The Economist uses EBay’s acquisition of Skype as a jumping off point to discuss a number of issues, including the vulnerability of traditional telecoms pricing models to VoIP. According to the Economist, Niklas Zennstrom’s vision for Skype is "to become the world’s biggest and best platform for all communications—text, voice or video—from any internet-connected device, whether a computer or a mobile phone. So it is the fact that his ambition is not nearly as ridiculous as it sounds that should make incumbent telecoms firms everywhere break out in a cold sweat."
It’s a great article. They position the Skype phenomenon as a destruction of old pricing models, rather than an old industry, and go on to talk about which of the incumbents are most vulnerable to that shift in pricing model.
It is thus altogether wrong to call this phenomenon the end, or death, of telephony. “Calling it the death of telephony suggests people aren’t going to make calls, but they are,” says Sam Paltridge, a telecoms guru at the OECD. “It’s just the death of the traditional pricing models.” In short, all this is great news for consumers and awful news for telecoms operators. “VOIP will destroy voice revenues faster than most analysts’ models predict,” says Cyrus Mewawalla, an analyst at Westhall Capital. “Voice will very rapidly cease to become a major revenue generator for all telecoms operators, fixed and mobile.”
Incumbents that are most dependent on voice, are naturally, the ones most vulnerable (see the chart below). It’s no wonder, for instance, that the Chinese are so eager to block Skype. From where I sit, in Canada, it’s also clear that our incumbent, Bell Canada, is one of the better managed telco’s, globally, with a clear quad-play strategy already in progress.