Pocket PC users who were expecting to use Skype Technologies' SkypeOut service to make telephone calls via the internet may find themselves without a dial-tone. Skype introduced version 1.0 of its internet telephony application for Pocket PCs last week, but this version – the first non-beta release of the software - does not work well on all Pocket PCs, users report.

The SkypeOut service, introduced in July, is part of the Skype application that lets users make calls to regular phone numbers at competitive rates. The calls are carried over the internet using a peer-to-peer system, only hitting the public telephone system for the final mile prior to reaching the call's destination.

SkypeOut does not work properly on HP iPAQ handhelds. Users in a forum on the Skype website report that the person they call only hears a buzzing noise. Dell Axim users are reporting the same issue.

Skype is aware of a problem with Skype for Pocket PC and some iPAQs, a company spokesperson said Friday. "We are currently fine-tuning the software to rectify the problem. We hope to have it resolved by next week," says the spokesperson.

In addition to the paid SkypeOut service, Skype allows free, unlimited calls over an internet connection to other Skype users, as well as conference calls with up to five users and instant messaging. Skype now offers final versions of its client for Windows and Pocket PC users; beta versions are currently available for Mac OS X and Linux.

The beta test version of Skype for Pocket PC was first released in April. Version 1.0 of the software requires Microsoft's Windows Mobile 2003 for Pocket PC operating system, Wi-Fi wireless networking and a 400MHz processor. Users who connect to the internet using GPRS (General Packet Radio Service) will be able to use Skype for instant messaging, but not for making calls, according to Skype.

Skype has been in the spotlight recently and has been described as a disruptive force in the traditional telecommunications industry. The company was founded by Niklas Zennstr"m, also Skype's CEO, and Janus Friis, who also launched Kazaa, the popular file-swapping software. As with Kazaa, the telephony software runs on a decentralised peer-to-peer network.