Thursday, November 29, 2007

How much does Google pay the operators for the My Location info on Google Maps?

Google has launched a location service for Google Mobile Maps that doesn't rely on the Global Positioning System (GPS). The My Location feature locates users who don't have GPS-enabled phones based on their location to nearby cell towers. The result isn't as accurate as GPS, but it works pretty good in cities. Om Malik got located just half a block away from his real location when he checked out the service yesterday.

I wonder how much Google has to pay for that location info, because it's not free. In Germany the mobile operators charge €0.10 from third parties for every localization, and Google's new service works also here.

The disclaimer on the mobile phone explains pretty good the functionality of My Location for Google Maps:
With the My Location (beta) feature, just press [0] to move the map to your approximate location. [...] Your approximate location will appear as a flashing blue dot. If you have a GPS-enabled device, this blue dot correspondents to your GPS location. At times, and if you don't have GPS on your phone, you may see the dot surrounded by a light blue circle to indicate uncertainty about your location.

Why the uncertainty? The My Location service takes information broadcasted from nearby mobile towers to approximate your current location on the map - it's not GPS, but it comes pretty close. [...]

As part ot the My Location (beta) feature, Google Maps sends anonymous radio information back to Google servers to improve the service. You can disable / enable this and all location features by selecting from the options below.

In Germany we have a company called Qiro which does quite the same, but they are more advanced with their service. I visited them in July 2007. You can locate yourself and your buddies on a map. Qiro shows nearby movie theaters with their current program, ATM machines, Burger King restaurants, train stations, travel agencies and many more things.

Unlike Google Maps, Qiro is already based on localized online advertising. The prices for advertisers are similar to the banner ads on your web browser. This means it's cheap, between €3 and €150 for 1.000 ads. Qiro needs a razor sharp calculation to earn the money back for the localization and still make a margin.

How does Google do it?

Do they get better prices? Or do they just don't care because they are drowning in money? I guess we have to read their next stock report and look for an item called "locator info".

Tuesday, November 27, 2007

Packet8 MobileTalk could be done much better

When Packet8 presented last week their service MobileTalk I was fascinated, but just for some seconds. Then I thought: What a lost opportunity! It could have been such a great application, if it 1.) hadn't such an expensive basic fee, 2.) wasn't bound to one particular VoIP provider and 3.) didn't work only in the US.

The press release explains very well how it works:
Packet8 MobileTalk utilizes a downloadable software application that can currently reside on any Windows, Palm or Symbian based mobile phone to seamlessly connect international calls from the mobile phone to the Packet8 digital VoIP network. Routing these calls over the Packet8 network enables cell phone users to significantly reduce their international phone bills and maintain high international voice quality while still enjoying the convenience and flexibility of mobile calling. [...]

With Packet8 MobileTalk, subscribers won't think twice about calling Europe or Asia because instead of $1.00 to $3.00 per minute, they will be paying as little as $.02 to $.05 per minute over the Packet8 network to most destinations. With more than 340 mobile phones from any cell phone carrier currently supported, the Packet8 MobileTalk service is a vital tool for mobile business professionals and consumers. [...]

Unlike calling card, callback and other reduced-rate international mobile calling services, which require the user to dial numerous key strokes in addition to their destination number or make their calls through cumbersome software applications, Packet8 MobileTalk users can dial calls directly and natively from their mobile handset, contact list or speed dial directory with no additional keystrokes - a significant advantage when, for example, placing a call while driving. Once the destination number is dialed or selected, the Packet8 MobileTalk software application identifies the international prefix being called and redirects the call to a local Packet8 network access number. With Packet8 MobileTalk, all calls are carried to the Packet8 network over the subscriber's existing cellular voice phone service and do not require access to an expensive monthly data plan or WiFi access point. [...]

