"all calls will go to zero" - VoIP from Skype & others

Ian Fogg | September 14, 2005, 05:14 PM

"...we believe that all calls are going to zero. Meaning that, if I had a service where you’d have to pay for every email that you sent, and I was going to charge you more if the person you were sending an email to lived farther away, you’d think I was crazy." SIPphone Inc. CEO Michael Robertson

Just to be clear. I think Skype and other VoIP providers will threaten existing telecoms players in usage of minutes, if not in replacing lines (yet). One of the fallacies in the telecoms industry appears to be the thinking that everyone needs five nine's of reliability for every telephone line and number. Mobile phones and the Internet have both altered perceptions and expectations. As long as consumers have one reliable line, they'll put up with a lot for free/low prices or for convenience/mobility.

My post on Skype/Ebay appears to have been widely misconstrued. Especially this section:

"Telecoms firms may breath a sigh of relief that this deal is final confirmation that Skype is not a telephony business and therefore not a threat. The thinking would go as follows: the Ebay acquisition will deflect Skype from a straight voice communication and telephony play. Skype's roadmap focus will change to value added features that support Ebay's model rather than a feature set evolution that impinges on traditional telephony."

Skype is not an *exclusively* telephony business(1), but telecoms providers would be naive and foolish not to consider the numerous threats from non-traditional communications startups serious.

The key points are further sentences in my original post:

"That would be a risky bet for traditional telecoms firms to make."

and:

"Ebay has the scale to accelerate Skype's development roadmap towards auction-related features without damaging telephony feature plans. Ebay is a very profitable company..."

Jupiter clients should read this report on trends in communication, and ask us on inquiry for the latest European consumer survey data on this area.

1. At this stage Skype is barely a business... but that's a different topic.