Millions affected as Skype goes down

Even as UAE authorities contemplate how to make Skype available in the country, the Internet phone and video service went down yesterday in a global service outage, exposing a weakness of the free online communication tool.

Skype, partly owned by Web retailer eBay Inc, said some users were having problems signing on. Users in the US, Asia and Europe complained of the outage on social network site Twitter.

In its Twitter feed, the seven-year-old company apologized for the disruption and said it was investigating the cause. Around 3:30 p.m. EST, it said the service was returning to normal, but that it may take several hours for everyone to be able to use it again.

The so-far unexplained outage, just days before the Christmas holiday, marked the latest blow to the service's reputation.

Telecoms authorities in the UAE said last week they were working on ways to make Skype available in the country. According to Mohamed Al Ghanim, Director-General of the Telecommunications Regulatory Authority (TRA), “Today the world is changing to IP. With regards to Internet telephony, only the telecom service providers in the UAE are licensed to offer VoIP services and they have started to provide these services already.

“This measure is set in place to protect telecom customers, as if a company is not registered with us, we cannot intervene or help should a problem arise.

We have been working with Skype and other VoIP providers to see if their services could be established here in the UAE,” he added, but did not offer any further details or say if and when such services would be made available to residents.

Dropped calls and service quality have long been seen as a weak point for Skype, which offers free voice and video services between users as well as low-cost calls to landlines. It had 124 million users as of October.

The company's last major outage occurred in August 2007 following a routine software upgrade.

Many consumers have been reluctant to cut off their landline and rely solely on services like Skype due in part to questions about its reliability. Such concerns, along with worries about online security, have slowed Skype's expansion into the business market.

It now also faces competition from rival online phone providers such as Google Inc, which lets its users make calls through their Gmail accounts, and high-end videoconferencing tools like Cisco Systems Inc's "umi" service.

Skype is expecting to raise up to $1 billion in an initial public offering, sources familiar with the matter told Reuters last month. One source has said the IPO will likely come some time next year.

Skype was founded in 2003. EBay bought it in 2005 for $3.1 billion.

In November, eBay sold a majority stake to an investor group including Silver Lake, Canada Pension Plan Investment Board and Andreessen Horowitz for $1.9 billion in cash and a $125 million note. EBay retained a 30 percent stake.
 

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