There is a one-time $9.99 activation fee for the service and a monthly fee of $9.99 for non-Packet 8 subscribers. Existing Packet8 VoIP subscribers, including subscribers with one Packet8 MobileTalk account, pay a monthly service fee of $4.99. Packet8 MobileTalk overseas calls are billed at Packet8's low international rates which can be found at
That's a quite expensive monthly rent for a small piece of software. Given that there are no calls included in the recurring fee of $9.99. On top you always have to pay the per minute price for the calls, which is e. g. $0.03 to a German landline. The several Betamax companies charge only half the price, $0.015, for the same service. Or the call is free, included for instance in Voipstunt's flatrate price of € 10.00 for 120 days (roughly equivalent to $ 13.40).

I guess that people who acquire Packet8 MobileTalk suffer very strong from dialing "numerous key strokes in addition to their destination number or make their calls through cumbersome software applications". If not, $9.99 is a rip off. Taking into account that other callthrough applications like Runningmobile's cost just €19.95 (about $30). But only one time, when you buy it.

Nevertheless the functionality of Packet8 Mobile Talk is quite smart and better than other "cumbersome software applications". Perry Nalevka is Director of Business Development at the Israeli company MobileMax, which developed the software for Packet8. He explains in a comment to Pat Phelan's regarding blog entry:
1) The application sits on in the background of the phone and allows the user to use their phone normally and dial from their address book or call log

2) Supports BlackBerry, Windows, Palm and Symbian phones currently. The Java will be ready next year.

3) Calls are “caught” and routed by pre-configured parameters. In the case of Packet8 any call that begins with “011″ or calls that begin with “+” that are not in the US.
Hopefully Nalevka doesn't break an NDA by telling that his company is behind Packet8's software. He mentions it also in Tom Keating's blog. So MobileTalk from Packet8 works similar to the Wifimobile application, which sits in the background of your cell phone and only kicks in when you dial an international number. Only that Wifimobile tries to establish the call over Wifi while Packet8 establishes the call over callthrough. The callthrough numbers are stored in the software, like it is at iSkoot.

Let's wait and see now when Wifimobile comes up with the same callthrough feature. They have already recognized that Wifi isn't everywhere and offer callthrough numbers in 12 countries. Much better than MobileTalk which works only in the US. Also at Wifimobile you pay only $15.99 per month and get unlimited calls to landlines in 40 countries. This feels much cheaper than Packet8's offer. The only point is that Wifimobile's application works only on Nokia smartphones and the nifty callthrough is not yet part of the software. Users still have to dial "numerous key strokes in addition to their destination number".

Which brings me to the point: Companies like Truphone, Gizmo Project, Wifimobile and the like should make callthrough numbers a part of their mobile applications to make them usable outside of Wifi.

Or couldn't Jajah strike an agreement with MobileMax and let them make a software which handles the Jajah Direct numbers? Last week they celebrated themselves for eliminating the need for computer to make Internet calls, only to present a system that's not less complicated: Now people have to dial numbers which are 24 digits long.

A similar case is Truphone: Their software does pretty much everything. It automatically updates the call forward when you insert a foreign SIM card in your cell phone while travelling. Couldn't it also hold some callthrough numbers? If the company doesn't want to set up their own numbers they could surely make an agreement with Sipbroker or Tpad. These VoIP companies have callthrough numbers in nearly every country of the world. The Truphone software could automatically "sense" which country's callthrough number to use, since it already uses a similar functionality to forward calls from Truphone number to local SIM card. If that's not so easy the Truphone software should have a button to choose the country.

Or maybe Tpad and Sipbroker should design their own callthrough softwares, a proposal I directly made in their forums. Tpad's answer from the forum admin:
I will definitely mention your idea to management, but early next year we are starting work on a Tpad Global Freephone Number (cant mention too much detail at the moment, but from what we have come up with so far it is looking pretty good).

We are aware of the German Running Mobile, but we will have to check the other sites out.

