With Voice Calling, Facebook's Skype Partnership Will Offer Alternatives to Traditional Carrier Plans

Facebook's Skype integration is set to include outbound calls to landlines and mobile phones along with group video chat, Skype's Vice President Neil Stevens said. Forbes reports that the features will be implemented once the initial one-on-one video chat between Facebook users is rolled out completely -- a month after launch it's still only available to 1% the global user base. The planned features may reduce the need for users to run Skype's dedicated desktop app, though some may still cost users Skype Credit to access. Stevens also said a Skype/Facebook mobile calling app will become available. This could come as a feature in Facebook's new standalone mobile group chat app Messenger, which was released yesterday and that 9to5Mac discovered includes hidden code and images indicating eventual support for video calling. The logos are even similar, as shown in my mashup below. The addition of these features could help Facebook join smartphone OS developers in encroaching on traditional mobile carrier revenue streams such as SMS and voice calling plans. A Skype-enhanced Facebook Messenger could also pull engagement away from the native communication apps of handset makers including Apple. Both of these scenarios would require Facebook's app to have a frictionless design and massive traction in order to challenge the straightforward voice, SMS, and messaging apps shipped with today's smartphones. Facebook and Skype worked together in the past to integrate features such as the news feed and phonebook into the Skype desktop app. Then in July the two announced a deep, long-term partnership and launched intra-Facebook video calling. The simple, light-weight, in-browser extension of Facebook Chat used an automatically downloaded plugin to process calls so users wouldn't have to launch a separate desktop app. Skype's voice-over-internet-protocol technology allows for cheaper voice calling than landline and mobile phone carriers offer, and video calling that can be more fun and intimate than voice calls. When combined into Facebook Messenger, which lets users communicate in real-time over push notifications, Facebook Chat, and Facebook Messages rather than sending overpriced SMS, Facebook will have an app capable of largely replacing a user's expensive landline, mobile voice, and SMS plans. The partnership could create a significant revenue stream for Facebook as well. Facebook would likely get a revenue share of what its users spend on Skype Credit to make outbound calls or conduct group video conferences. This could come as direct cut from Skype, or Facebook could require users to buy Skype Credit with Facebook Credits on which the social network levies a 30% tax. Competing with Apple Apple's recently announced iMessage push-messaging service and FaceTime mobile and web video calling app could be bested by the Skype-enhanced Facebook Messenger. This is because they clumsily requires users to know the Apple email address of those they're trying to reach, or both be on iPhones, as TechCrunch's MG Siegler points out. Facebook Messenger only requires users to be Facebook friends or know each other's phone number, and already runs on both iOS and Android. Facebook's internally developed Twilio-style API-to-SMS system could be used to alert those without the app that someone is trying to video call them and that they should download Messenger. Better functionality won't help if the labor of downloading Facebook Messenger prevents it achieving the traction necessary to challenge native handset communication apps. Facebook does have a massive potential audience, but would likely have to heavily cross-promote the app across its interfaces in a way that could annoy users to even approach this level of traction. Accelerating Shift of Carriers to Data Revenue The more users on Skype and push-based mobile messaging platforms, the less revenue mobile carriers can make on voice and SMS plans. The carriers are already preparing for the shift towards data plan-based business models, but voice and SMS will remain major revenue streams for the next few years. Facebook's Skype partnership and Messenger could accelerate the shift. Before, Skype and push messaging were more the domain of technology professionals and early adopters, but Facebook has the potential to bring them more mainstream. Those looking to cheaply make international calls to their grand parents, and teens with limited funds seeking to stay in constant contact with their friends might use Facebook's app rather than voice and SMS. Realistically, without a its own smartphone or mobile OS, Facebook can probably only offer a pale version of what it really wants to. Without being shipped with phones, a Skype-powered Facebook Messenger may only gain enough traction to take some engagement and revenue from mobile handset makers, OS developers, and carriers. Still, these were spaces Facebook wasn't in a month ago, so its progress and potential are still quite disruptive.

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With Voice Calling, Facebook's Skype Partnership Will Offer Alternatives to Traditional Carrier Plans

Josh Constine

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