In the second deal of its kind in a week, VoIP maverick Skype joined forces Monday with European Wi-Fi hotspot provider The Cloud to expand its network of places like airports and cafes where customers can make cheap, wireless phone calls over the Internet.

As part of the Skype Zones service, Skype’s estimated 45 million subscribers will now be able to use The Cloud’s 6,000 Wi-Fi hotspots across Europe to make unlimited calls on laptops, PDAs, and other VoIP-enabled devices for €6.18 ($7.46) a month.

The latest deal comes about a week after Skype’s July 12 announcement with Boingo, another Wi-Fi hotspot provider, to extend wireless voice service to Boingo’s 18,000 Wi-Fi hotspots around the world for $7.95 a month (See Wireless Skye With Boingo).

$7.95 a month

Calls over The Cloud’s networks can be made at airports, hotels, retail outlets, and cafés. As part of Skype’s plan with The Cloud, Skype’s subscribers will automatically be connected to Skype as soon as they turn on their wireless device in one of The Cloud’s hotspots.

Skype’s users typically pay nothing to use the traditional Skype service to make calls to other Skype users and only modest fees to call wireline numbers using Skype.

As a result, Skype Zones’ fee to use The Cloud’s wireless hotspots could be a real threat for cellular carriers, which often charge higher monthly fees for service. It’s true that cellular coverage remains broader than what Skype Zones offers.

But if carriers don’t adapt to the new technology, they face a “real danger,” said Instat Director of Wireless Research Allyn Hall.

The Cloud CEO George Polk said that the company’s network was designed from the ground up to be able to support new applications like Skype Zones.

“We believe that the mobility offered by Skype Zones has the power to revolutionize modern communications,” said Skype CEO and Founder Niklas Zennstrom.

Slipping Margins

Making VoIP calls a standard for Wi-Fi hotspots is a scary thought for carriers whose margins on voice have been slipping as phone companies have been forced to adapt to the IP era to survive. VoIP is starting to enter the mainstream, with consultancy firm Adventis predicting that worldwide consumer VoIP revenue will reach between $8 billion and $15 billion by 2008.

VoIP is starting to enter the mainstream, with consultancy firm Adventis predicting that worldwide consumer VoIP revenue will reach between $8 billion and $15 billion by 2008.

At the same time, phone companies have been leaning on their wireless arms to boost slumping sales. The telcos’ sticky situation makes the marriage between VoIP and wireless a potentially threatening alliance that could gnaw away at the wireless business, one of the industry’s few bright spots.

The next stage of mobile VoIP is likely cause the carriers even greater concern as a growing number of truly mobile devices start to run over Wi-Fi. Users are beginning to move beyond dialing up VoIP on their laptops at local hotspots and are turning to cell phone-style devices to make Voice over Wi-Fi (VoWi-Fi) calls.

Last year, Skype launched its free software for Wi-Fi-enabled pocket PCs around the same time that companies like Net2Phone began shipping a consumer-friendly Wi-Fi handset. In January, VoIP provider Vonage partnered with UTStarcom on a Wi-Fi handset.

launched its free software for Wi-Fi-enabled pocket PCs around the same time that companies like Net2Phone began shipping a consumer-friendly Wi-Fi handset. In January, VoIP provider Vonage partnered with UTStarcom on a Wi-Fi handset.

But cellular’s future is not all bleak. Mr. Hall called the union of VoIP and wireless a “double-edged sword.” Carriers could have a real opportunity to capitalize on the new technology. But they must adapt to stay in the game, he said.

Several U.K. and Swedish wireless carriers like O2, British Telecom, and Vodaphone, have partnered with The Cloud to resell and re-brand service. Because The Cloud is a relatively smaller provider, there is less concern that the service will cannibalize a carrier’s wireless service.

U.K.

And for the time being,cellular still has the advantage of claiming far greater wide-area networks than Wi-Fi can currently reach. However, that wide-area lead could narrow with as next-generation Wi-Fi and other wireless technologies like WiMAX emerge.

Cellular Mix

There is no doubt that some mix of cellular and Wi-Fi will figure in the landscape of a VoWi-Fi future. Analysts say that Wi-Fi will likely take over within buildings. Meanwhile, cellular will offer, for the time being, the wide-area networks. That means that one device will have to be able to shift between cellular networks and Wi-Fi networks.

Device makers like South Korea’s LG are already creating dual cellular/Wi-Fi devices that seamlessly switch gears. At the same time that Boingo and Skype announced their union, startup Kineto Wireless detailed a new phone made to exploit cellular/Wi-Fi convergence.

South Korea

Analysts say that because of cellular’s leg up in the wireless market and its longtime roots in traditional telecom, dual cellular/Wi-Fi phones will likely offer the best option in the shortest time frame, bridging the divide.

The technology is immature and the handsets are expensive, but Hewlett-Packard has already released a handset that can switch between cellular and Wi-Fi. Semiconductor companies like Texas Instruments, Agere Systems, and Broadcom are increasing their investments in the dual cellular/Wi-Fi chipset markets.