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Broadband telephony outfit Skype looks set to become a major threat to Europe's traditional telcos as more and people use the net to make phone calls.

According to research outfit Evalueserve, the European telecoms market is more vulnerable to Voice over Internet Protocol (VoIP) providers because of per minute tariffs and high roaming charges.

With 13m users worldwide and numbers growing by 80,000 a day, Evalueserve reckons Skype could have between 140-245m subscribers by 2008.

It forecasts that incumbents could see revenue fall by as much as 10 per cent because of the surge in demand for internet telephony with profit predicted to slide by at least 22-26 per cent.

Marc Vollenweider, CEO and President of Evalueserve, said: "Skype could be a major step towards a change in the business model of the telecom industry ? a model in which basic voice services are offered free of cost and are subsidised by revenues generated from value-added services.

"Overall, Skype represents a massive discontinuity in the telecommunications industry, driving the convergence of voice and data much faster than originally anticipated." ®

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