Skype now the world's largest international voice carrier

Stuart Corner
Wednesday, 25 March 2009 10:08

IT Industry - Market

In less than five years since its launch Skype has grown to become the world's largest carrier of international voice telephone traffic with Skype-to Skype minutes alone accounting for eight percent of the total.

According to figures from TeleGeography, which tracks international telecommunications traffic statistics, Skype-to-Skype calling totalled an estimated 33 billion minutes in 2008, up from 22 billion in 2007.

This figure does not include Skype-Out or Skype-In minutes between Skype and other networks. This traffic is included in VoIP which TeleGeography estimates amounted to 96 billion minutes, some 23 percent of the total. Traditional circuit switched phone calls accounted for the remaining 69 percent. Total international voice traffic in 2008 was an estimated 417 billion minutes

TeleGeography says that retail prices for intentional telephone calls continue to fall, even to such historically low-cost destinations as US fixed lines, making it ever harder for carriers to identify and exploit profitable niches. "International voice is developing into something of a 'loss leader'. A growing number of service providers are offering flat-rate or heavily discounted international calling services in order to draw subscribers to their bundled fixed-line or mobile-phone service," according to the report.

It adds: "These discounted calling plans have generated a surprisingly strong response from consumers. However, they also suggest that the role of international long distance in service providers' product portfolio is changing: for a growing number of service providers, international voice is no longer a core product or source of revenues in its own right."

TeleGeography says that the world average price of an international phone call has fallen more than 80 percent over the past 15 years, and declined a further seven percent in 2007. This fall in price has been more than compensated for by growth in traffic volumes: "Despite the steady erosion of prices, aggregate retail revenues from international traffic nudged upwards, from $74 billion in 2006 to $78 billion in 2007."