The Fall of the Telecoms is Near (and Skype Kicks Ass)

In a surprise move, E-bay has announced last week that it will buy Skype, a kick ass internet telephone (VOIP) company, for $2.6 Billion. This news follows suit of Microsoft, Google and Yahoo! who also recently acquired small firms offering similar telephony technology. This is great news for consumers, but may mark the beginning of the end for tradional fixed line telephone service operators.

Skype just plain kicks ass. Using a microphone/earphone headset, the internet, and Skype software, you can make free calls anwhere in the world to anyone with the same setup. I urge, nay implore, all of you to try Skype out for yourself.

Some of you may remember back in SF when a random 2Pac song would be playing and suddenly the sound of a phone ringing would eminate from my computer speakers. WTF? Oh, yeah, it's just my cousin calling from Cambodia. For free! Normal fixed line call from U.S. to Cambodia : roughly $6 per minute.

The lag time (from being 8,000 miles away) will take a bit getting used to. But you can also use Skype to call any mobile or fixed line for a nominal fee. The price is based on the destination of the call and the quality is quite good. This is where telecoms will be taking a huge hit. Normal pricing of phone calls depends on distance between callers and duration of calls, but with VOIP you can use the internet to call for a fraction of the cost for as long as you like. It is a growing indication that soon fixed line telephones, using the internet, will be free of charge. For more information on the future of telecoms, you can read the Economist's excellent article here.

~ J-Dub