Disruptive Telephony

Today's buzz in the VoIP space is certainly Skype's announcement of new "unlimited" subscription plans. No contracts. No connection fees. No per-minute fees. Just a single flat, monthly fee.

The Global Difference

Now on the one hand, this isn't really new to those of us here in North America. We had an "unlimited" plan for all of NA that was good up until several months back when Skype dropped the plan and required everyone to move onto "Skype Pro". However, the big difference this time around is simple:

The unlimited plan is global!

Well, at least "global" in the sense that the 34 countries to which the plan pertains are indeed spread out all around the globe:

Regardless, it's an impressive list and, as Skype's news release reminds us, means you have "unlimited" calling to about a third of the world's population. (This statistic is, of course, hugely helped by the fact that the plan includes China!) So now with your PC, or 3 Skypephone over in Europe, you can now make an "unlimited" number of calls to regular old PSTN phone numbers in those countries.

Goodbye international calling plans!

Given that here in the USA, we've seen most all of the major mobile carriers move to "unlimited" calling plans that allow you to call anywhere in the US, this is definitely in keeping with those pricing plans. Except, of course, it's global.

Other Goodies

Beyond just the unlimited calling, Skype is also offering other "goodies" in the plan. As with most things related to Skype, the Skype Journal team has the best coverage of the announcements and lists these benefits:

• Users can upgrade temporarily -- for instance, a Canadian or American traveling for two weeks to Europe can have an Unlimited World plan for the one month during which the travel occurs.
• All plans include free call transfer (SkypeIn or Skype to SkypeOut) to numbers within the destination countries included in the user's plan.
• All plans include a 50% discount for a SkypeIn number. (or multiple SkypeIn numbers on some plans)
• All plans include voice mail
• All plans include Skype To Go

Jim Courtney's article goes into further detail on all of this and is definitely worth a read.

Redefining "Unlimited"

Of course, I had to laugh at Skype joining into the game played by all the major carriers here in NA known as "redefining the word 'unlimited'". Several of the carriers here in the USA and also in Canada have at various times trumpeted their "unlimited" data plans... which of course were "unlimited" only according to the carrier's definition of unlimited... really something more like:

"Unlimited" = "unlimited calling up to a certain point that our finance folks have determined you start to impact our profit"

The linguistic pedant in me cringes every time I see a "unlimited" plan and I had the same knee-jerk reaction when seeing Skype's announcement. You can see it clearly on their Fair Usage page or in this image with the asterisks net to "unlimited calls":

Now, in fairness to Skype, 10,000 minutes per month is a whopping long time! Basically that nets out to 5 to 5.5 hours on the phone every single day of the month. If you are spending that much time on the phone EVERY day (outside of your work), well... I'd just be amazed. (I suppose there might be long-distance relationships that might come close, but still!) I would expect Skype's major reason for doing this would be to strain out business users that might seek to use Skype for large blocks of calling. I'm sure Skype also does have very real costs that they incur for PSTN termination (although I'm sure they get good rates).

Other Views

Over on VoIP Watch, Andy Abramson notes that an advantage for Skype is that this moves their revenue stream to a more predictable monthly basis (rather than having the cash-flow variability of annual renewals) and also that it allows more flexibility for users to add and delete services.

Mark Evans also had an interesting take today in "The Sexier Story is Growth" noting that the far more interesting point about Skype is their growth:

Consider Skype’s first-quarter results: another 33 million users came on board, boosting the number of registered users to 309 million. Meanwhile, year-over-year revenue climbed 61% to $126-million and Skype-to-Skype minutes rose 30% to 14.2 billion. So, what you’ve got is a high-growth business that will likely have sales of $500-million in 2008.

Indeed that definitely is something to consider. (Jim Courtney also covered the topic here and here.)

Conclusion

In the end, rolling out these new plans is undoubtedly a great move for Skype. With all their Oprah momentum here in the USA and the 3 Skypephone in Europe, they've certainly made some gains. Now they continue disrupting the telecom industry by removing distance from the equation (for the most part). It will be interesting to see over time what this does or does not do to the ranks of subscribers. Regardless, it should be fun to watch as Skype continues to spread.

As for me, the reality is that as more and more friends have moved on to Skype, I honestly have fewer and fewer people outside of family to call on the PSTN. Given that most all the people I call internationally are already on Skype, I may wind up buying the Unlimited US & Canada plan just to be able to call some of those folks out on the PSTN. I mean, at $36/year... or apparently $24/year if you buy before June 1... it's hard to argue against that for "unlimited" calls within the US and Canada. :-)

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