Feeds

VoIP is Dead. It's just another feature, now

How Hutch called Skype's bluff

The smart choice: opportunity from uncertainty

Come into my parlour, said the telco to the VoIP operator

So, what's in it for 3?

In this relationship, 3 uses Skype's branding to launch a low-cost tariff that undercuts its rivals, daring them to follow suit. It does so by corralling and taming the VoIP threat - by routing Skype traffic over its own network. (3 uses iSkoot to do the routing.) Calling your tariff a "Skype tariff" is a lot sexier than "Flex", and a lot cheaper to market, since the brand is already very well known.

3 ensures it owns the customer billing relationship, too, and integration proceeds at a pace it can dictate. The benefit for 3 is simply increasing its market share, or "increasing customer loyalty and reducing churn", as executives described it today.

Nevertheless, 3 probably averts the catastrophe of becoming commoditised, where it might simply be the nameless pipe provider, with open SIP providers such as Truphone or AQL owning the billing relationship.

It's not as if Skype becomes the way you make phone calls on the 3 network: you still need the new handset, or an X-Series contract, and with the latter it's severely restricted. The handset itself, while being a fine achievement and a feather in the cap for Qualcomm's BREW team, is not going to steal any style prizes from Sony Ericsson, Samsung or Nokia.

Having a Skypephone pretty much marks you out as a cheapskate.

And I detected a hint at today's launch that Skype is less of a threat to 3 than the press likes to imagine. 3 CEO Kevin Russell said that usage of Skype on the X-Series - it's been live for a year - was "reasonable". In other words, not that great. 3 really has nothing to fear here.

At very little risk, 3 has bought itself a great differentiator - one that marks it out as an agnostic "communications" company, rather than a "media company" as, say, Orange wants to be.

Skype owes everything to Utopian fantasies

The question of how Skype got as far as it did is really for another article. It's worth noting here that Skype owes everything to the utopian fantasies that circulated in the US in the early part of this decade.

You may have heard some of these already: Bloggers and User Generated Content would overturn the mass media; VoIP operators would overturn the evil incumbent telecomms companies. These fantasies came from deep in the can-do American Protestant ethic, exemplified here. Clay Shirky's ingredients are a pint of nostalgic, Wild West-style "barn-raising", a sprinkling of Ayn Rand, and a large dose of wishful thinking.

How different it might have been if the anti-incumbent camp (including Intel and Motorola) had been able to agree on using the same spectrum globally for WiMAX - rather than seven different bands. Some chance: the Wi-Fi crew couldn't even agree on roaming!

And for my money, it would have boiled down to CapEx anyway. Who would splurge $20bn per market on a service where 0.00p is the ultimate market price? Clearwire got lucky - and Google may yet have money to burn - but VoIP is now in its terminal stages of becoming another incumbent feature.

As for Skype, with no network, and no prospects of capital investment - licensing its brand is about all it has left to do.

Welcome to Telco 3.0 - the incumbents' revenge. ®

Mobile application security vulnerability report

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
Microsoft unsheathes cheap Android-killer: Behold, the Lumia 530
Say it with us: I'm King of the Landfill-ill-ill-ill
All those new '5G standards'? Here's the science they rely on
Radio professor tells us how wireless will get faster in the real world
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
Oh girl, you jus' didn't: Level 3 slaps Verizon in Netflix throttle blowup
Just hook us up to more 10Gbps ports, backbone biz yells in tit-for-tat spat
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.