(A cross posting from unreasonablemen.net)
A couple of posts today (Om Malik and a follow up on Skype Journal) discuss a rumoured Skype killing application that is allegedly being planned for. It seems that some of the Telco heavyweights want to build a VoIP based P2P calling service in order to stunt the success of Skype. Those providers in the consortium won’t charge interconnection (on net) calls, but if you call another carrier’s number (and I’d hazard a guess here) or even a POTS number within the providers number pool, you’ll get charged (like Skype out).
It’s a good strategy that has been successful before. The basics are that you enter an adjacent market, tank the revenue pool in that market to such an extent that the incumbent (Skype in this instance) has no resources left to enter your market because it’s fighting for its life in its home market.
Great plan except for a couple of things fella’s.
Firstly Skype’s disrupting you!, secondly you can’t tank what is already free, and thirdly Skype is already in your market (the oops too late moment!).
Apart from the problems with the strategy, I see a bunch of implementation issues with this the approach
- Can these Telco’s work together
- Can they get a value proposition that isn’t “old Telco” going at the same time as “Telco 2.0” – BT is a strong advocate of the “Protect and Grow legacy revenues”. How will this fly?
- Can they suffer the cultural change of not charging for calling?
- Can they physically build it
- Who will buy it? – only ray of hope is that they have financial security that Vonage etal don’t. They have a long way to go here. Skype’s adding 360 000 subscribers a day. That’s growth no Telco except China or India has dealt with ever.
- Can they sell it? Big step change for a sales teams
Thoughts on this anyone? Smacks of desperation to me.