Start-Up Slashes Cost of International wireless

Cambridge firm uses Skype technology to make cellphone calls By Peter J. Howe, Globe Staff | August 1, 2005

CAMBRIDGE -- In just one year, computer users around the world have downloaded 140 million copies of the Skype program that lets them make free phone calls over the Internet to other Skype users.

Now a Kendall Square start-up is pushing Skype into a new frontier: cellphones. Through a $10-a-year software rental that goes on sale today, iSkoot promises to let people make international calls to other Skype users for nothing more than the price of local air time for the link from their cellphones to their broadband-connected home computers.

Just as Internet phone technology has slashed the price of making conventional landline long-distance calls and enabled unlimited calling for as little as $20 a month, the iSkoot technology could put pressure on still-exorbitant wireless international calling charges.

Cingular Wireless and Verizon Wireless, the two biggest US carriers, charge $1.49 a minute for calls to Europe and India, and rates as high as $3 for less common destinations like Madagascar. Subscribers willing to pay a $4 monthly fee can get lower rates, such as 19 or 20 cents a minute to most of Europe and 30 or 35 cents to India. But Verizon warns it can require a $500 security deposit for international long-distance subscribers.

Market data suggest a big market for international cellphone calls. According to a survey by Telegeography, a market analysis and research firm in San Diego, 20 percent of all international calls originated on cellphones in 2003, the most recent year surveyed. In the United States and Canada, the figure was 5 percent.

The iSkoot founder, Jacob Guedalia, said his vision was to 'enable the individual to become his own long-distance carrier' by routing calls over a home or office computer connection, instead of AT&T or Sprint. Thanks to moves by Skype to make its software code available to other technology developers to build new services and products that run over Skype, Guedalia said, "We can take the voice-over-Internet revolution, which until now has really been confined to the personal computer, and bring it to the mobile world."

Executives at top wireless carriers, who could lose millions of dollars in international calling revenue, are taking a wait-and-see attitude. Although carriers like Verizon and Cingular maintain wide latitude to terminate customers they deem to be misusing their service by doing things like making excessive free night and weekend calls, functionally iSkoot resembles using a calling card or company conference bridge for an international cellphone call, which normally carriers don't block.

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Monty Solomon
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