Telepocalypse

Winner takes all

Andy and Om think that Skype’s American “voice really is now free” marketing pitch has gobbed in Vonage’s IPO champagne. I tend to concur.

I also think Skype has only done half the job, largely as a result of the (necessary) constraints of using the PC as their “retail outlet”, rather than traditional phones. Hardly anyone has a SkypeIn number in the grand scheme of things, and on-net SkypeOut to SkypeIn is trivial. The winner could be whoever captures a massive on-net traffic and avoids paying termination fees to anyone else. There’s an audacious scorched-earth play still to be done. Suppose telephony revenue comes from user attention and transactions, mostly bridging B2C/C2B, and not from bit haulage. How much does it cost to “give away” landline telephony service in exchange for an identity and billing relationship? What’s the size of the prize in effectively owning all 800 and 900 number traffic? How much does it cost to become de facto owner of the residential US telephony market?

I even know how you could do it and who can do it. Sadly, I can’t say any more :) It’s a long shot, and by no means pre-destined. But if the “Oh f*ck where did that come from?” happens, you will probably want to snatch some stills from Independence Day and War of the Worlds as the artwork for your next telco investor relations meetup.