Thanks for your ideas, we respect what our forum members want and we will try our best to develope them.
A "Tpad Global Freephone Number"? Now that's even more tricky. It would address the downside of the Sipbroker which is explained in a comment to Pat Phelan's blog entry:
What would make more sense for a large player is to negotiate preferable rates for access through 00800 (international toll free) straight to their own VOIP switch. Going through sipbroker access numbers that are operated by dozens of different VOIP carriers would not lead to consistant QoS.
OK, so QoS fans should use their own numbers, although many people use the Sipbroker numbers without problems. In the forum of Sipbroker's mothership Voxalot we developed some interesting ideas.

Maybe Voxalot could design my "callthrough dream application"?

It holds all Sipbroker numbers, kicks in only when make an international call and let's me use my own VoIP providers - like a already do on Voxalot's all purpose VoIP PBX. People would always only pay a local call and the international part goes over the respective VoIP provider. The mobile application should always “sense” in which country the cell phone is situated and choose the local Sipbroker number to establish the call.

I am craving for a really comprehensive application: sitting in the background like Packet8 and always kicking in when I need it, automatically making use of the callthrough number of the country where I am. Be it Jajah's, Tpad's, Sipbroker's, Net2max' or whatever callthrough number. I am a client of all these companies anyway.

It should be a "callthrough consolidator", like Devicescape is a Wifi consolidator for mobile phones. Devicescape let's me consolidate all the Wifi hotspots for my mobile phone into just one virtual hotspot. The callthrough software should do the same with all these numbers. I would even make myself the work to copy all callthrough numbers into my account on a website. The way that I can copy all login data of different Wifi hotspots into my account on the Devicescape website. Devicescape knows them all. No hassle with Wifi configuration on my tiny phone keyboard.

Who can build a Devicescape for callthrough?

Maybe a guy from Poland, called Marek. But until now he has only sent me ideas that go in this direction. No downloadable application.

Monday, November 19, 2007

Voxalot's Facebook application for really free phone calls

You know that I bashed Facebook very hard for being a terrible time sucker. Many Web 2.0 applications need too much attention, compared to their value. But there are some utilizations that make me smile, because the unleash the potential of Web 2.0 without wasting my precious time and money. Like Voxalot's latest Facebook application, VoxCall for Facebook, that really disrupts telecommunications. It let's me make free phone calls without touching the PSTN. Read the announcement:

On Monday 19th Nov 2007 Voxalot will be officially launching our new social communications application for Facebook called VoxCall.

VoxCall is an exciting new initiative from Voxalot that allows Facebook users to click on their friends and initiate phone calls. The beauty of VoxCall is that it is self-organising in that if your VoxCall friend changes their contact phone number, you don't even have to be notified... VoxCall will use whatever number they have registered.

VoxCall also offers both public and private chat rooms where VoxCall friends can get together for a group discussion.

The underlying technology that VoxCall uses to connect calls is Voice over IP addresses (often known as SIP URIs). When you add the VoxCall application, you will be prompted to enter your SIP URI. To ensure that you are the rightful owner of that number, VoxCall will display a PIN number on the screen and then call the number you entered. Your phone will ring and you will be prompted to enter the PIN, which is validated.

As such, VoxCall supports calls between friends that belong to *any* "open" voice network (not just Voxalot).

The beauty is that VoxCall uses VoIP without touching the PSTN. My buddies just enter their SIP URI and I can call them with just one click in Facebook. When they change their SIP address I don't have to bother to update my data since their Facebook button stays the same. We stay connected for free from SIP to SIP.

I find this much more nifty than the Facebook apps from Jajah, Jangl, Jaxtr, Rebtel, IVR Technologies, iotum, Sitófono or Grandcentral. They also connect people on Facebook and let them call me for free, in most cases. But there is always a telephone number involved, so that someone has to pay an incumbent telco which provides them.

Sunday, November 18, 2007

The iPhone is beautiful but nasty

Finally I could get my hands on the Apple iPhone and check it out for one day. I must say that I am not that overly impressed like others commentators. The iPhone is a real multimedia machine, a true Apple product: fancy, with sharp pictures and fat sound. But it's definitely no Jesus phone. It does some things that I am really missing on my smartphone, like seeing every Youtube film. But the iPhone also full of small bitchinesses, like a spoiled starlet.

