VoIP Watch suggests that the success of Skype means there is trouble ahead for telcos (isn't there always, eh). That is true, although it doesn't have to be perceived as "trouble" but as another catalyst in an ever-changing industry, especially since there is activity enough within the industry to suggest that they are not being totally complacent about VoIP. I would prefer for everyone to come out a winner rather than have one industry suffer at the hands of another, so I am hoping that VoIP startups like Skype will spur the big old companies to innovate.
I agree that VoIP will push broadband adoption, especially since VoIP is one application that bridges the divide between the PC and the phone and, perhaps more so for cable, the television. I don't agree that it will cut mobile phone use, unless Andy is referring to VoIP on mobiles, because the mobile still has an advantage in terms of its, er, mobility. This is why even for people with fixed landlines, the mobile can become the only number they want to use. Also, the mobile commands a unique level of intimacy from users, but that's another story. And it is true that long-distance calls will drop, but this is not exclusively because of VoIP. Telcos have been facing this problem from the likes of Telewest and One.Tel (my provider) for a long time. SkypeOut is no different from One.Tel (or the billion free minutes a month that Orange gives me).
Skype recently passed the 100 million download mark, which is fantastic, but must be taken with a pinch of salt. First of all, 100 million downloads does not mean 100 million users; let alone 100 million regular users, nor users willing to pay. In mid-March, Skype seemed to have 30 million users, which is still a nice number and up 50% from December 2004. So the market is far from cornered. Even if Skype had 100 million or 200 million actual users, this does not mean that the market is cornered - look at how successful MSN, AOL and Yahoo messengers are despite the original large market share of (AOL's) ICQ. Although when Skype reaches 100 million users, despite its lack of pretty fonts, cute bouncy gifs and the like, it will be time for AOL/Yahoo/MSN to take some serious action. Incidentally, of MSN's 150+ million Messenger users, 30 million use the video chat feature each month (i.e. "regular" users, not just downloads).
As well as asking what are the telcos going to do about VoIP, we need to ask what are the Messengers doing. I don't want to engage in an analysis of how good or bad Skype is, but in my personal experience of calling India, Japan and the US, MSN Messenger works just as well as Skype. The audio quality is not as good, but there is less lag. And regardless of quality, surely a big barrier to Skype adoption is the perception by most users that their Messenger can do the same thing. As I just mentioned, 30 million use video chat monthly, so even more must use the audio chat. Ultimately, your average user will not have two Messenger applications (one for voice, one for text chat), so either he will drop Skype to use MSN's audio chat, or drop MSN to use Skype's text chat. At the moment it is easy to dismiss the chances of the latter event happening, but the big three IM operators are being surprisingly complacent about it nonetheless. I am not sure that, as Skype Journal claims, it is too late for the big three, but the general point remains - why play a game of trying to judge the latest possible moment to react, when instead you can offer a good VoIP service with your Messenger now.
There are some areas where Skype et al are pretty nifty. Unlike Messengers, VoIP is good for travellers who want to avoid hotel phone bills and call real telephone numbers (not just PC buddies). Unlike Messenger, VoIP can handle business telephony. Unlike traditional telephony (well, without being a bit clunky), VoIP can be integrated with other PC applications or home networks.
In general though, and especially when the Messenger companies wake up, the battleground should be pretty even. My money is for most users to prefer Messenger+VoIP to Skype+IM_features, but any Messenger company or telco that discounts Skype will suffer a rude awakening.
Update: This kind of behaviour, however, is moronic, narrow-minded and short-sighted. Techdirt explains why. It may buy the operators a few months of time, but it certainly will not stop Skype.
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