Peter Griffin: Skype rattling the cage of traditional telecoms

I held the man's business card, studying it closely. There was something unusual about it. It wasn't the lavish felt back to the card or the embossed, crossed tennis rackets that acted as his company's logo that seemed strange.

It was the letters and numbers printed between his landline number and that of his mobile phone. The guy had printed his Skype username on his business card.

Skype, for those of you who have yet to join the revolution, is a free computer-to-computer telephone service that is beginning to scare the hell out of the old-school telecoms operators who rely on fat monthly phone rental and toll call profits to prop up their dying monopolies.

It's one of those great levelling technologies, like the Google search engine, that puts something powerful and free into the hands of the masses.

And Skype's not just for geeks. My dad uses it daily. My uncle in Ireland can't live without it. I don't know what an international toll bill looks like any more. I recently had Skype trawl the couple of hundred contacts in my Outlook Express email address book and was amazed that 60 acquaintances came back as being Skype members.

Now my laptop makes a ringing sound at all hours of the night and day as various Skype contacts in different time zones see my perpetual online status and try to get through to me.

The Skype software is quick, easy and free to download. I have a 256 kilobit a second entry-level broadband connection and Skype runs like a dream over it. I use a $30 headset to talk into and can even plug in my web camera to set up a one- or two-way video link with the caller. I can set up a five-way conference call and the Skype software lets me know who is calling and what calls I've missed.

No wonder the guy from New York with the felt business card is on Skype. It is in many ways a business-grade product.

And here's why. In the world of Skype, your voice is turned into ones and zeros and fed across the internet, treated just like any other data traffic. It doesn't travel across dedicated circuits as it does when you use the regular telephone network, so it is therefore susceptible to the quirks of internet architecture.

But compression technology used by Skype and the growing use of broadband internet connections among its users have combined to boost its quality.

The traditional telecoms model can't work with Skype because the Telecoms and Telstras of this world carry your voice call as plain old internet traffic. They charge you for your internet connection but the meter is well and truly off when it comes to the length of calls.

That in itself is pretty amazing but Skype has already gone much further. If you buy Skype pre-paid credit you can make calls to regular telephones for rates that are in line with most of the cut-price toll call operators. You can also buy a voice mail service.

Last week I did something especially interesting with Skype. I put the software on my mobile phone, which runs on Microsoft's Pocket PC operating system. I wasn't expecting much and it took a while to set up, but my maiden Skype mobile call went through perfectly. The Skype client has been shrunk down to fit on your phone but all the same functions are there. I had a conversation with a friend in London on my mobile phone without making a mobile phone call.

Instead, I used the internet connection on my phone. You'll need to be on at least a mid-sized monthly data plan (50 megabyte allowance) to make this affordable and you should always turn off the Skype client and your data connection when you're not using them.

If you feel you're out of your depth on any of this, surf to the website Skype Tips, which covers just about everything you can do with Skype. Not everyone has a phone with Microsoft software on it but the signs are good that mobile network operators, resigned to the inevitable, are going to accommodate Skype.

Third-generation mobile operator Hutchison, which co-owns the 3 network in Australia with Telecom, is trialling Skype over its network.

Hutchison's Swedish arm is also offering a flat-rate data service, mobile data card and Skype bundle for laptop users wanting to make calls on the move. Hutchison is now trying to persuade phone makers to include the Skype software on their handsets.

The future of broadband and mobile is all-you-can-eat data packages designed to support services such as Skype. The sooner our telco operators realise that and kiss their data caps and metered calls goodbye, the better.