Skype and Sling hitch a ride

Olga Kharif
23 Nov 2006

As recently as a few months ago, the wireless industry showed little apparent interest in partnering with Sling Media, a maker of software and devices that let users watch TV and recorded programming on mobile devices.

After all, Sling Media makes products that threaten to compete with the TV services that mobile-phone companies are eager to sell"”not to mention its services could hog already crowded airwaves used for cell-phone calls and data.

And yet, on Nov. 16, Sling Media Chief Executive Black Krikorian found himself holed up in a conference room in London with executives from some of the world's biggest mobile-phone stalwarts: Hutchison Whampoa, Nokia, and Sony Ericsson.

The occasion: Hutchison's British wireless operator 3 was unveiling its X-Series, a bundle of wireless broadband applications that includes Sling's SlingPlayer Mobile.

X-Series, which becomes available in Britain on Dec. 1 and in other parts of the world in early 2007 for a flat monthly rate, will include Sling as well as other new applications that, until recently, carriers didn't want to touch. They include Orb, which lets users access PCs through mobile devices, and a service from eBay's Skype and startup iSkoot, which enables Web calling via mobile phones. Search and messaging capabilities from the likes of Yahoo!, Google, and Microsoft will be part of the X-Serve offering as well.

Sudden recognition

For some of those companies"”Sling, Orb, and iSkoot, which have struggled to gain recognition"”it's a possibly game-changing deal. 'On the Internet, new applications that are unheard of today are popular a few months later,' says Geraldine Wilson, a vice-president for Yahoo Europe.

Analysts say the deal will finally bring these companies recognition, legitimacy, and new customers. 'Direct-to-consumer [sales] are a hopeless undertaking [for most companies to make money],' says Andrei Jezierski, co-founder of venture consultancy i2 Partners. European mobile carrier Orange, which also struck a deal with Orb in November, reckons that the Orb user base will balloon by between 50,000 and 100,000 in the next three to six months, according to Orb Chairman Joe Costello. Orb has amassed 458,000 users since introducing its first product in 2005.

Vodafone, which rolled out Orb's software in Germany, might soon introduce the service and a related, aggressive marketing campaign in more countries, Costello says. 'We are also talking to [other] carriers in Europe and Asia,' he says. ISkoot, a maker of software that lets carriers run Skype's low-cost calling service more efficiently, is 'in advanced stages of talking with several European carriers, as well as in discussions with carriers in North America,' says CEO Jacob Guedalia. The same goes for Sling.

A taste of things to come in the US‾

It's an unexpected turn of events. Skype, which enables free calls between users, could chip away at carriers' international and long-distance fees. Orb and Sling could threaten the wireless service providers' home-brewed mobile video and TV offerings. And if these bandwidth-thirsty services become popular, they could put a strain on the carriers' mobile networks. Indeed, X-Serve would appear to be a wireless carrier's worst nightmare.

And yet, 3, Orange, and Vodafone are undeterred.

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