Telcos must make VoIP “sexy” to compete, claims Skype co-founder

Voice over IP (VoIP) technology will boom across the region, but telcos must look at providing “sexy” offerings to compete, according to Skype software's co-founder Morten Lund.

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By  Matthew Wade Published  March 1, 2005

Voice over IP (VoIP) technology will boom across the region, but telcos will need to provide “sexy” offerings to compete, according to Skype software's co-founder Morten Lund. In Dubai to discuss several forthcoming IT projects with investors, Lund found the time to tell itp.net how he believes VoIP will affect Middle East phone and PC communications. Telecommunications providers in the region have been relatively slow to embrace the concept of VoIP as an end user service, often seeing it as a challenge rather than an opportunity. However as Lund sees it, it can help them increase internet penetration in the region and thus boost net revenues. “They can make the money from the internet connection,” he claimed. “The infrastructure is already in place. I was in Romania using a dial-up line to call a partner in Sydney and the line was clear. Skype software only takes nine kilobytes of bandwidth for the voice connection, so if you are not using the line for anything else you can easily talk at that rate. But telcos can make more money from broadband and additional services.” Lund went on to offer telcos a word of warning. While he claimed that every broadband provider will have their own internet telephony offering in the future, they need to concentrate on offering what he calls a “sexy” service. “Having a mocked up VoIP program cut and pasted overnight by three guys just doesn’t work,” he added. “You want to have something with a big user base and service fees. That is where Skype has the potential. It is the fastest growing software in the world ever. The numbers are off the curve.” Despite some users viewing VoIP as a new technology, Lund detailed how it is already being used the world over: “What you have now in your pocket, the mobile, this is already VoIP. The biggest VoIP carriers in the world are the mobile GSM networks. A landline that uses a GSM structure to call another part of the globe is VoIP. It is simply packets of data.” “Internet telephony software such as Skype changes the whole communications picture,” he added. “Beyond making a local call, people don’t talk because it is too expensive, whereas if you find somebody on Skype you can talk as much as you want because it is an open platform.”

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