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Skype pushes international phone traffic to a tipping point. IP providers push voice 2.0 to the desktop.
 Honolulu - special to the IIC.
If VoIP providers have their way, the phone in your hand may give way, more or less entirely, to a constellation of applications on your computer desktop. Much promised, it now seems that the age of Voice 2.0 is upon us.
Consumer VoIP competitors have enjoyed relentless growth in telephony traffic worldwide. Skype, the dominant player in this area, but a relatively recent entrant in the phone market, may signal a tipping point for the entire market, says Telegeography, a market research firm in Washington DC studying traffic trends. Telegeography estimates that total international phone traffic was 406 billion minutes in 2009, but Skype by itself carried 54 billion minutes internationally. Skype now accounts for 12% of all international long distance traffic, according to Telegeography research. Skype carried another 50 billion minutes inside national borders.
“Skype is real. It is big and it is growing fast,” says Stephan Beckert, Vice President of Strategy at Telegeography.”[The growth was] around 63% in the last year, and is still accelerating despite the existing large numbers. Skype itself says that around 500 million people have signed up to the service. Opines Mr Beckert: “Perhaps the recent recession has had an impact on cost-conscious consumers.”
The irony – that voice was perceived as a mature market lacking in growth where prices could only go one way – is not lost on the industry. Telegeography admits that some of this growth is clearly coming at the expense of traditional voice traffic and traditional voice providers, the large telcos that have interconnected with each other in the pre-IP environment of circuit switching.
The sentiment of market upheaval should clearly have the established telco players worried: the network investment they have collectively made runs into hundreds of billions of dollars and they now face arguably more agile players that can deliver services through software alone and do it – apparently – far more cheaply. Telco opinion seems mixed, and received wisdom still seems to indicate that voice services, by themselves, are rapidly becoming a loss-leader.
They also make another argument: they alone can deliver the service availability and reliability ultimately required – especially in essential services - through their network infrastructures. Sooner or later, goes this thinking, the scale necessary for communication will force Skype-like players to adopt more established – and expensive - telecom practices. Indisputably, to deliver services at all, Skype and its counterparts throughout the world, needs the existing telecom networks to underpin them. Certainly, the major VoIP providers such as Skype are keen to point out the valuable partnerships they enjoy with the established players.
But at least for now, Skype and its competitors in Vo IP for the mass market can claim astonishing progress for their platforms. “The consumer desktop is clearly a success story for IP communications,’ says Dr Jonathan Rosenberg, Chief Technology Strategist at Skype, and promises much more innovation at the desktop level will be on the way to keep their numbers heading north.
The next frontier
“Where are we going now?” Dr Rosenberg answers his own question by saying he foresees three categories of development in the future. “First, there is video. The second is mobility. Finally, the web. The web is last true frontier for IP communications.”
Video is not a new idea, concedes Dr Rosenberg, and it has had a chequered history in the circuit-switched world. But, he argues, that consumers in a YouTube age are entirely comfortable with video applications. Equally, he says, packages of camera, audio, and PC are now routinely available at low cost, and systems can now deliver high quality and even high definition video services. “
That allows us to deliver experiences that truly makes video a valuable part of communications,” he says. Skype says that on average, 34% of Skype calls utilize video and this will continue to grow and extend to interesting, non-traditional devices. Dr Rosenberg says that Skype video-enabled TV sets are about to be shipped by Far East manufacturers.
For mobile applications, Dr Rosenberg says that a “perfect storm” is developing, stimulated by the diffusion of smartphones into the marketplace. This will be further enhanced by imminent 4G network deployment. The App Store phenomenon is another driver. But most dramatic of all, mobile devices are now being pro-actively teamed with WiFi – to reach a 100% penetration by 2014. “When you put this together, we will finally see the beginnings of mobile voice over IP.”
Dr Rosenberg reserves his most far-reaching predictions for last. “The line between the web and real time communications is fading,“ he says, pointing to the number of social networking applications such as Facebook implementing instant messaging in the browser. Standards from the W3C will mean voice and video applications will be enabled natively together in the browser. “I am certain that tomorrow the web will have a voice,“ he says.”Real time communications will be as much a part of the web experience as browsing is today.”
He also suggests that web applications will not only be a simple click experience, but much more collaborative in nature when real time communications is implemented. Third party applications blended with such applications as Skype will be commonplace, and the browser itself will become an ever more ubiquitous communications medium . “When you put all this together, the web becomes the new frontier for IP based communications,” he predicts.
- Stephen McClelland
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