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Skype feud over mobile video calling signals more fierce competition

Skype?s decision to suspend its interconnectivity with handheld communication service Fring might mean the mobile video calling market is about to enter a competitive war.

The split came after Fring updated its iPhone application that let users engage in unrestricted two-way video calling over Skype.  Skype reportedly suspended its interconnectivity with Fring because the latter company violated its end-user license agreement, though Fring decried the move as anti-competitive.

?We need industry leaders that will call for openness and stand behind it,? said Jake Levant, vice president of marketing at Fring, London. ?To cry out for freedom to regulators and then turn around and block others who want the same does not bode well.

?Fring will continue to fight for mobile freedom ? freedom of choice, freedom of communication,? he said.

Fring is bills itself a full social mobile Internet communication experience, with full VoIP capabilities across platforms, two-way video calls over VoIP and live chat. The service allows interconnectivity with other major online messaging platforms like MSN Messenger and Google Talk.

The company claimed to launch the world?s first video-calls-over-Internet protocol last winter (see story), and the launch of its updated iPhone application last week caused a spike in mobile video calling volume.

Skype has been making moves of its own in the mobile space, as it announced a free mobile calling service in partnership with Verizon in March (see story).

He says, she says
Skype responded to Fring?s very public accusations of anti-competitive practices through its in-house blog, The Big Blog.

?Fring was using Skype software in a way it wasn?t designed to be used ? and in a way which is in breach of Skype?s API Terms of Use and End User License Agreement,? said Robert Miller, vice president of legal at Skype, Luxembourg, in a blog post. ?We?ve been talking with Fring for some time to try to resolve this amicably.

?However, over time, Fring?s misuse of our software was increasingly damaging our brand and reputation with our customers,? he said.

Skye also claimed that it did not suspend Fring from its service, but Fring made that move autonomously.

?In this case, there is no truth to Fring?s claims that Skype has blocked it,? Mr. Miller said. ?Fring made the decision to remove Skype functionality on its own.?

Industry opinion is divided on the subject, and some independent observers wonder if Skype has motivations other than brand protection.

?While Skype has announced that Fring is violating its End User Agreement, it seems very likely that Skype may be launching a competing service ? especially given the proliferation of Skype video used in the workforce ? which could play a big part in this decision,? said James Citron, cofounder/CEO of Mogreet, Venice, CA.

A big future for video calling
Whatever the case me be, the split between Skype and Fring comes as mobile video calling is poised to take off.

?The mobile industry grows and evolves as it maintains open standards that work across networks and devices,? Mr. Citron said. ?Do you remember the early days of messaging when you couldn't send a text to a friend's device on a different wireless carrier?

?Once wireless networks built interoperable networks to enable cross-carrier text messaging, consumers adopted mobile messaging faster than nearly any other form of communication and it created a multitude of new revenue opportunities for several players in the mobile ecosystem,? he said. ?For mobile video calling to be a mainstream consumer behavior, it will likely require a simple user experience and wide number of handsets and networks that support it.?

Fring claims that Skype?s actions obstruct such progress.

?This fragmentation of the market is bad for mobile,? Mr. Levant said. ?If each system remains closed, then communication and activities will remain limited to those systems.

?As a parallel, can you imagine if you were only able to send emails to people in the same ISP?? he said. ?We can't, and are working to create open, rich mobile Internet communication.?

Final Take
Peter Finocchiaro, editorial assistant at Mobile Marketer, New York.