Users spurn traditional calls for Skype

Reuters

Tue Jan 19, 2010 12:59pm EST

http://www.reuters.com/article/idUSTRE60I47B20100119?type=technologyNews


FRANKFURT (Reuters) - Users wanting to call home form abroad are 
increasingly turning to Skype's Internet telephony service to the detriment 
of international carriers, new data showed.

"Skype is now the largest provider of cross border communications in the 
world, by far," said Stephan Beckert, analyst at research firm 
TeleGeography on Tuesday.

Skype's technology allows consumers to make practically free long-distance 
calls over the Internet on fixed lines. It is mostly used on desktops but 
Skype has made the move into mobile too and it now comes pre-installed on 
some cellphones.

According to the firm's data, over the past 25 years, international call 
volume from telephones have grown at a compounded annual rate of 15 percent.

In the past two years this growth has however slowed to only 8 percent, 
rising from 376 billion minutes in 2008 to an estimated 406 billion minutes 
last year.

By comparison, Skype's on-net international traffic between two Skype users 
grew 51 percent in 2008, and is projected to grow 63 percent in 2009, to 54 
billion minutes.

"The volume of traffic routed via Skype is tremendous," said Beckert.

In general, TeleGeography said, "demand for international voice has been 
remarkably robust, but it's clearly not recession-proof."

Traffic to Mexico, the world's largest calling destination, declined 4 
percent in 2008 for example, and aggregate traffic to Central America 
declined 5 percent, data showed.

Established in 2003 and based in Luxembourg, privately owned Skype has more 
than 520 million registered customers who use the free Web service for 
voice, video or text communication.

But despite its size, its revenue is relatively modest -- at about $551 
million in 2008 -- as the company has had a difficult time getting users to 
pay for its largely free services.

Skype aims to nearly double its annual revenue to $1 billion in two years.

(Reporting by Nicola Leske)


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George Antunes                    Voice (713) 743-3923
Associate Professor               Fax   (713) 743-3927
Political Science                    Internet: antunes at uh dot edu
University of Houston
Houston, TX 77204-3011         

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