Don't panic this is not the end of the world

Implications: What you get with a Skypephone is a service that allows another form of IM as long as you have spent a minimum of £10 per month.  This is not VoIPoM this is something aimed at retaining customers and getting them to keep the phone on so that they can recieve calls.

Analysis: The customer base at Three UK is of such a poor quality the Management continues to take a disruptive approach to the market.  On the current path they will become the seventh largest network in terms of subscribers by the end of the year with TWO MVNO operators having a bigger customer base.

Talking to some who were at the launch of the Skypephone what you discovered  was that what you did not get was SkypeIn or SkypeOut and so the feature set was somewhat limited.

Last year Three were the first UK network to offer flat rate data tarrifs with the X series product that gave access to Skype as well as another services for contract customers.  The take up even with free equipment for slingbox services has not been great.

Now we have a service that gives consumers access to Skype services on a personalised handset.  Whilst some features like the dynamic address book are indeed excellent options I cannot see many people running to the shop to snap up a handset.  Those that use Skype are using the service from the kitchen table of office not out in the street and so I question the demand.

The day after the launch I went into all of the Three stores that I passed in the course of my work day, none were able to provide me with a handset as they were not is stoke and they did not expect them for another week.  This has lead me to suspect that this is little more than a PR push by Three before the launch of the iPhone next week by O2 in the UK and then the Google Phone the week after.

All I can think is that this is the actions of a network that have under performed in terms of Customer growth.  The launch of the Flext tarriffs by rival T-Mobile saw a significant number of price sensitive customers churn off the network.  The probability that the introduction of the service will reverse the decline in subscribers is unlikely in my view.