TELECOM Digest OnLine - Sorted: Voice Calls Will be Completely Free in a Few Years

Voice Calls Will be Completely Free in a Few Years

Reuters News Wire (reuters@telecom-digest.org)
Thu, 20 Oct 2005 16:07:42 -0500

In a few short years, users can expect to make telephone calls for
free, with no per-minute charges, as part of a package of services
through which carriers make money on advertising or transaction fees,
eBay's chief executive said on Wednesday.

Seeking to justify eBay's $4 billion purchase last week of Web-based
communications phenomenon Skype Technologies, Meg Whitman countered
criticism by a financial analyst during the company's quarterly
conference call by agreeing with some of his points.

"The percentage of users that you can actually charge for (phone
services) will actually go down, so I actually agree with that and we
understood that when we looked at Skype," Whitman said in responding
to the analyst's question.

"In the end, the price that anyone can provide for voice transmission
on the 'Net will trend toward zero," eBay's top executive said.

The company is betting that by combining electronic markets, online
payment systems and Web-based communications, eBay can emerge as a
leader in all three businesses.

Skype, which allows free Web-based calls between members, ended
September with more than 57 million registered users. EBay said it
expects Skype to produce estimated revenues of $60 million in 2005,
and more than $200 million in 2006.

Whitman said Skype's explosive success, would -- over the next several
years -- drive the cost of phone calls to nothing.

The chairman and chief executive of the world's largest online auction
site said the transition to completely free voice communications will
not happen in the next year or two, but that could happen in the next
three to six years.

"Our belief is that the winner in this space will be those that have
the largest ecosystem," Whitman said.

"What I mean by that is: the largest number of registered users, the
largest number of voice minutes, the largest number of developers who
develop the platform, the best product ... that users are willing and
want to pay for."

EBay said it had 168.1 registered users for its online auctions as of
the end of September. It had 68.0 million active users who signed on
to bid or sell in its electronic marketplace over the past 12
months. It had 86.6 million current accounts on its PayPal payment
service, it said.

Copyright 2005 Reuters Limited.

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