Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Skype just announced that Skype users can now place free SkypeOut calls to traditional landline and mobile phones in the US and Canada. Previously, Skype users were required to pay for calls from their PCs to the PSTN. The offer will run until the end of the year.

Skype has faced increasing competition from numerous other VoIP providers such as Gizmo Project as well as IM providers, such as AIM and Yahoo, who've recently added PC-to-PC and PSTN calling capabilities. By offering free calling to the PSTN, Skype is further differentiating itself from these and more traditional telcos and Internet phone offerings from vendors, such as Verizon, AT&T, Vonage, and Packet8. The move is likely to increase Skype's market penetration within North America.

Numerous questions though remain. Perhaps the biggest is it's not clear how Skkype will fund the PSTN calling. Even if call completion runs a fraction of a cent, Skype can find that it's massive customer base could well run up charges of hundreds of millions of dollars. Will Skype assume those costs itself or differ them through a deal with a PSTN provider?

For additional analysis of the Skype announcement, check out this article.