Skype, which claims more than 100 million registered users, established an early lead in public VOIP calling. It has traditionally offered the best voice quality, although it faces increasing competition. Skype was also the first to offer value-added services to connect VOIP callers to the public switched telephone network (SkypeOut) and to allow users to buy a local telephone number that PSTN users can call to reach a Skype soft phone (SkypeIn). "Skype is successful because it just works. ... It is easy to use and seamlessly traverses network address translation [devices] and firewalls," says Jeff Pulver, chairman and founder of Pulvermedia, which offers the competing Free World Dialup.

The advantages of peer-to-peer VOIP go beyond just cost savings, says Stofega. "From a consumer perspective, it's a price game, but from a business perspective, it's evolved into an application, a tool that can help business processes."

For example, Peter Dout, IT specialist at US Robotics Corp, says employees use Skype to communicate from home with overseas offices in different time zones. "You don't have to be in the office to take that Skype call," he says. The company, which also sells Skype-compatible headsets, has formally embraced peer-to-peer calling and even includes a Skype client in its basic desktop system image.

But US Robotics' use goes beyond interoffice calling. Customers can click on a button on its Web site and connect to its call center via Skype. Dout created a single Skype ID for support calls and uses SkypeOut to forward incoming calls from that ID to a regular PSTN number in the call center. Routing calls to the call center through the PSTN allows Skype calls to be logged and recorded just like any other incoming call. "The infrastructure I have set up for this call center all gets used. It's the same as a regular land-line call," says Dout. The configuration also enables US Robotics to manage just one Skype ID for all incoming Skype calls.

For Mary Galbavy, director of customer operations at US Robotics, the key benefit has been cost savings. In the US, incoming calls through SkypeOut cost US$0.017 per minute versus $0.05 via the 800-number support line. The big savings, however, are realized in its European call centers. In Italy, for example, incoming calls over the PSTN cost $0.46 per minute versus $.023 with SkypeOut. Since users also pay a charge when calling in, they have an incentive to use Skype, and 26 percent of all callers in Italy do so. "We cut our telephone costs by a minimum of 20 percent," says Galbavy. Worldwide, "at least 5 percent" of US Robotics' customers are using Skype, and customer use has been growing at an annual rate of 175 percent, she says.