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Skype coming to Verizon Wireless phones?

Verizon Wireless and Skype are making a big announcement at Mobile World Congress in Barcelona next week.

BARCELONA, Spain--Verizon Wireless could soon be adding Skype software to some of its phones, according to reports.

Verizon, the largest wireless company in the U.S., announced Friday that it is scheduling a press conference with Skype on Tuesday at the Mobile World Congress trade show and conference here.

Verizon isn't commenting publicly on the announcement, but Bloomberg is citing unnamed sources who say the company is planning to include Skype's Internet calling software directly in some of its phones.

The service would let customers make Skype calls over Verizon's 3G data network.

For years, telecom giants have feared that voice over IP (VoIP) services, such a Skype, would kill their traditional and lucrative voice businesses. As the price of voice services steadily declines, operators are instead looking toward data services to boost revenue. And applications, such as Skype, could help them sell more data packages and get subscribers to use the data services more often.

Verizon and AT&T have each lowered their unlimited voice plans to $70 a month from $100 a month. Meanwhile, these companies have also tweaked their data services plans to force more customers to subscribe to data services. Initially, the companies only required data services for their smartphones. Now they are starting to require customers with quick-messaging devices to add on data plans, too.

Skype has become popular throughout the world as a way to make cheap international calls using a flat-rate broadband service from home. It's unclear whether the application would offer a similar value to wireless customers.

Because voice minutes are already bundled into cheap packages in the U.S., subscribers who are only calling domestically would likely not save any money using Skype to make phone calls. But subscribers could save money if they use Skype from the U.S. to call people in other countries--so long as they have an unlimited data package.

Some wireless data plans are unlimited in a similar way that home broadband service is unlimited. But in wireless, Verizon also offers plans with only a certain amount of data. When subscribers exceed their monthly allotted data, they are charged by the megabyte. This means that if such wireless subscribers use Skype, they eat up their monthly allotted data service. And if they go over their limit, they pay more.

Skype can also be used to make low-cost calls while traveling abroad. But consumers must be careful. Making voice calls while roaming on a foreign carrier's network is expensive. But using a data service is even more expensive, especially without a special data roaming package. This means that using VoIP to make phone calls while roaming on a foreign carrier's network may not be cheaper than simply calling from a cell phone.

If the Skype-enabled handset has Wi-Fi built-in, subscribers could use the Skype application to make calls from a Wi-Fi hot spot, using the Wi-Fi for the data connection instead of the 3G network.

Even though consumers have to be careful how they use Skype on a mobile phone to get the best value, the service is likely to be popular. A wireless company called 3, which is owned by Hong Kong's Hutchison Whampoa, has been selling phones with preloaded Skype software since 2007. And it credits the Skypephone with attracting hundreds of thousands of new subscribers.

Verizon isn't the only U.S. operator looking to include Skype on its phone lineup. AT&T announced in October that it is opening the popular Apple iPhone to VoIP services, and Skype is expected to launch a new application for the iPhone in the next month or so.

Stay tuned for more about this announcement. Verizon and Skype will provide details about their partnership at a press conference here Tuesday.

Mobile World Congress is one of the biggest annual trade show and conferences in the world for the mobile phone industry.