Chris Kranky

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Skype for mobile

Chris KoehnckeChris Koehncke

A friend of mine called me on Skype the other day, he proudly told me he was using the new iPhone Skype client which allowed him to call his Skype buddies.  The sound quality was great using the new SILK wideband audio codec (or at least it was until he suddenly dropped off). So the question is Skype a serious threat to the mobile operator?

image9182On first pass, the answer is no. I have an unlimited mobile plan and thus Skype really isn’t going to save me any money and the hassle of poking around to contact them probably isn’t worth the hassle. I will admit that for international calls this could be a real money saver and I’m sure to do that just as soon as I get a friend in Borneo. Only about 10% of us make an international call each month and only a single digit of us make regular international calls. It’s still a big market, but plenty of competition.

But on another look, Skype and numerous emerging applications are putting the network operator at risk of simply being a commodity, moving bits. It’s not like you or I know if we’re using T-Mobile, Verizon Wireless or AT&T. The operators have tried to invent differences (mostly imaginary) or by having special equipment that only they have. But this will fade with time – IP is IP after all.

I’m not predicting a demise in the business. I do believe the network operators are wasting their energy trying to be in the application business and would be better served to invest in their network capabilities, this is after all their core business. Trying to learn the application space just isn’t going to happen, it’s not in their DNA. The mobile operator could increase their profitability by ridding themselves of these happless projects (and associated personnel) and focus on moving the most amount of bits for the least amount of money.

If Skype or the next generation Vonage want to offer me some sort of specialized telephony application, well great and if I want to opt for plain vanilla service from AT&T, great too. Competition breeds innovation and in the end we are the richer for it.