O2 to compete with Skype on low-cost international calls

Unwilling to see its voice revenues torn further apart by mobile VoIP providers, O2 UK has decided to compete with the likes of Skype and offer a new service that will allow unlimited international phone calls for a fixed fee.

The service, which is in beta at present, starts from £5 a month and allows the user to call one number--either mobile or fixed--in one selected country at anytime. The user can also change this number twice per month.

For £10 per month users will get three numbers, while £15 per month will provide five. However, while O2 UK has stated that there is a fair usage policy of 5000 minutes per month, O2 will automatically terminate the call after 60 minutes rather than charge the user a premium.

The company said that the service included 60 countries at this stage, but the international number will only be available in 24 of them. There are some surprising inclusions in the list; Mauritius for example is there but not Mexico.

O2 said that the trial would continue until the end of July 2010 and might be extended after that.

This effort to combat the rise of mobile VoIP traffic is at odds with a recent study conducted by Morgan Stanley which predicted that mobile VoIP would grow 103 per cent year-over-year up to 2014, a growth rate second only to video traffic.

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