International Long Distance Growth Slumps, While Skype Soars

Telegeography has an interesting report, with the accompanying bar chart (click to see a larger version of the graphic), showing recent trends in the annual growth of international long distance (ILD) service versus Skype.  Keep in mind that these are growth rates, and not actual growth, or volume of traffic.  International long distance services continue to grow, but at a much slower rate.  As the graphic clearly shows, the crossover point at which Skype's growth exceeded ILD was in 2009.  That was also the year that "smart phone shock" hit South Korea and mobile broadband continued its rapid diffusion worldwide.  Skype and similar services are even more convenient when loaded on a mobile device.  These developments clearly portend a future in which the majority of people will prefer VOIP services like Skype for most of their voice communication.  One of my friends who works in the communications field just wrote me that he's been happily using Skype for seven years now.  Of course, you can't beat the cost of Skype-to-Skype calls!

More on the Skype Outage and its Implications

Like millions of others around the world, I experienced the disappearance (see the previous post) of my normally dependable Skype service.  It was out of order all day yesterday (December 23), but by this morning I was able to log on normally.

The media are full of stories about the Skype outage.  As The New York Times "Bits" column noted, Skype will struggle to restore not only its service, but its reputation.  Skype has announced that its problem was with "supernodes," computers among its network of 124 million users that serve as phone directories and help connect calls.  For unknown reasons, they were taken off line.  Although unknown, Skype did know and announce, according to the BBC, that the fault had been caused by a "software issue" on critical parts of its network.

Skype has announced plans to compensate users for the outage, but the long term impact of this event will be on the dependability of Skype service, especially for business users.  I'd be interested in comments from other Skype users here in Korea about how this event affected them.

Skype Issues and the Future of the Internet

This morning at 7:00 A.M. Korea time I was ready to have a pre-scheduled Skype video conference with a colleague in the United States.  The first time I dialed and failed to connect to Skype, I thought it might have been a problem with my notebook computer or with the local area network or router in my house.  After re-booting several times, I could still not connect to Skype, so I placed the call via my mobile phone to my colleague's mobile number and we had our conversation, without Skype and without video.
This all reminded me of Jonathan Zittrain's book, The Future of the Internet and How to Stop It.  I found that this book has been published on the web, with an associated site and blog.   Very interesting, and in light of my experience today, worth thinking about.  Some of you may find this site useful.

SK Telecom Still Doesn't Get It: Smartphones and VOIP Services

It appears that the leadership of SK Telecom, South Korea's leading mobile service provider, have not yet comprehended what is happening to the mobile communications market here, and the implications for their business, both medium and long term.  As noted in the Joongang Daily, beginning next month SK Telecom will start charging customers for voice services on a per-second basis, rather than in 10-second increments.  This will make Korea the fifth country to have such a charging system and will save SK Telecom users an estimated $14.5 million every month.  However, at the same time SK Telecom announced that it would continue to block use of VOIP services on its smartphones!
What is even more remarkable than the announcement as reported in the Korea Herald,  is the company's reasoning that allowing its smartphone subscribers access to cheap internet calls using services like Skype will "deal a blow to its revenue."
One probable result of SK Telecom's policy, if indeed they stick with it, will be an increasing number of its customers who drop SK Telecom's service in favor of Korea Telecom.   That's what I did late last November and I haven't had a single regret.  Skype, by the way, was one of the first applications I loaded on my iPhone 3GS and it works great!
The leadership of Korea Telecom seems to have a better grasp of the revolutionary changes underway in mobile communications and greeted the SK announcement by saying that it would continue to focus on reducing mobile internet charges rather than on calling tariffs.  KT is also moving broadly to offer useful content and applications, which will no doubt generate handsome revenues.  SK Telecom would be wise to do the same, rather than cling to dwindling voice revenues as a source of future revenue.

KT to Allow Free Internet Phone Calls

As reported in the Korea Herald today, Korea Telecom announced that it will allow free internet phone calls from its mobile handsets. KT said it will introduce a plan which enables both traditional cell phone services and Wi-Fi connections for free internet phone calls. According to a statement, the company sees wireless internet as a growth engine for the future. Telecom companies in Korea have been reluctant to promote internet phone calls for fear that they would cut into revenues. Indeed, KT estimates that the move could initially slash its revenues. It expects a 35 percent reduction in fees for cell phone calls and an 88 percent drop in data transaction fees. However, the new service will be limited to three designated smartphone models.