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The breakeven for telecom investments is measured in decades. With the explosion of usage and connections this number may fall slightly, assuming the pricing model remains more or less the same. i.e return per port remains where it is today. If the tarrif structure is damaged by the Skypes of the world, who afterall piggyback on teleco infrastructure, without investing on the pipes, who will provide the pipes and what is their revenue model ? My fear is that if all traffic (voice, data, video et al) is digital and rate disruptive, we will land up with a single monopoly that provides pipes.
Posted by ShivRajesh,
I had subscribed to your blog. But I have not been recieving the feed for quite some days. Can you check if its working correctly for all users?
Thanks.
Posted by Shivani ChandnaShiv is onto something here. Who will pay for this invisible network that provides all these services for free? Who will ensure that this network is there? Who will fix it when it breaks? Who will regulate it?
Skype supporters will tell you that these questions aren't important. They'll tell you that business models don't matter and that profitability just isn't relevant.
Let me tell you now that this is smoke and mirrors. The cost of the network is an externality in the Skype model -- someone else pays for it. Others will tell you that the network is free or that it ought to be free.
Skype-induced groupthink is dangerous, because off-the-book externalities have a nasty way of coming back in ugly forms. Remember the tragedy of the commons. As we decry the demise of the traditional telco, we forget the cross-subsidies that keep the cost of Internet access low.
Pay for it now...or pay for it later. The network isn't free. And despite what Tom Friedman says, communications aren't free. Someone pays his paycheck, and someone is paying more than $2.6 billion for Skype.
IP telephony has been an inevitabilty for quite some time. What we as a society need to figure out is how we expect to pay for the underlying network.
If incumbent telcos are already a thing of the past, then we need to quickly work to figure out a way to replicate their operations without paying a dime for them. We need to find hundreds of thousands of workers willing to volunteer their time to keep the network operational. We will need to find engineers willing to handle capacity planning tasks during nights and weekends. We'll undertake a massive campaign to collect donations for maintenance and capital improvements. And we need to mobilize millions to build these free, passive networks to provide service to billions of users in developing countries.
I'm sure there will be many willing to accept their pay in the form of free telephone calls.
Posted by Daniel TaylorTelephony is dead. Long live telephony!
customers will pay for the internet access. as phone requires small bandwith it is quite inexpensive.
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