The Role of Skype in Creating Value for Mobile Network Operators

Smile is happy to support OTT services like Skype, which other operators consider potentially damaging

A case study of Skype on KDDI

At the end of the last decade, KDDI faced a number of challenges. Voice revenues were in heavy
decline and were falling faster than any rise in data revenue could offset it. The lack of a presence
in the smartphone market limited KDDI’s ability to reduce the impact of churn to its competitors and
charge more for data services. Image too represented a challenge as KDDI sought a way to battle
DoCoMo’s premium brand and Softbank’s more youthful face. The operator had to find a way to
stem market-share losses and ensure that it retained its high-value customers while at the same time
succeed in acquiring new high-value customers of its own.

In 2010, KDDI and Skype entered into a partnership. Skype services were offered over “au”, the
operator’s mobile broadband service brand. The integration of Skype’s platform onto KDDI’s network
allowed for a superior voice quality for users of the Skype on au service and provided a clear
differentiator for Skype’s range of IS-series Android devices launched in November 2010.

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