Will Skype phones reduce mobile bills?

commentary With dedicated Skype phones and hybrid handsets that couple Wi-Fi with mobile phone networks, there is potential for saving money on local and international calls. But are we like to see more pennies in our pockets any time soon?

While we haven't seen any handsets yet that can switch seamlessly between mobile and voice over IP (VoIP) calls, we have seen a trickle of high-end handsets that incorporate both Wi-Fi and mobile phone technology. So far, these have been high-end smartphones such as the i-mate JAMin, O2 Xda Atom Exec, HP iPAQ rw6828 and the Nokia E60, most of which are aimed at business users.

With over 100 million registered users, proprietary VoIP application Skype is available for download to Pocket PC devices, but a Symbian version for Nokia smartphones is yet to be released.

Aside from the high cost of such handsets, mobile phone operators aren't exactly welcoming phones that can bypass their voice networks to make calls. We've yet to hear of any carriers offering Skype bundled services or subscription rates, but following on from eBay-owned Skype's partnership with Hutchison, it is likely that 3 mobile will be the first to officially launch Skype on its network locally.

In the meantime, Netgear is expected to release its SPH101 Wi-Fi Phone next month, which has Skype software pre-loaded but no mobile network connectivity.

The Netgear device begs the question: does anyone want to carry around two phones -- one for Skype and one for mobile calls? With limited connectivity options, the SPH101 is subject to the range of Wi-Fi networks (around 30-50m from a wireless access point). And although public Wi-Fi hotspots are being introduced in metropolitan areas overseas, free Wi-Fi availability in Australia is generally limited to airports and open business and home networks.

While the Netgear Skype phone supports WEP and WPA secured networks -- good luck typing a 128bit key on a phone keypad -- another question is how the SPH101 is expected to connect to Wi-Fi hotspots that require Web-based login or authentication, as it doesn't have a Web browser.

Skype has a lot going for it, but like any proprietary network, your friends, family and business contacts must also be connected to keep in touch. In an effort to increase its user base in North America, Skype is offering free SkypeOut calls to all landlines and mobiles within the US and Canada until 2007. Unfortunately the promotion isn't running Down Under.

Whatever the case, it's going to be a while until we see Skype reducing mobile bills. Many more hybrid handsets need to hit the market before they will become affordable, and carriers will have to come up with appealing VoIP business models before they will promote such handsets.

What do you think the future holds for VoIP and mobile phones? Are you using Skype already? Send an e-mail to cnet@cnet.com.au and let us know your experiences. Alternatively, call CNET.com.au on Skype and leave us a message -- you'll need to download Skype first.