Will Skype be a telecom deflator?

There has been a lot of buzz around Skype, a peer-to-peer voice client that comes the courtsey of Kazaa gang. Almost 1.6 million beta copies have been downloaded. Who knows if it is a viable business model, but one thing is quite clear – it will act as a major deflationary force on the voice revenues for established telecom companies. Or at least that is the view of Allan Tumolillo, Chief Operating Officer, Probe Financial Associates. Alan is an old telecom watcher and one of the more sober people in the business of teleco-gazing. “Voice is the primary revenue generator of the entire telecom industry,” he says. “Subscribers are migrating to mobile, cable, and niche carriers.” P2P service has the potential to further drain the landline voice market. Young users already accustomed to instant messaging are a natural audience for P2P telephony, Skype integrates IM in its offering. Landline carriers need a market response to Skype and others starting down the P2P path, and they need one soon.