Microsoft/Skype Deal Could Hurt Carriers

With apps such as Viber and Skype providing free calls that either run on 3G or WiFi it’s got to eat into carrier networks such as AT&T, Sprint, Verizon and T-Mobile’s profits since those calls that are made are considered to be free. With Microsoft’s recent acquisition of Skype it looks like it doesn’t bode very well for carriers and might potentially cause some issues with Microsoft’s partnership with some of these carriers.

Yesterday we took a look at how the Microsoft/Skype deal could affect the success of Windows Phone 7 operating system and devices and today we will take a look at how this deal could affect carriers.

As mentioned yesterday it seemed like the obvious route to take that Microsoft would integrate Skype into its Windows Phone 7 operating system that allows its users to make free voice and video calls to each other and even allow the purchase of Skype credit to make calls to mobile phones or landlines local and overseas.

Naturally being a network carrier it would seem that their primary source of income comes from voice calls and Craig Moffett who is an analyst at Sanford C. Bernstein is quoted as saying “It’s certainly a threat.” He also went on to say that “Wireless operators make the vast majority of their profits from low-bandwidth services like voice and text, but those services are easily arbitraged by doing them over the data network, where the price per megabyte is a tiny fraction.”

The next question is if the Skype integration with Microsoft’s Windows Phone 7 operating system is what’s going to give them a unique edge in the smartphone market, which carrier would choose to represent their phones then, especially if Microsoft will be providing an alternative, and free, means of making voice and video calls?