The smartphone battle is heating up -again- in Japan.

Realizing that it was clearly lagging in that fast-growing segment -hey, we’re talking 4m units this year in a cell phone saturated market-, au KDDI, Japan’s second biggest mobile carrier, has decided to take a bold move. It entered an alliance with Skype, the peer-to-peer VoIP company.

Because calls between Skype users are free, mobile-phone companies have feared their revenue would decline should they make the service available. For that reason, the Skype app was viewed as verboten until now

Bold enough? At least in the eyes of Tanaka, KDDI’s Senior VP.

No details have been released yet, though. No package pricing in particular.

Skype on WiFi?

It’s only the second time that Skype partners with a cellco. Their first deal was made with US Verizon Wireless.

If you didn’t know, Skype calls are actually not made using the data service there. They’re being done on the voice line. Skype’s press release says KDDI will also do that.

That’s a big no-no for Wifi, sorry folks.

It has to be noted that calls will need to use a bit of data before being re-routed to the voice line. Hope KDDI won’t charge users for that.

Skype to Japan numbers?

The Verizon deal only allows Skype calls to be made while on US soil. And while Skype-to-Skype are free, the Skype-to-cell/landine minutes are charged against the plan. That should be similar with KDDI in Japan. Or will it?

If you read the press release I just mentioned between the lines, you see that

users will be able to make unlimited Skype-to-Skype calls to any Skype user in Japan and around the globe

Yeah, ok, basically what Skype is for, but let’s read on.

KDDI customers with data plans will also be able to [...] call international phone numbers at competitive Skype Out calling rates.

Nice. But, if you didn’t get it, no mention to Skype Out calling rates for phone numbers in Japan. None. Zip.

So, unlike the Verizon deal where the application lets you call mobile and landline numbers, KDDI’s Skype might well force you to exit it for these types of call. Not very practical, isn’t it?

Skype on Android

So, starting this November, Japan’s second biggest carrier should pre-install the Skype application on all its smartphones (pre-register if interested)

The flagship phone will be Sharp’s IS03. Mobile in Japan’s good friend Steve and I had the chance to play with it at the recent CEATEC in Tokyo.

We both found it to be a very solid smartphone. Of notice is the integration of an e-wallet function, a feature existing on many keitais but not on the iPhone, and the faculty to keep an existing KDDI mobile email address, again something SoftBank was not able to provide with the iPhone (oh yeah, it also has a pimp-your-email decorating function -so important for the teenager market here).

We weren’t able to fully test it, but our limited look at au One Market, a carrier-branded Android app store, left a good impression.

The app will also be rolled-out on the less noticeable IS01, but, strangely enough, no news about Sharp’s IS05 that was announced today, nor Toshiba’s IS04.

Skype on keitais?

While KDDI promises to use Android for all its upcoming smartphones, the future roadmap for Skype and KDDI promises to go beyond Google mobile operating system.

Other phones might get an app too, not unlike what Verizon is offering in the US with LG and Samsung. I’d say not before Q2 2011 though.

But, in a time when DoCoMo is rolling out its Android smartphone with full fanfare, IS03 + Skype might very well be a sweet deal for KDDI.

Skype on DoCoMo?

Yeah, what about DoCoMo? Does it have to reply with an VoIP offering?

Right now, the king of carriers is kinda blunt. Skype is simply banned from its Android-powered devices. It’s as simple as that. And, anyway, none of its Android-powered phones is running 2.1 yet, a pre-requisiste for the application.

But rumors are floating that it is negotiating a similar deal than KDDI’s. Skype with DoCoMo might become true by the end of the year, if you’re of the optimist kind.

As for Softbank, it already allows Skype on the iPhone, but no news on any other front from them. At least, they can be satisfied that Ustream, a company they’ve partnered with and invested in, was used by KDDI for its press conference.

My guess is that things are only getting started on the smartphone front. Oh boy, I love that.

We would like to show that we are (competing in the segment) in earnest and with dedication

Tanaka seems to be up for the battle. Let’s rumble.