U.K. mobile phone operator Hutchison 3G UK on Monday rolled out the Skypephone,
a handset designed to simplify use of the Skype VOIP (voice over Internet Protocol)
application.

Hutchison 3G, branded as "3" in the U.K., is offering free calls
between Skype users through the 3G mobile phone, which goes on sale Friday in
the U.K. The Skypephone will be released by the end of the year in Australia,
Denmark, Hong Kong, Italy, Ireland, Macau and Sweden.

Some mobile phones already support Skype, but volume-based data usage charges
typically make the service expensive to use. Skype recommends using its mobile
application with unlimited 3G data plans or Wi-Fi.

Hutchison 3 has been offering unlimited Skype calls on its pricier X-Series
phones, but the Skypephone is simpler and aimed at the mass market, according
to a company spokesman. The phone has a large button with Skype's logo that's
used to launch calls and IMs.

Hutchison 3 is not charging for the cost of Skype calls on its network, although
it does limit the service to about 4,000 minutes per month. Hutchison 3 will
then suspend outgoing Skype calls but allow incoming ones.

If a user is outside of Hutchison 3's network, roaming charges apply, which
can be pricey despite a rate drop from operators after warnings from the European
Commission earlier this year. The Skypephone is dual-band and won't work in
the U.S.

Hutchison 3's Skypephone allows free calls between registered Skype users,
but the SkypeOut service that allows PC users to call regular telephone numbers
using Skype is not available. Those must be dialed as regular calls charged
for by Hutchison 3.

The candy-bar style handset, which comes in white and black, was developed
by Hutchison 3 and Qualcomm. It has a 2-megapixel camera, MPHutchison 3 player,
Bluetooth connectivity, 16M bytes of internal memory that can be expanded to
1G byte with a Micro SD memory card.

In the U.K., the handset costs £49.99 (US$102) for customers who prepay
their service. The phone is free for those on a contract with Hutchison 3, which
start around £12 per month.

Skype, which is owned by eBay, and Hutchison 3, agreed in 2006 to work on a
mobile VOIP phone. Hutchison 3 is the smallest U.K. operator and has shown less
aversion to shaking up the market, particularly with VOIP, which threatens operators'
revenue, wrote John Delaney, principal analyst at Ovum.

"The bigger operators, such as Vodafone, T-Mobile and Orange, have all
taken flak recently for alleged hostility towards customers using VOIP on their
networks," Delaney wrote. "Now here comes Hutchison 3, not only encouraging
its customers to use VOIP, but bending over backwards to make it easy for them."

IDG News Service

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