Microsoft Skype Deal Strains Relations With AT&T, Verizon Possibly

With the Microsoft Corp. purchasing Skype Technologies SA for $8.5 billion, the Company may now find relations with wireless operators somewhat strained, when it comes to supporting smartphones with Windows software.

Yesterday I did an article on Microsoft rumoured to be purchasing Skype — see here, and now I can confirm that the deal went through. What this means is that the Skype Internet-calling service will be available on Windows phones, also Microsoft’s Xbox, and Kinect game consoles, and therefore, members will be able to make free voice and video calls to each other, with calls to most outsiders being charged at a rate of 2.3 cents a minute.

Some wireless carriers such as AT&T Inc. and Verizon Wireless may see Microsoft’s purchase of Skype as threat because their voice call revenue could be reduced. “It is kind of a head scratcher to me how Microsoft is going to navigate the complicated relationships that it has to have with carriers at the same time as it is repositioning itself as a potentially major threat to their wireless voice business,” said Craig Moffett, who is an analyst at Sanford C. Bernstein & Co., as quoted in an article over at Bloomberg.

Microsoft is trying to expand in mobile devices with the introduction of the Windows Phone 7 operating system last year, as it faces slower growth in personal computers, which is the traditional market for their Windows and Office software. Microsoft has lost ground in the smartphone market to Apple iPhone and Google Android devices. This year they struck, a partnership with Nokia for use of Windows as the main smartphone software.

To read the full article by Amy Thomson of Bloomberg – click here. What do you think of the Microsoft Skype Deal? Please leave us your views below.

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