Staff Writer, CNET News.com
He lives in the United States. His fiancee is in Great Britain. He uses an Internet phone service called Skype to keep romance alive and phone bills low.
But there's trouble in paradise. The suitor says his cut-rate phone provider suddenly left him in the lurch, thanks to a billing glitch that's prevented him from using his account to place calls to his betrothed.
"I am sure they will straighten things out in a day or two, but if not, I will simply notify my credit card company to reverse the charge," he wrote in an e-mail to CNET News.com, requesting anonymity.
Among a crowded field of Internet phone providers, Skype has turned heads with its unique blend of technology, grassroots marketing and rapid adoption. Sixty-five million people have downloaded the free software in the 18 months since Skype launched its product. The company is currently signing up about 60,000 new registered users every day—numbers that draw comparisons to free software downloads that swept the Internet during the late 1990s, such as the ICQ instant messaging service. Skype adds an estimated 140,000 new users a day.
But the honeymoon may be coming to an end for the upstart phone provider as it branches out of its core free service into new paid offerings.
In recent weeks, there's been a spike in complaints about the company's first commercial service—SkypeOut—that lets customers cheaply make calls off the Internet to ordinary phone lines. Aside from having to wait days for accounts to be credited—as the anonymous suitor and dozens of other customers have complained—many SkypeOut users say their conversations are disrupted by a two-second delay between someone speaking and being able to hear what was said.
"It makes communication impossible," one unsatisfied customer said. Others complain that some calls aren't going through at all, and if they do, you can't hear the other person on the line, though they can hear you. For a few days last week, some people couldn't call U.S. phone numbers.
Skype spokeswoman Kat James acknowledges problems but says the customer numbers tell the bigger story.
"Skype constantly monitors call performance across the global network of users and seeks to enhance quality through continuous product development," James said. "As our growth indicates, we have a huge number of satisfied customers."
Getting what you pay for?
Voice over Internet Protocol (VoIP) services, such as Skype's, allow an Internet connection to double as a telephone line. The software makes for dramatically cheaper dialing, mostly because the calls aren't taxed or regulated, but also due to the efficiencies of using the Internet Protocol to ferry the calls, rather than techniques the traditional telephone industry developed decades ago.
Other VoIP providers charge a flat rate of about $25 a month for unlimited domestic calling. Skype is free between callers who both use the company's software. Via SkypeOut, the company will complete calls to ordinary landline and cellular phones, charging about 2 cents a minute to 20 countries in North America, Western Europe and Australia.
Skype's struggles to control what may amount to only minor glitches illustrate the bigger problem of how a low-budget provider handles customer service. Skype has a few hundred employees, but so far, Skype customer service relies mostly on e-mail, proactive customers and patience. James said the company is not in a position to send technicians to inspect individual user setups or Internet connections. "We rely on reports from users to investigate any potential trouble areas," she said.
That's how, for instance, the company learned that Internet connections behind firewalls are not able to use SkypeOut and was able to make people aware of workarounds. Skype lets users vent in free online forums, which are monitored by Skype staff who pass feedback to development and telephone operator partners, James said.
"We read forums to look at generic problems and of course listen to our users' opinions," she said.
Customer service addresses individual issues via e-mail, at email@example.com, according to James. "The customer service department is rapidly growing and enhancing the service level for Skype's premium customers," she said.
But that's clearly not enough, say industry insiders, competitors and—judging by the firestorm of protest on the forums—Skype's own customers.
One SkypeOut customer said she'd pay for technical assistance. Another was more to the point about how she bought SkypeOut minutes and felt cheated.
"The money has been debited from my bank account, a reasonable period has passed, and Skype have not met their side of the contract—so as far as I can tell, they've stolen from me," fumed one contributor to Skype Forum, a Skype-run Internet message board. "Further, they advertise Skype as something that will 'just work'—and it categorically doesn't. What a horrendous user experience."
Price of popularity
In some way, Skype is victimized by its own success and, at 800,000 customers, it's among the most successful services of its kind ever. Despite its desire to keep spending down, Skype may be forced to eat into its hard-earned revenues to bolster customer service staffs, suggest two industry analysts who report on VoIP providers. But because SkypeOut is Skype's only major source of income, that may be hard on a constrained budget, said one insider at Packet 8, a commercial VoIP provider.
But with subscriber rates high, Skype is pushing forward with other premium services, creating the potential for more awkward customer service crises.
The company is testing a voice mail system, the price of which is not being disclosed, as well as SkypeIn, a complement to SkypeOut in which landline or cell phone callers can call Skype users on Internet-connected devices on which the company's software has been downloaded.
But as Skype gets set to roll out those new services, customers continue to stew over its existing premium service.
"I've been unable to make a call for a week now and have got no response whatsoever from Skype," fumed Skype forum user Moubliepas. "It seems they really don't care about our complaints. We should unite to make our voices heard."