Skype Growth Eats Into International Calls

International phone traffic is on the slide and one research company reckons that a likely cause is the effect of VoIP service Skype.

According to TeleGeography, International call traffic rose 4 percent in 2010 to 413 billion minutes, a fall from the 5 percent

The company blames the recession for hitting demand but the rise of VoIP appears at last to be affecting the international phone call market, with market leader Skype set to add 45 billion call minutes to its share during 2010 for direct calls between its customers.

Recession or not, Skype appears to be changing the nature of the whole international call market permanently.

"Demand for international communications remains strong. But ever more people are discovering that they can communicate without the services of a telco," commented TeleGeography analyst Stephan Beckert.

What this means is that consumers will be paying less for fixed phone calls in future, telecoms companies will see profits level off and Skype will continue to grow. Ironically, it's not clear that any of this will do Skype much good unless a way of charging for something is found to balance out the company's investment.

The company is close to an IPO with some analysts seeing its future as a provider of services to third-party tech companies that value its technology rather than through direct call fees from users.

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