advertising messages off on the Skype software, we believe Skype is free of adware. In contrast, spyware becomes installed on a computer without the informed consent or knowledge of the computer’s owner and covertly transmits or receives data to or from a remote host. For example, spyware may monitor a user’s behavior and pass on details of a user’s activity (for example their user names or passwords) to a third-party. Finally malware (or malicious software) is designed to infiltrate or damage a computer operating system or other programs, without the owner’s consent. These are often described as computer viruses, worms, or Trojan horses. The technical staff exerts a great deal of effort in stopping these threats so that users can enjoy peace of mind.

Free features

You can talk to anyone on Skype over the internet for free, and the company promises that you will always be able to do so. There are some other useful things you can do on Skype that are not free. Basically, the free services include:

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  calling other people on Skype;

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  free video calls on Skype free;

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  one-to-one and group chats;

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  free conference calls with up to nine people; and

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  free forwarding calls to other Skype names.

This cluster of services attracted a great deal of attention and a number of users. After building a critical mass of users, the company expanded the features to include useful items that do require a cost but represent a significant value.

The Skype website lists four major feature groupings: SkypeOut, SkypeIn, Skype Voicemail, and Skype SMS. SkypeOut, is billed as a cheap way to call from Skype to landlines and mobile phones, basically for outgoing phone calls. You can also use SkypeOut to forward calls to your Skype account to your home number or mobile phone. The company offers a bundle of services: Skype Unlimited. Skype Unlimited provides:

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  12 months of unlimited calls to any phone within the US and Canada;

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  no connection fees charged for calls to US or Canadian phones;

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  only US$29.95 per year;

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  available to residents of the US and Canada only;

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  per minute calling – 2.1¢ per minute to over 30 global destinations – rates based on destination country; and

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  connection fee of US$0.039 (excluding VAT) charged for each call.

To avoid the problem of prepay cell phone cards that require purchasing new cards (in $5, $10 or larger increments) when the old balance is used up, Skype provides a credit system called, Skype Credit. It allows users to pay per-minute. The credits are deducted as you make outgoing SkypeOut.

The second product, SkypeIn, is an inbound telephone number people can used from any phone to a user’s Skype account. When the call comes in, the user clicks on an icon on the Skype program and the call is “answered.” You can get numbers in one or more of the places offered, and receive calls in Skype from anywhere in the world. In essence, SkypeIn, provides a distinct regular phone number. So if someone who is not using Skype wants to call you by dialing a regular number, you can still receive the call in Skype. No matter where you are. Since the location is critical for billing – and saving money, having SkypeIn numbers in several locations is important. For example, if you have a Chicago-based SkypeIn number, but you are living somewhere in the suburbs of Paris, your Chicago area friends can just dial your SkypeIn number, and your Skype on the other side of the world starts ringing … and your friends are only paying whatever their phone company charges them for making a phone call to Chicago. Obviously, making such a telephone call from Buenos Aires will be more costly. If the SkypeIn number is in the US and someone calls from another country, that caller pays for the international nature of the call. But users can get up to ten SkypeIn numbers in different places and minimize international calls to provide the caller with a local call. SkypeIn makes it much easier and less expensive for callers who are not necessarily connected to the Internet to call you and share that urgent news.

To make it even better, SkypeIn comes with a free Skype voicemail subscription, so when a non-tech savvy aunt wants to call but you are busy or offline, she can leave you a voicemail message that can be answered later. Currently, the system is being tested but can provide up to ten SkypeIn numbers in total from the US, UK, Brazil, Denmark, Estonia, Finland, France, Germany, Hong Kong, Poland, Sweden and Switzerland. More locations are being added.

SkypeIn numbers are sold on a subscription basis: a 12 month subscription is €30 and three months is €10. The package includes:

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  free Skype voicemail with a SkypeIn number;

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  if you buy a SkypeIn number, you get a free Skype voicemail subscription along with it; and

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  Skype voicemail takes your calls when you are busy or offline.

Skype voicemail

For a small fee (€5 for three months or €15 for the year) the Skype voicemail feature allows sending voicemail messages to anyone on Skype. It is like sending a chat but with the sound on. You can record messages and send them to your friends without disturbing them. You can pick up messages when you are away or busy on another call and you can keep the messages for as long as you like. In fact, you do not have to be online at all for someone to leave a message. People will be able to contact you when you are not otherwise available. We should emphasize that Skype Voicemail is free with a SkypeIn number.

The last part of the bundle is Skype SMS. Skype SMS lets you send SMS messages to your friends’ mobile phones from Skype. It is a quick and cheap way to get in touch with friends instantly when they are not online, unavailable or simply on the move. It offers a benefit over text messages sent over cell phones: it is easier to type long text from the comfort of your keyboard.

System requirements:

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  PC running Windows 2000 or XP (Windows 2000 users require DirectX 9.0 for video calls).

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  Internet connection (broadband is best, GPRS is not supported for voice calls, and results may vary on a satellite connection).

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  Speakers and microphone – built-in or separate.

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  To make video calls you will need a computer with at least a 1 GHz processor, 256 MB RAM and of course a webcam.

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  We also recommend that you have at least a 400 MHz processor, 128 MB RAM and 15 MB free disk space on your hard drive.

Overall evaluation

Skype has saved me considerable money over the years. Now that I travel internationally more than I did in the past, SkypeIn and SkypeOut are becoming indispensable. Contacts can call me easily wherever I am and I can call friends and clients for free using our computers or for a small fee per minute calling from my computer to a telephone.

Overall, it is a program that offers a great deal of convenience and cost savings, without a drop in quality.

Edited by Dennis A. Pitta University of Baltimore