Wireless, Not Skype, Cannibalizes Wireline Voice

It appears that Skype now represents a bit more than four percent of global long distance traffic, says TeleGeography. Skype users generated about 6.6 billion minutes of traffic in the third quarter of 2006, and are on track to make over 27 billion minutes of PC-to-PC calls this year, TeleGeography says. About half of Skype's traffic is international.

Still, the global switched and VoIP traffic base represents 264 billion minutes of use annually. So how about PC to PC Skype traffic? Last year such traffic was equivalent to 2.9 percent of international carrier traffic, and 4.4 percent of total international traffic in 2006. Furthermore, not all of Skype’s traffic is a net loss for international carriers. SkypeOut keeps traffic and revenue on the public network, at least for purposes of termination. SkypeIn provides a similar benefit for termination of traffic.

Still, it’s clear that VoIP services will continue to gain in popularity. "Someday, all calls will be routed over the Internet," says Stephan Beckert, Research Director at TeleGeography. “But the numbers suggest that traditional international carriers aren’t going to disappear anytime soon.”