Youtube lies behind the goggle box

To see Youtube I just tip on the icon with the old TV set and it starts directly. Unlike other smartphones the iPhone delivers the entire Youtube on the screen, not just some handpicked films, like the mobile version for Symbian does. That's great because Youtube is Television 2.0 where people decide for themselves what they wants to see. The editorial preselection on my Nokia smartphone is always wrong with it's recomendations.

On the iPhone I just enter my search word and as result I get as much films like on my desktop PC. The only problem is that the virtual keys on the touchscreen are much too small, which makes me commit many typing errors. The picture quality is great, due to the high resolution display with 160 dots per inch. To fast-forward the movie or to stop it I just have to grab on the display to make the necessary buttons appear. I did that until the fat fingers on the screen seriously inhibited my Youtube pleasure and I had to clean. The landscape format gives you a real TV feeling, especially if you like cartoons. But I don't understand why the picture stayed in landscape mode when I put the phone upright. I love the iPhone feature which makes the entire screen turn when you move the phone in this direction.

Youtube fat fingers on the iPhone
Youtube fat fingers on the iPhone

Wifi is convenient but uncomfortable

However it's indispensable to have fast Wifi internet access for Youtube. With EDGE I had to wait eternally even for websites, when I played around with the iPhone in the Berlin subway. On my 3G smartphone I am used to read the latest news there without any problems.

Of course it's great that the iPhone automatically logs into every Wifi network that it has used before. But setting up a new hotspot is horrible. The iPhone finds the network's name very fast, but then follows the input of the password which in my case consist of lower case letters, uppercase and numbers. On the damned iPhone I could only choose between uppercase an numbers. A friend of mine had the same problem when he checked the iPhone at home. The arrow key for uppercase and lower case has no effect. I just couldn't enter any lower case letters. To not go entirely nuts, I finally had to chang my Wifi password so that it consisted only of numbers. A passnumber, so to say, which I could enter easily. But that's not very safe. That's why I chose a new Wifi password directly after the iPhone test.

Cool Cover Flow

The iPhone obviously wasn't made for security savvy techno geeks, but for design fans. They will surely love such cool effects like the cover flow: Turn the iPhone into landscape format, while listening to the music, and wipe over the shown record cover. It makes the covers of all stored songs rotate until your next favourite tune appears. Looks really fancy and works better than Windows Vista, where such graphical effects often bring the entire computer to its knees. When I change from cover view to list view, the cover rotates and disappears in the backgroung. Looks quite spacy.

Fat sound, but only for expensive earphones

Also the sound of the iPhone is great with Apple's small white earphones. It's cristal clear and banged my eardrum quite hefty when I pumped up the volume too much. Too bad that these white squits always fall out off my ears and I cannot use my own earphones with the iPhone. As soon as I connect them the entire iPhone goes silent. The phone doesn't work with every earphone because Apple moved the plug more inside the device. I already have great headphones from Philips which make me look like a DJ. They have cost only 3 Euros in a department store, cover my entire ear and have a great sound too. When they get broken I will buy new ones. That happens every few months because the cables are thin, also the iPhone's. Only for the iPhone squits it's really expensive to buy new ones: at least 40 Euros at Gravis, Germany's biggest Apple dealer.

iPod and iTunes are not the same on the iPhone

To listen to the music the iPhone has two buttons which have similar names but do different things: iTunes and iPod. The first one is to buy music and the second is to listen. The iPod button hides all the functionalities we already know from the iPod MP3 player: playlist,album, genre, artist and all that stuff. Nothing has changed and that's OK since I don't have to learn anything new.

The easiest way is to use the iPhone like an iPod: organize everything beforehand in iTunes and then just synchronize it with the iPhone. But before I could to that, I had to update the iTunes software again. Nearly every week it asks me to do so.The 63 MB download and the installation took nearly half an hour this time. Again it was very important to switch off the automatic synchronization in iTunes, before plugging in the iPhone, and to use the cell phone as an external hard disk. If not, all the music had disappeared that my friends had bought and downloaded before. The laptop computer had it just overwritten.

iTunes also works wirelessly

I also could have avoided the synchronization process, because iTunes works nearly completely as a standalone application on the iPhone. But only nearly completely. I could have searched through the entire Apple music store from the iPhone and I could have bought songs over Wifi or the EDGE mobile phone network with just one click. The last used iTunes ID comes as a preset, you just have to enter the password to finish the purchase.

