News Stay informed about the latest enterprise technology news and product updates.

Skype eyes enterprises and mobile voice, threatens telecom revenues

Skype and other VoIP applications are eating into voice revenues, especially by making inroads into enterprises. But the real danger to telecoms will come when Skype and VoIP go mobile.

After years of being consumer-focused, Skype is forming major partnerships that are helping it gain acceptance...

in the enterprise market -- and cutting into already sagging telecom voice revenues.

Wireless voice revenues could be next as Skype and other VoIP providers tackle mobile phones armed with 3G and Wi-Fi connections.

"Skype may be glamorous for the media, but all it is is a cheap way to make phone calls," said Tom Nolle, president of Vorhees, N.J.-based telecommunications consultancy CIMI Corp. Though simple, he said the program, and the many others like it, could prove dangerous to telecoms. "It is creating some indirect pressure on the deployment practices of service providers."

For one, many enterprises have first embraced Skype as a way to cut costly international calls. Skype trunking, where a company pushes some of its IP PBX calls through the Skype network, is becoming more accessible every day.

Sunnyvale, Calif.-based VoSKY, for example, sells an appliance that sits next to the corporate PBX. With the press of a button it can switch any call from the public switched telephone network to the Skype trunk, while end users still use their normal desk phones.

Huntsville, Ala.-based Digium Inc., maker of the popular Asterisk IP PBX software, has taken that concept one step further with a module that ties similar access straight into the PBX itself.

The minutes being trunked are some of the most valuable, Nolle said.

"International rates have been artificially high for a long time," he said. "A lot of Skype-like programs are successful because they bypass international tariffs."

As time passes and more companies defect to VoIP solutions, carriers will be forced to respond by asking governments to cut those tariffs. They will also have to cut their international call rates across the board, Nolle said.

While the threat to voice revenues is obvious, Nolle said it's simply part of the larger trend in declining landline voice revenues. The worse news may be yet to come.

"The real problem is in the wireless area," Nolle said. "The operators are looking at overall voice pricing trends, and they're seeing in general -- whether it's competitive pressures within themselves or competitors like Skype -- their year-over-year voice revenues are dropping significantly."

While telecoms offer a variety of services and have seen strong bandwidth demands from the enterprise, they are not as prepared for when mobile voice revenues begin to slip as Skype and others focus on taking VoIP mobile themselves.

Already, more than a dozen early VoIP companies are trying to stake their claim by letting users make VoIP calls through their 3G connections or through Wi-Fi connections on dual-mode phones.

Today, the market is relatively small for mobile VoIP. In 2007, there were just 7 million mobile VoIP users globally, according to ON World Inc., a San Diego-based consulting firm. But the firm predicts the number will balloon to more than 100 million by 2011.

Already, Skype is looking to stake its claim with a beta mobile client, giving telecoms the same headaches they felt a few years ago when Skype tackled landlines.

"All of these operators are looking to say, what can we do to solve the revenue problem?" Nolle said.

Even if customers stick with their current service providers -- and many likely will -- between the competitive pressures of over-the-top VoIP providers like Skype and the move to unlimited calling plans, telecoms will continue to see a sharp decline in per-minute revenue.

"The operators are going through an agonizing self-evaluation process right now," Nolle said. "They were having a tough time even before the financial crisis. The consumer is going to be under a lot more pressure, and discretionary services like video content may be harder to sell."

Dig Deeper on Telecom Resources

PRO+

Content

Find more PRO+ content and other member only offers, here.

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

SearchNetworking

SearchDataCenter

SearchCloudComputing

SearchCloudProvider

Close