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Skype makes mobile push at CES

LAS VEGAS (Reuters) - Skype, which has helped legions of consumers lower their long-distance phone bills with computer-based calling, is making a big push into the mobile sector, announcing support for Google Inc’s Android on Thursday.

A model demonstrates an IPEVO Free.2 Skype internet phone during a news conference in Taipei January 17, 2007. REUTERS/Richard Chung

As cash-strapped consumers and businesses look for ways to cut costs in a weak economy, Skype is expanding its software for making cheap calls to more than 100 cell phone models, including phones running the Android mobile operating system.

Most mobile carriers have yet to allow Skype, a unit of eBay Inc, on their phones for fear of losing revenue if subscribers were to make calls over the Web instead of on their regular voice service.

However, that is changing as the popularity of Skype has grown, Chief Operating Officer Scott Durchslag said. Wireless operator 3 UK, owned by Hutchison Whampoa Ltd, has reported a strong adoption for its mobile Skype service.

“The operators thought in the past we were something just shy of Satan,” Durchslag told Reuters in an interview at the Consumer Electronics Show in Las Vegas. “Now we have carriers coming to us.”

The company, which had 370 million registered users at the end of the third quarter, said its Skype Lite software would also support phones using Java software and devices running on Microsoft Corp’s Windows Mobile operating system.

While Skype promises to give customers cheap mobile calls to overseas contacts and domestic landline phones, users will need to pay their service provider for local air time as well as their Internet service charges for mobile Skype calls.

Durchslag said the weak economy was helping rather than hurting Skype, as consumers look for cheaper options. Even business customers who have been slower to adopt Skype are now seeing it as a way to cut costs.

“We’ve never seen things better,” Durchslag said, adding that businesses now represent about 30 percent of Skype’s minutes used, compared with 20 percent earlier in 2008.

“We’re getting calls from businesses that never would have called us before,” he said, citing as an example the head of a large team at network equipment maker Cisco Systems Inc whose group used Skype to communicate.

Durchslag said that, while other companies were laying off workers, Skype, which is adding more than 30 million users a quarter, is hiring aggressively to keep up with its rapid growth.

With an aim to move beyond the desktop computer and the cell phone, Durchslag also said he had begun working with television manufacturers on having Skype in Internet-connected digital TVs as early as a year’s time.

“TVs have a very long development cycle so that’s something you’d probably see more likely into the end of 2009 or the beginning of 2010, if everything goes perfectly,” he said, but declined to name manufacturer partners.

Meanwhile, Skype said its mobile service would be available in 10 countries: the United States, Britain, Poland, Brazil, Sweden, Denmark, Finland, Estonia, Australia and New Zealand.

Its mobile software can be downloaded from the Android software application marketplace for Android phones, including G1, the first model on the market made by HTC Corp and sold by Deutsche Telekom AG’s T-Mobile.

Skype also announced a Beta version of software for mobile Internet devices, a type of scaled-down computer that is light and small enough to be suitable for surfing the Web on the go.

Customers using this version would be able to make free Skype-to-Skype calls to anywhere in the world and lower-cost calls to mobile phones and landlines.

EBay shares closed up 8 cents at $14.67 on Nasdaq.

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