But why of all things the free podcasts cannot be downloaded with the mobile iTunes version? They are my favourite feature. Unlike in the PC version you just get albums and titles for sale as search results. It would be so great to download the latest TV newscast over the air to the iPhone and see it on my way. At home I never would have time anyway.

At the end I was really happy when I could download my favourite podcast to a laptop computer and synchronize it with the iPhone: Dance Department, number 112. One hour of finest electronic dance music. Every week another world famous DJ spins the turntables. This week it's Ferry Corsten who also did great remixes for Moby and U2. The download is free of course. My favourite iPhone button is located at the bottom right of iTunes. It's name is "Further". When I touch, it all the content comes in neatly ordered: albums, audio books, compilations, composers, genres and also podcasts. That way I can find my favourite programs easily.

But I had to look for this button quite a long time.

Saturday, November 10, 2007

Next monday is the real Google Phone day

I am really looking forward to next Monday when the software development kit (SDK) for Android, the new operating system from Google for mobile handsets, comes out. Hopefully that brings answers.

When they launched the Android last Monday there was very much buzz but few to be seen. Valleywag pretends to have screenshots of the first Googlephone app, but that's not very much of an information.

On tuesday I interviewed Florian Seiche, Vice President Europe of HTC, the most important smart phone producer in Google's Open Handset Alliance. But whenever I digged deeper he said that we have to "wait till monday when the SDK comes out".

At least he could tell me that Android has nothing to do with Openmoko or other Linux versions for smartphones. No Openmoko developers worked for the Android, no code sharing or whatever. Before I had the suspicion that Google's new mobile OS was in fact powered by the community solution Openmoko.

But that's not the case. Even Sean Moss-Pultz, initiator of Openmoko and responsible hardware product manager at First International Computer (FIC), doesn't have much knowledge about the Android, he told me in an email. He doesn't know the code yet and is waiting for something to compare.

So let's wait for Monday, November 12, 2007! That`s the real Google Phone day.

Friday, November 9, 2007

Jajah's 2007 IPO cancelled

VoIP callback service provider Jajah has cancelled their IPO for 2007, an idea they first communicated to my fellow Berlin journalist Thomas Ramge in his interview for the German economy feature magazine Brand Eins. When they met in December 2006, Jajah's co-founder Roman Scharf told Ramge that the company would go public at the end of 2007. The year is nearly over and Scharf now had to correct the story a tiny bit in an interview he had on wednesday with Reuters on wednesday, November 7 2007, postponing the IPO for nearly a year.
NEW YORK, Nov 7 (Reuters) - Internet-based phone company Jajah Inc aims to go public in the second or third quarter next year to expand its low-cost calling service globally, co-founder Roman Scharf said in an interview on Wednesday.
Too bad that the Reuters reporter Ritsuko Ando is no frequent reader of Brand Eins or GigaOM and missed a much more juicy story, which Om Malik puts in the right words for us:
Jajah’s Hypothetical IPO Delayed Another Year

Jajah, the VoIP callback service provider that shifted from paid to “free” and was dreaming of an initial public offering in 2007, has pushed back its IPO plans until the second or third quarter of 2008, co-founder Roman Scharf told Reuters. The timing seems about right — the way everyone is going nuts here in the Valley, profitless IPOs could make a solid return by the middle of next year.
Scharf says that they would need $100 million to $200 million to bring Jajah within a year to a level of 50 to 80 million customers. That would be the purpose of a possible IPO. "We want to do this next year. We believe the second or third quarter next year might have the right environment for us to go public."

