Wednesday, September 2, 2009

Skype and Google Voice: The black sheep of the VoIP family

In case you haven't heard, eBay is selling Skype.

Most technology pundits are just going "I told you so" and a glance at the reports of the original, $2.7bn acquisition from 2005 will quickly show that everyone was scratching their heads trying to figure out why an online auction house would want to buy a loss-making VoIP company (Voice-over-Internet-Protocol, for the buzzword-challenged, which basically means a telephone that works over the Internet).

I have very few hopes for Skype in the long run, or for any other VoIP firm for that matter. Looking into my crystal ball, I can tell you that in the distant future (let's say 20 years from now) there will be no such thing as a telephone company, because routing telephone calls over the Internet means routing them over a network you've already paid for, so what exactly would this telephone company be selling? You see, VoIP is one of those unfortunate technologies that will undoubtedly benefit all of its users but not make anybody any money. It's all about using a tiny portion of your Internet connection, which you've already paid for, instead of an additional telephone service - except every telephone company in the world, fixed or mobile, is fighting it tooth and claw because it knows it will make them obsolete, and there's nobody (of any consequence) fighting the other corner. Yet.

Your ISP doesn't really care, since you already pay them for your Internet access - frankly they could do without the hassle of supporting VoIP on top of that. Anyway, these days, half the time your ISP is also your telephone company, so it would rather you still paid them some ridiculous amount per minute to call abroad, thank you very much.

The only money to be had in the VoIP transition is in facilitating calls from VoIP users to traditional phone lines and vice versa, but guess who the gatekeepers are there? Yup, that's right, the telephone companies. If you want to call a traditional phone line from your VoIP phone you have to pay the phone company, and it's no surprise they're not in a hurry to let you do that on the cheap. This is still Skype's one and only business model, and it's unsurprisingly not managed to make it an appealing package.

Is there hope on the horizon? Perhaps, mostly coming from Google and Apple. Pay no attention to the bickering about approving Google Voice for the iPhone, I'm here to tell you Apple would love nothing more than to allow the iPhone to work with Google Voice - except not as a separate app, but as a full-blown replacement for the carrier's voice service. Apple's agreements with AT&T and its other exclusive carriers are running out and it must be looking at the figures that show that it's selling a hell of a lot more iPhone in countries were users have a choice of carrier, and I'm sure their PR guys are tired of fielding constant complaints about the approved carriers' lacklustre service.

Sooner or later Google, or Apple, or both, are going to come out with a device that's going to go around the phone companies. You'll sign up for an unlimited data plan with a carrier (and I predict it'll be Verizon first with its brand spanking new LTE network) and the phone will just route all your calls over that. The phone companies will moan and whine and probably sue, but either of these companies will soon have the clout to make them accept the new world order.

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