Skype teams up with C&W

The call-termination agreements with Cable & Wireless and B3G Telecom will allow Skype to route calls from its SkypeOut customers across their PSTN networks.

SkypeOut lets VoIP users make calls to traditional fixed line and mobile numbers, which means Skype must have peering agreements with other telcos who will let its VoIP traffic run from the Internet onto their networks. Skype already has several such peering agreements, but these two latest deals could help it to offer better quality of service.

"These partners will enhance the level of service globally as we innovate by developing the base free offering and deliver the additional premium enhancements our customers seek," said Niklas Zennström, chief executive of Skype.

Unlike Skype's free standard service, which only allows users to phone other Skype customers, SkypeOut users must pay to call a fixed PSTN line or a mobile phone. Charges start at €0.014 per minute for calls to much of Europe and America.

BT is also moving into the VoIP arena with its Communicator product. It claimed in July this year that SkypeOut users will lose out because they have to "scrape minutes of a prepay account" that will need topping up by credit card, rather than paying through a quarterly phone bill.

The deal with Moneybookers won't change SkypeOut's prepay nature, but it will allow customers with a Moneybookers account to use its payment system to top up their SkypeOut account.