Friday, September 7, 2012

Skype starts billing other carriers

Remember when Skype was free?  While it's still free for computer-to-computer calls, Skype started instituting fees in 2010 for calls to wired and wireless telephones, group video calling, and other advanced services.  Now a part of Microsoft, Skype is introducing direct operator billing (DOB) as a mechanism for collecting those fees from its users.  Direct Operating Billing refers to systems that simplify the purchase and billing process (charges are billed directly to a user's existing online credit account, rather than requiring the collection of credit card or other payment information for each individual charge).  Microsoft feels that making the billing process easier to navigate will lead to greater use of fee-based services -
“We expect ease of payment to attract new users, while existing users will become more profitable customers as they increase their spend with us,” indicated Neil Ward, GM for business operations in Microsoft’s Skype division.
  I'm not so sure - people chose Skype because of its free services, and the advanced services that Skype charges for are mostly small niche services.  In addition, looking at it from an economic perspective, moving to DOB simplifies billing and somewhat reduces the ancillary cost of using a particular service, suggesting a shift in perceived cost and movement along the existing basic demand curve.  Reducing perceived costs, particularly fairly small indirect costs, may well result in some increase in use - but the overall impact is likely to be minimal. Simplified billing, however, is unlikely to significantly affect the underlying inherent demand for Skype's advanced options (i.e., shifting the whole demand curve). As such, the impact on overall use is likely to be small.

Source  -  Skype intros carrier billingtelecoms.com

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