These numbers are very humble, compared to the evaluation of 2.9 billion dollars which RRS Capital Strategies Services from Vienna credited them as "fair value" in May 2007 after the investments by Deutsche Telekom and Intel. They deducted this virtual price from Jajah's user data and the conditions under which Skype had been sold to Ebay in 2005. As we know Skype's value has fallen by $1.43 billion and this is also affects the valuation of other internet phone companies.

Until now only stock holders of Jajah's investor Qino Flagship could have fun with the company. Qino Flagship is publicly listed and the only stock trading possibility to participate in Jajah's success. Since June Qino's value has fallen from €15 to €10.

But still the carpetbaggers are sucking up every Jajah news, no matter how goofy it is. In the web forum of the Austrian magazine Börse Express they try to construe even the slightest Jajah move. Obviously they are happy about the new business model: in-call advertising as an opt-in solution. Users listen to an audio ad before every phone call and receive Jajah minutes in exchange. 50 per cent of the advertising revenue gets the user and the rest shares Jajah with the phone company, explained the other Jajah founder, Daniel Mattes, in an interview with the German newspaper Frankfurter Allgemeine Zeitung.

"JAJAH's patent pending in-call advertising platform turns the inventory of the world's telephone calls into an advertising market place", said Mattes in the German press release. "Google paved the way around a decade ago with Google AdWords. Their approach was revolutionary, as they respected the users' common sense and reactions. We are now trying to do the same for the massive amount of phone call inventory. Think AdWords for the phone", he says in English.

Comparing oneself to Google is always a great way to get publicity. Does anybody remember when it was cool to sell a company as "future Microsoft"? Although Jajah has filed a patent application they are not the first with such an idea. The Rebtel clone Talkster also plays 10 second ads before every call. And Californian Pudding Media even wants to eavesdrop conversations to deliver targeted advertising during their free phone calls.

Monday, November 5, 2007

I think Google's Mobile Phone Platform Android will be great

So the Google Phone is out and the first reactions are not too good. At least at GigaOM there is more criticism than kudos. Nobody wants to hype the new product, nearly everyone is nagging. Since Google's shares are worth more than 700 dollars it's not cool anymore to be a Google fanboy.

I got an invitation to the same press call like Om, but unfortunately it started when my workday ended. May other journalist cover the story. Also it seems that the press call was not very much of a pleasure. "They completely dodged my question about how does it reconcile with other mobile linux efforts which are backed by none other than partners like Motorola", writes Om Malik.

Personally I like very much what he tells about Android, Google's new mobile phone plattform:
What is Android? A fully integrated mobile “software stack” that consists of an operating system, middleware, user-friendly interface and applications. It will be made available under one of the most progressive, developer-friendly open-source licenses, which gives mobile operators and device manufacturers significant freedom and flexibility to design products. Next week, the Alliance will release an early access software development kit to provide developers with the tools necessary to create innovative and compelling applications for the platform.
Does anybody know if this has something to do with OpenMOKO, the other open Linux cell phone platform? Maybe Android is just the same?

How open is Android compared to OpenMOKO?

The latter let's you manipulate everything to the very core of the mobile phone functions. Yet now there are thousands of great free Linux programs running on the OpenMOKO devices. I would love to see this kind of openness backed by heavy weights like Google and the other mentioned companies.

I hope that Android is as open as the Open Handset Alliance's website says:
Android was built from the ground-up to enable developers to create compelling mobile applications that take full advantage of all a handset has to offer. It is built to be truly open. For example, an application could call upon any of the phone's core functionality such as making calls, sending text messages, or using the camera, allowing developers to create richer and more cohesive experiences for users. Android is built on the open Linux Kernel. Furthermore, it utilizes a custom virtual machine that has been designed to optimize memory and hardware resources in a mobile environment. Android will be open source; it can be liberally extended to incorporate new cutting edge technologies as they emerge. The platform will continue to evolve as the developer community works together to build innovative mobile applications.

