"The encryption with Skype telephone software creates grave difficulties for us," he told Reuters.
"We cannot decipher it. That is why we are talking about source telecommunication surveillance, i.e. getting to the source before encryption or after it has been decrypted."
Ziercke added that he does not expect Skype to hand over encryption keys or take any action that would harm it as a business, but that there remains a need for police to examine hard drives and break encryption.
Germany has tough laws on the searching of personal data passed after World War 2.