Skype is among the leading VoIP platform to be launched. With Skype, you can make calls to your friends in different locations, provided they have a Skype account. Besides, there is an option to contact people who don’t have a Skype account.
With Skype, you will enjoy free calls, begging the question of how the company makes money if it offers its calling feature free for all users. This post aims to answer all your questions.
Skype has a free calling feature between Skype users. However, you will incur credit charges when you want to call someone who doesn’t have Skype, such as through their landline. Skype has different calling rates bought as credit subscriptions to be paid monthly on its “pay-as-you-go” option. These charges for international calling and credit subscriptions are the main ways Skype makes money.
We will first understand how Skype works and its brief history. Afterward, we will discuss how Skype makes money and answer commonly asked questions about how Skype makes money.
Understanding Skype
VoIP technology has existed for a long time. Different giant companies are relying on VoIP technology, including Skype and Discord. With VoIP technology, people can comfortably make voice and video calls via the internet, and that’s what Skype capitalized on when it was being developed.
Skype was founded in 2003 but was later purchased in 2011 by Microsoft, the current owner. Skype was designed to offer a way for people in different regions to communicate via the internet without requiring carrier charges.
With Skype, you can make calls to an individual or a group call with friends while in a video conference. Its instant calling and messaging features make Skype a great and popular application among most people.
It gets better since no charges are incurred when you call someone with a Skype account.
However, non-Skype users will require a credit subscription to complete the call. Skype currently has translator software for Microsoft users using the Skype app on their Windows PC.
To use Skype for your communication, download its application from App Store or Google Play Store and create an account. Still, you can get the desktop Skype application and sign up for an account. Once you have your Skype account, log in and make calls to your Skype friends.
How Does Skype Make Money?
As a Skype user, it is normal to get curious about how much money Skype makes, especially since you enjoy free calls with your Skype friends. Besides, since Microsoft bought Skype for $8.5 billion in 2011, you may wonder why Microsoft would invest so much money in Skype if it had no plan of making returns from the purchase.
Skype has over 2 billion users, and there are different ways for the VoIP platform uses to make money and tap into the large client base. Here’s the thing, Skype makes money in two main ways: monthly subscription services and credits.
When you want to make a call via Skype, you can call another Skype user or someone with no Skype, such as your friend who uses a landline. You can even use Skype to send text messages.
With credits, Skype users can call other people who don’t have Skype. So, if you want to use Skype to send an SMS to your friend outside of Skype, that’s when you need to subscribe for credits, and through that, Skype will earn profits. The credit charges differ depending on the country where you are calling and the duration of the call.
For instance, a world subscription costs about $13.99 monthly. Skype allows users to take a monthly offer or use the pay-as-you-go subscription option. You can purchase different options under the pay-as-you-go, depending on your goal.
Skype doesn’t give the details of the total income it gets from the credits and monthly subscription, but with its many users, we are guaranteed that Skype rips sustainable returns to keep the company alive.
We’ve recently seen Skype introduce Microsoft Teams to replace Skype for Business as part of its Microsoft 365 tools, and we expect to see more tools in the future.
Skype is facing tough rivalry from giant companies like Zoom, which offer more videoconferencing features, and many users are shifting towards them compared to those using Skype.
Conclusion
Skype is a VoIP platform that lets users enjoy calls to their Skype friends and non-Skype users.
With Skype, you can make free calls to other Skype users.
For non-Skype calls and messages, you can subscribe to its credit options.
We’ve discussed what Skype is and detailed the two main ways that Skype uses to make money.
Frequently Asked Questions
Skype is a free VoIP platform you can download and install on your mobile phone or desktop. To use Skype, register for an account and use your details to sign in. You can start making Skype calls to your friends, including group video calls.
When using Skype, you can call other Skype users for free. However, if you want to send an SMS or call someone not using Skype or to their landline, then you must use the credit subscription options provided by Skype, and that’s how Skype makes money.