All applications are created equal

Android does not differentiate between the phone's core applications and third-party applications. They can all be built to have equal access to a phone's capabilities providing users with a broad spectrum of applications and services. With devices built on the Android Platform, users will be able to fully tailor the phone to their interests. They can swap out the phone's homescreen, the style of the dialer, or any of the applications. They can even instruct their phones to use their favorite photo viewing application to handle the viewing of all photos.
I think GigaOM's reader rohit understands it right:
i think this is a much bigger potential play at replacing the whole mobile phone software stack and aimed at making it truly an information appliance. think of it as an IP-services led “phone” design, not a telco-call based device.
It's a Linux for phones! You can do everything with it, if it's really open. I already wonder how it cooperates with Google's Ubiquisys femtocells. It annoys very much that my cell phone is not as open and flexible as my PC. Give me a command line to my cell phone and I will be happy!

Or, as commentator David Jacobs puts it:
Being an open system, hackers will have a field day with this and it could get some serious traction among the geek community who are so frustrated with the iPhone limitations.
Here you can get more quotes from Android's developers:

"Even A teenager in the basement and a senior designer in a big company - they have the same chance", says the film. That would be great because I don’t want just a Google Phone. I want many different of them for different purposes. That’s why I think the OS approach is great. The iPhone just isn’t enough anymore. It’s so 2007.

I got the offer to do interviews to John Wang, Chief Marketing Officer of Google's hardware producer HTC, and Florian Seiche, Vice President Europe of HTC, tomorrow. Let's see if that will answer my open questions.

Friday, November 2, 2007

3Skypephone doesn't do mobile VoIP

Many commentators didn't realize that the 3Skypephone doesn't really do mobile VoIP. Even my friends at Areamobile thought at first that a 3G data flatrate would be necessary to use it. It was quite easy to get this false impression as the press release only said:
29th October 2007 – Skype, the global Internet communications company and 3, the mobile operator, have launched a new affordable handset that lets you make free Skype to Skype calls and send free Skype instant messages from your mobile phone to other Skype users no matter where they are.

The 3 Skypephone is a fully-featured 3G Internet phone with Skype built-in. In addition to Skype calls the phone makes conventional calls and can be used to access 3’s broad range of other internet services.

3 customers using the 3 Skypephone will be able to make Skype calls and send instant messages on the move with the push of a button. This is the first time an operator has offered a mass market device which is tailor-made for free calling over the internet from a mobile. Now, all of Skype’s 246 million registered can be reached for free with the 3 Skypephone. ...

No more technical details were given. But the mobile Skype calls on the 3Skypephone are basically GSM phone calls, since it's the iSkoot service which is powering them. The day after the launch iSkoot could send out their own press release:

„CAMBRIDGE, MA – October 30, 2007 – iSkoot today announced that it has been selected by Skype to help power the 3 Skypephone – the first ever mass-market Skype-enabled mobile handset. ..."

This means that Skype calls from the 3Skypephone aren't 3G VoIP calls. They are GSM calls from the phone to the 3-iSkoot server, which then cannels them over the fixed line internet to Skype. The data connection is only used to show the presence of the Skype buddies.

The 3Skypephone doesnt really do any mobile VoIP, since it uses Skype only in the fixed line part of the call. The bad voice quality, that for instance Luca critizes, is not because of unreliable 3G coverage. Possible causes are the low sound quality of the GSM codecs or transcoding issues at a gateway level. Yet still iSkoot is a nifty solution to guarantee Skype coverage nearly everywhere.

That's also why their FAQ list says:

Q: Will it work on 2G, 2.5G& 3G networks?
A: Wherever you have coverage in the UK, Skype will work. If you can make a normal voice call, you will be able to make a Skype Call.

Now it's also obvious why the technology doesn't work outside of the 3 network: It relies on free on net calls from the 3Skypephone to the 3-iSkoot server. Luca said that "if you are roaming (in Italy in some places you are under Tim coverage and not 3) Skype calls don’t work".

The 3Skypephone is no new invention but just another marketing skin for iSkoot. Take that TIME magazine if you want to elect your next "Invention Of the Year". ;)