Hutchison 3 to release Skypephone in 8 countries

3G mobile phone lets Skype users call each other for free, as well as send instant messages.

U.K. mobile phone operator Hutchison 3G UK rolled out the Skypephone this week, a handset designed to simplify use of the Skype VOIP (voice over Internet Protocol) application.

Hutchison 3G, branded as "3" in the U.K., is offering free calls between Skype users through the 3G mobile phone, which goes on sale Friday in the U.K. The Skypephone will be released by the end of the year in Australia, Denmark, Hong Kong, Italy, Ireland, Macau and Sweden.

Some mobile phones already support Skype, but volume-based data usage charges typically make the service expensive to use. Skype recommends using its mobile application with unlimited 3G data plans or Wi-Fi.

Hutchison 3 has been offering unlimited Skype calls on its pricier X-Series phones, but the Skypephone is simpler and aimed at the mass market, according to a company spokesman. The phone has a large button with Skype's logo that's used to launch calls and IMs.

Hutchison 3 is not charging for the cost of Skype calls on its network, although it does limit the service to about 4,000 minutes per month. Hutchison 3 will then suspend outgoing Skype calls but allow incoming ones.

If a user is outside of Hutchison 3's network, roaming charges apply, which can be pricey despite a rate drop from operators after warnings from the European Commission earlier this year. The Skypephone is dual-band and won't work in the U.S.

Hutchison 3's Skypephone allows free calls between registered Skype users, but the SkypeOut service that allows PC users to call regular telephone numbers using Skype is not available. Those must be dialed as regular calls charged for by Hutchison 3.

The candy-bar style handset, which comes in white and black, was developed by Hutchison 3 and Qualcomm. It has a 2-megapixel camera, MPHuchison 3 player, Bluetooth connectivity, 16M bytes of internal memory that can be expanded to 1G byte with a Micro SD memory card.

The handset costs US$102 for customers who prepay their service. The phone is free for those on a contract with Huchison 3.

Skype, which is owned by eBay, and Hutchison 3, agreed in 2006 to work on a mobile VOIP phone. Hutchison 3 is the smallest U.K. operator and has shown less aversion to shaking up the market, particularly with VOIP, which threatens operators' revenue, wrote John Delaney, principal analyst at Ovum.

"The bigger operators, such as Vodafone, T-Mobile and Orange, have all taken flak recently for alleged hostility towards customers using VOIP on their networks," Delaney wrote. "Now here comes Hutchison 3, not only encouraging its customers to use VOIP, but bending over backwards to make it easy for them."

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