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Tuesday, May 16, 2006
Skype Launches Free Call Promotion


Skype, the Web telephone company, said on Monday it would allow consumers in the United States and Canada to make free phone calls, a promotional move that marks a new blow to conventional voice calling services.

The offer, which extends through the end of 2006, covers calls from computers or a new category of Internet-connected phones running Skype software making calls to traditional landline or mobile phones within the United States and Canada.

Previously, users of Skype were required to pay for calls from their PCs to traditional telephones in both countries. Calls from North America to phones in other countries will incur charges.

Skype already offers free calling to users worldwide who call from computer to computer.

The company is seeking to accelerate usage in the North American market, where adoption of its voice-over-Internet technology has lagged other regions of the globe.

The offer is likely to put price pressure on rival voice-over-Internet phone service Vonage Holdings Corp., which is expected to go public later this month.

Although Vonage and Skype serve somewhat different markets -- with Vonage acting as a full replacement service for traditional phones over Internet lines, and Skype considered by most as a complement to existing service -- the free offer could siphon customers away from Vonage.

The move puts pressure on rival Internet services such as Microsoft , Yahoo , AOL , Earthlink and Google , which charge small per-minute fees for computer-to-phone services.

Skype, which allows free Web-based calls between members, said the offer to U.S. and Canadian consumers is made feasible by the low cost structure of North American telecom markets relative to other countries, where phone tariffs are higher.


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