Error 1603 typically appears when there’s a problem while installing a Microsoft Windows Installer package. The same error also appears if the update process fails while upgrading to the newest available version of Skype.
Microsoft Windows Installer packages normally fail to install when a user tries to complete the installation process in a folder that’s encrypted. The process also fails when the operating system doesn't access the drive that contains the installation folder as the primary drive. It’s possible to avoid these problems by selecting a non-encrypted folder as the installation destination on a primary drive.
If the user’s System account doesn't have access privileges to the installation folder, error 1603 appears. On older Windows operating systems, such as Windows XP, users can avoid error 1603 by granting complete control to the System account. By accessing the Security tab after right-clicking on My Computer, a user can check the box next to the Full Control option to remedy the problem.
To fix error 1603 that appears while installing or updating Skype, a user needs to uninstall the existing Skype version via the Control Panel and manually remove the remaining files. After doing that, he should perform a clean installation of Skype. If that fails, a user can run the repair tool directly from the Support section on the Microsoft website before performing the installation.