Skype, the internet phone company, is to introduce its first monthly package offering unlimited overseas calls.

From today, customers will be able to make unlimited calls to landlines in 34 countries - including most of Europe, as well as Australia, Canada, Singapore, and China for £6.95 a month.

For certain countries, including Canada, China, Hong Kong and Singapore, the package will also extend to calls made to mobile phones, Don Albert, vice president and general manager for Skype in North America, said.

The new plans, which are similar to those offered by Vonage, another internet telephony provider, mark an effort by Skype to compete with traditional telecoms companies, many of which are now offering 'unlimited call' plans to attract customers.

Skype, which has more than 220 million registered users, offers free software which allows people to make calls via the internet by attaching a special headset or a microphone to their computer.

The company has always offered free calls between Skype users, but has charged for calls made to regular landlines on a per minute basis as part of a service called 'Skype Out'. Calls to Australian landlines from the UK, for instance, cost 1.2p a minute, while to call mobiles costs 12p a minute.

Analysts said that Skype, which was bought by eBay, the online auction house, for $2.6 billion in 2005, was wise to be embracing flat rate monthly rates, which were becoming the norm for phone companies, but said it would struggle to compete with providers who could offer internet, phone, TV, and mobile services rolled into one - so-called 'quad play' packages.

"People aren't just buying 'cheap minutes' anymore," Steve Blood, a voice of internet protocol (VOIP) analyst at Gartner, said. "For consumers it's all about triple and quad play, and Skype is going to have to work out how it fits into that new landscape. You can offer unlimited calls for $10 a month, but that's not going to be able to compete with the bigger packages which incorporate TV and mobile."

John Donahue, the new chief executive of eBay, indicated last week that his company may consider selling Skype if it did not integrate successfully with eBay's other services, which include the online payment service PayPal.

In October, EBay took a $1.4 billion charge in relation to Skype, for which it admitted it had overpaid, and said it was "still figuring out" how to grow revenues at the service, which brings in about $400 million in revenue a year.

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