Microsoft Discontinues Skype Credit & Phone Numbers - Focus on Subscriptions

Skype Discontinues Credit and Number Sales, Shifts to Subscription Model

Users of Skype have encountered a significant change: Microsoft has ceased the ability to add credit to accounts or purchase new Skype phone numbers. This move signals a transition for the platform towards a Software-as-a-Service (SaaS) model.

Instead of pay-as-you-go options, Skype is now directing users towards monthly subscription plans for both regional and worldwide calling. This alteration is anticipated to affect a substantial user base, with Microsoft reporting 36 million daily active users as of last year.

Change Implemented Without Formal Announcement

The alteration wasn't publicized through an official announcement from Microsoft. The information surfaced through a response on a Microsoft forum, provided by a volunteer moderator addressing a user’s inability to replenish their Skype credit.

This discovery prompted further inquiry, and a Microsoft spokesperson subsequently verified to TechCrunch that the sale of Skype credit and phone numbers has been permanently discontinued.

Rationale and Existing Credit

The company stated that this decision is part of an ongoing process of evaluating its product strategy, based on how customers utilize the service and their evolving requirements.

Currently, existing Skype phone numbers will remain operational. Furthermore, any existing Skype credit balances can still be utilized, subject to the standard condition of usage at least once within a 180-day period to maintain activity.

This shift represents a strategic move by Microsoft to encourage recurring revenue through subscriptions, rather than one-time purchases.

A Pioneering Communication Platform

Throughout its history, Skype has consistently been at the forefront of internet communication technologies, establishing itself as a key innovator in both voice calling and messaging. Established in 2003 in Luxembourg, Europe, the platform was among the earliest widely adopted consumer-level VoIP (Voice over Internet Protocol) services. It enabled users to conduct free voice calls over the internet, effectively circumventing traditional phone networks and associated long-distance charges.

Over time, Skype expanded its capabilities to include instant messaging, video conferencing, and file transfer – features that have since become standard expectations for modern messaging applications. The company’s ownership has transitioned several times. In 2005, eBay acquired Skype for $4.1 billion, anticipating synergistic benefits that ultimately did not materialize.

Subsequently, in 2009, eBay divested Skype to a private investment group for a valuation of $2.75 billion. Skype then pursued an Initial Public Offering (IPO) in 2010, revealing a substantial user base of 560 million registered users, with 124 million actively using the service monthly. Only a small percentage, 6%, were subscribers to premium services.

Microsoft ultimately acquired Skype in 2011 for $8.5 billion, and the platform has remained a part of Microsoft’s portfolio ever since. Initially, Skype operated on a freemium model, offering free communication between Skype users while generating revenue through charges for calls to traditional mobile and landline numbers.

Additional revenue streams included the sale of local phone numbers, allowing users to make and receive calls as if they were located in a specific country, as well as a dedicated product suite tailored for business clients. However, the communication landscape has evolved, with competitors like WhatsApp and Zoom gaining prominence in messaging and video communication.

Notably, Microsoft itself entered the competitive arena with the launch of Teams in 2016. Eventually, Teams absorbed Skype’s business-oriented features, leading to a gradual decline in Skype’s overall prominence within Microsoft’s broader strategic objectives as a cloud infrastructure provider.

Microsoft has ceased publicly reporting detailed usage statistics for Skype, potentially due to a lack of focused promotion and possibly reflecting less favorable performance metrics. However, during the peak of the 2020 lockdowns, Skype experienced a significant surge in usage.

In March 2020, Microsoft disclosed that Skype reached 40 million daily active users, representing a 70% increase month-over-month. This suggests a typical daily user base of approximately 23.5 million prior to the pandemic. The company also reported 100 million monthly active users at that time.

Currently, the precise number of active Skype users remains undisclosed, with a Microsoft spokesperson indicating no plans to release updated figures. Nevertheless, a recent blog post announcing the integration of the Bing search engine into Skype revealed that “over 36 million individuals utilize Skype daily to connect via calls and chats internationally.”

Therefore, the recent changes impacting Skype’s phone functionality likely affect tens of millions of users who relied on this specific feature. While contemporary messaging apps like WhatsApp do not offer comparable functionality, Zoom provides a business-focused alternative called Phone.

Despite the recent changes, Skype’s website continues to advertise both Skype Credit and Skype Numbers. Users accessing Skype through a web browser may still encounter prompts to purchase credit, although completing the transaction is currently prevented.

A Microsoft spokesperson confirmed that the sale of new Skype Numbers and Skype Credit has been permanently discontinued. They acknowledged that some users may still see the purchase interface, but payment attempts will be unsuccessful. The company is actively working to resolve this display issue and implement the necessary updates.