Feeds

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

How Hutch called Skype's bluff

Next gen security for virtualised datacentres

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. ®

Boost IT visibility and business value

More from The Register

next story
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
PwC says US biz lagging in Internet of Things
Grass is greener in Asia, say the sensors
Ofcom sees RISE OF THE MACHINE-to-machine cell comms
Study spots 9% growth in IoT m2m mobile data connections
O2 vs Vodafone: Mobe firms grab for GCHQ, gov.uk security badge
No, the spooks love US best, say rival firms
Ancient pager tech SMS: It works, it's fab, but wow, get a load of that incoming SPAM
Networks' main issue: they don't know how it works, says expert
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.