15 thoughts on “It's Time for Skype to Spring for Its Own Infrastructure”

  1. Aswath has a good point. Skype is banking on low costs. The problem with low cost is low quality and you know where that will take you.

    I really thought they would utilize EBays data farm when they got bought. They really do need to spend some money on their infastructure if they ever want to become a real phone service.

  2. I totally agree. There is no way this free ride is going to continue. The word of mouth negative publicity is going to cause problems with the mainstream buyers of Skype-branded gear.

  3. Skype is already dead : in Europe, every mass-market ISP provides “triple play” subscriptions including
    – free unlimited local + national calls
    – very low cost continental calls
    – low intercontinental costs

    We, in Western Europe, continue to use Skype only for free video conferencing, point.

    No way to make money for Skype / Ebay, that’s why Skype is simply dead.

  4. I own one of the Philips VOIP841 phones and, while I haven’t been hit with any of these outages, I have to support the build-out idea. These standalone devices make Skype a MUCH more useful service, if only because you aren’t tethered to your PC, and you don’t have to worry about whether your PC is on and stable. (I also own a Philips VOIP321, which is PC connected, and that is a constant concern.) I’d also bet that Ebay is seeing higher ARPUs for users with these devices, so they may be able to justify some buildout, if not a major one. I know I’m spending a lot more with Skype now than when I was just using the PC client.

  5. A small correction: In that post, I had argued that it doesn’t cost that much to build the whole set of supernodes and the operational cost is not much either.

    My circumspect point in that post was that Skype is getting the chic factor because it uses a P2P technology. A secondary point was that SIP providers can use that architecture instead of deploying big iron boxes. But alas, they were all PSTN emulators in more ways than one.

  6. Seems like they could accomplish the same thing with smarter devices that give more back to the network. Problem solved without a penny spent by Ebay/Skype.

  7. If Skype is sure that building out their own supernode network would solve the problems, then it would probably make sense to do so. However, it could be that the problems have at least as much to do with the WiFi network in the home, and the potential for low signal level in parts of the home, or interference on the public spectrum from neighboring homes and businesses. These are problems that will be harder for Skype to solve.

  8. Interesting, I was just discussing a similar idea with Sam (mozilla) the other day and he mentioned that the hype won’t really matter unless there is great bandwidth, and an infrastructure that attracts functionality – such as if skype were to own a network of its own. I think it still can be free, they will have to find a way to monetize on internet ads though and build its own network somehow.
    Not sure how that would be possible.
    How are they making money now?

  9. I agree with you margueriteanne, and with Sam, that more bandwidth would help. Another solution is greater control of the customer’s Internet connection, and I have posted more on that topic on my blog at http://ikeelliott.typepad.com/telecosm/2007/11/why-skype-fails.html

    Skype currenly makes about 40 cents per month per subscriber, on average, and it is mostly on their Skype Out and Skype In services, where they give Skype subscribers access to the PSTN. Their challenge is to try to grow this meager ARPU into something more like $5 per subscriber per month, over time, and their wi-fi phone efforts are a first step in this direction. They need to get a lot more Skype In and Skype Out usage, and they need to sell other service add-ons more consistently, too.

  10. You don’t understand anything about how Skype works, yet you make technical recommendations on what they should do? Why do you think this has anything to do with supernodes?

  11. I don’t know what’s wrong with their stuff, but my Skype phone has been working so poorly lately that I’m forced to leave them. I already put the phone up for sale — it does other things that I don’t use it for so someone else might keep it out of the landfill.

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