INTERVIEW-Skype CEO says focus on mobile, corporate

* New owners focus on growth

* Mobile carriers attitude starting to change

* Says very pleased with $600 mln loan deal

(Adds details, quotes on mobile)

By Tarmo Virki, European technology correspondent

TALLINN, Oct 13 (Reuters) - Internet telephone company Skype will focus on expanding its mobile and corporate business next year while further developing its key offerings to consumers, its chief executive said on Tuesday.

A coming change in ownership will boost the focus on growth, CEO Josh Silverman said in an interview with Reuters.

Last month a group led by top Internet financiers in Silicon Valley and Europe agreed buy a 65 percent stake in Skype from eBay EBAY.O for $1.9 billion. Closure of the deal is pending.

“I’m very excited about the new ownership. They are very focused on growth,” Silverman said at the company’s core R&D centre in Estonia.

The group buying Skype includes London-based Index Ventures and the Canada Pension Plan Investment Board, along with Silver Lake and Andreessen Horowitz.

More than 19 million users sign on every day to Skype for Web-based chats, phone conversations or video phone calls. Skype has registered nearly 500 million users worldwide since it was founded in 2002.

Calls to other Skype users are free, but the company charges for calls to traditional phone numbers and other additional features.

Revenues were $551 million last year, and the company aims to hit $1 billion within two years.

Silverman said the recession has not hurt Skype’s business, which has been profitable for more than two years.

“In tough economic times there is flight to value. And we are value,” he said. “We are seeing a huge pull from enterprises, from large and small.”

Silverman said one-third of users already use Skype wholly or partly for business, but the company is focusing increasingly on tailoring products for companies.


Mobile carriers are slowly starting to allow Skype on their phones as they have feared of losing revenue if clients were to make calls over the Web instead of on their regular service.

Silverman said a decision by AT&T T.N last week to allow Skype to use its cellular network was very important.

“It’s a critical principle. Your ISP (internet services provider) don’t get to be a gatekeeper. It’s critical not only for Skype but also for human rights,” he said.

“Just imagine electricity companies deciding to get into consumer electronics business -- saying your appliances don’t work if you don’t buy them from us.”

Silverman said consumers’ strong interest in using Skype on their phones has started to change thinking among carriers. “Applications like Skype drive demand for data plans.”

Wireless operator 3 UK, owned by Hutchison Whampoa Ltd 0013.HK, has reported a strong adoption for its mobile Skype service -- it has lifted average revenue per user and cut customer losses.

Last month 3 UK started to sell SIM cards for 2.99 pounds

($4.75) that allow users to make free calls, without any limits, using Skype.

“You could pay 2.99 and never pay another phone bill,” Silverman said.

This could be seen as the biggest risk by many mobile operators, but the international calling industry has actually won from Skype, Silverman said.

“We’re substantially grown the market. The cost per minute is going down and usage is exploding,” he said.

Last week Skype agreed a $600 million five-year loan, but sources told Reuters Loan Pricing Corp the price had been flexed up due to investor scepticism, including that the deal does not offer too much in terms of a recovery given that it is secured by assets that comprise software.[nRLP41186a]

“I am very pleased with the result. I think it’s a testament to strength of our business model,” said Silverman.

(Editing by John Stonestreet and Steve Orlofsky)

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