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It came as no surprise to read this morning (in my cough-syrup induced stupor)
that Telecom is keeping a close eye on Skype.
It's companies like Skype that threaten to turn companies like Telecom into
little more than providers of local-loop and IP services, and that's got to
be a worry for our largest telco.
Skype is in the enviable position of being a top-layer provider who have
the potential to deliver their service through a wide range of lower-level
services such as WiFi, broadband, dial-up, satellite IP, etc.
I strongly suspect that being relegated to the role of a "lower level" provider
would be untenable for a company like Telecom that is so used to calling the
tunes at an end-user level.
But what can Telecom do to prevent the slow but inexorable advances being made
by Skype?
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The simplest way is to just hike latency times on the Jet-stream DSL
network.
Skype users would soon get annoyed at the significant reduction in performance
if this were done and, since most users are probably not too technically literate,
the blame would fall on Skype rather than Telecom.
Indeed, Telecom has always been very careful to promote its entry-level DSL
services as not guaranteeing low latency, perhaps it did this in the full
knowledge that competitors would be offering VOIP services that it might
need to scuttle.
But is Skype really that much of a threat?
According to the story on IDG's site today, many of Telecom's competitors
aren't too worried, considering Skype to offer poorer quality and only
marginal cost-savings over their own services.
But I'm wagering that it's not cost or the last 10% of call quality that's
going to make Skype a real threat.
The real killer benefit that Skype could offer if it got its act together
is the ultimate goal of total number portability.
The problem most telephone users face these days is that when you change phone
providers or shift towns (or even from one side of town to another), you have
to change your phone number.
Likewise, most of us have several phone numbers: our home number, our mobile,
our holiday-home, our work number, etc.
A universal Skype number could easily be routed as and when *you* wanted,
with the ultimate destination being completely transparent to the caller.
If some enterprising telco set up a true mesh of WiFi hotspots around the
country then the next generation of WiFi enabled cellphones could also provide
your home-phone needs and broadband would be just a WiFi card away from your
PC.
Now where would that leave Telecom I wonder?
Well out in the cold, that's where.
So forget about Telstra, Vodafone and any others who claim to be competitors
to Telecom. The *real* competition is Skype and whoever sets up the first
national WiFi network.
Now can you see why Telecom are watching Skype so closely?
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