Skype to Refund Customers Affected by Service Outage: Report

Skype's CEO issued a statement offering refunds for customers affected by the company's massive service outage.

Facing the wrath of its customer base following a massive service outage earlier this week, voice over IP provider Skype said it would issue refunds to those unable to make calls during the 30-hour shutdown. Skype CEO Tony Bates issued a statement on the company's blog, apologizing for the service outage and promising compensation. Bates also issued an update on the outage, claiming the company has been able to successfully stabilize Skype due to the "dedicated supernodes deployed by Skype's engineering team." The service is now at roughly 90 percent of normal user volumes, Bates said.

He said audio, video and IM are running normally, though a couple of the company's other offerings, including offline IM and Group Video Calling, are not available yet. "We are working hard to restore them in due course," he wrote. "We now understand the cause of the problem and we believe it was not caused by a malicious attack. But, we are still doing a full analysis and we will provide an in-depth post-mortem."

Bates said while nothing can make up for the missed experiences, the company is going to be sending out Pay As You Go and Pre-Pay users a Skype Credit voucher via e-mail. The voucher can be used to give users approximately 30 minutes of free calling to landlines anywhere in the world. "For our active subscribers, we will credit you with a week's extra subscription service. It may take a few days, but once implemented, it will be applied from your next renewal date," he said. "Again, we sincerely apologize to all of you for this service outage and the inconvenience it has caused. We know how important it is for Skype to be available, so you can connect to your friends, family and colleagues.'

Supernodes are users' computers linked by Skype's P2P software, acting like virtual phone directories. Skype employs millions of connections between supernodes and phones. When a user clicks to place a call on Skype and the app can't locate a user's computer or phone, it will attempt to ping a supernode to connect the call. When the supernodes conked out, millions of people were unable to make calls.

The outage, and resulting outrage, highlight the dependency many businesses and consumers have on VOIP technology, increasingly favored by midmarket-level companies looking to reduce communications costs. According to Frost & Sullivan's "North American VOIP Access and SIP Trunking Services Markets" report, the market earned revenues of $717.3 million in 2009 and it is estimated to reach $3.9 billion in 2016.

While stability clearly remains an issue, the report suggests the VOIP market will only continue to grow. The company predicted intense market competition and the resulting price pressures, at least when concerning the lower end of the market, as factors likely to keep the subscriber base growing at a faster rate than revenues, translating to lower margins for the providers.

The report explained that as session initiation protocol (SIP) emerges as the standard for IP telephony and broader multimedia communications, customers are increasingly requesting service providers to bridge UC islands. Company analysts argued SIP trunking allows enterprises to breach the confines of their voice-centric IP PBXs and embrace the broader multimedia communications environment enabled by SIP.