Skype: Interference on the line?

With customer complaints mounting, CEO Niklas Zennström wants to make sure Skype doesn't become a victim of its own success.

Skype CEO Niklas Zennström vowed to shake up the phone industry 20 months ago with his creation, the first ever peer-to-peer Internet phone service.

More than 110 million downloads and 2 billion minutes of phone conversations later, Zennström has shown that he wasn't kidding. But Skype's success has led to perhaps the most difficult chapter yet for the Luxemburg-based company. It now faces mounting concerns over a lack of customer service and a growing backlash by utility regulators as it hunts for new revenue opportunities. Zennström spoke to about these and other issues earlier this week.

Q: There are a lot of customer complaints about SkypeIn, where you get inbound calls from any phone, and SkypeOut, which is used to call any phone. Is there a problem with it?
Zennström: One thing you have to bear in mind is that the telephone system has been around for 135 years; Skype's been around for 20 months. We are going through all kinds of improvements.

But clearly something is wrong. Customers are fuming about dropped or badly distorted calls. Any changes in the offing?
Zennström: There actually are people using SkypeIn that say it's better than SkypeOut. We are using a new software version for SkypeIn, which we will be gradually introducing into SkypeOut. We are continuously working on it.

One thing you have to bear in mind is that the telephone system has been around for 135 years; Skype's been around for 20 months.

Is that going to solve the problem?
Zennström: We're also adding more carrier partners in order to terminate more calls to traditional phones. That will help. We are also developing lots of new ways to correct errors in the traffic. I think we will continue to see improvements in quality.

These are quality of service problems Skype can address. But Skype can't control the quality of someone's broadband connection, which has a direct impact on Skype calls.
Zennström: We've identified a list of things we can do. But in cases where people are on a badly congested Internet network, that will have an impact on quality. But you're starting to see multi-megabit, per-second connections. In many places, Sweden for example, you can buy a 24mbps line here, and you'll start seeing that in a lot more places.

Your proprietary software has come under fire from those Net phone interests advocating open-source Session Initiation Protocol. What's Skype's SIP stance now?
Zennström: We've been using SIP to interconnect SkypeIn and SkypeOut calls to the (traditional) public switched telephone network (PSTN) since July. Second to Yahoo Broadband in Japan, we're probably one of largest SIP traffic generators. But doing

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