A true revolution is taking place in the telco industry in Europe, starting in France. You can now call the world for free from any phone to any phone (sounds like skype but it is not)
By paying a monthly fee for your broadband access 2 ISPs (Free and 9Telecom) offer you unlimited phone calls to landline phones not only whithin France but to main European countries, north america some asian countries and in some countries to mobile phone.
This is a serious move and we can easily guess that most ISPs are going to move that way. This will surely threaten VOIP (Voice over IP) competitors like Skype or Yahoo with a pay per minute model.
WE anticipate the traditional low cost VOIP model pay-per-use at whatever x cents/min is going to slowly disappear to the benefice of a monthly subscription model with unlimited call.
To tell the truth from a user point of view it make total sense. My question is: how do they manage with interconnection cost to foreign operators?
Ouriel
I read that information and it sounds to me like a revolution as well, but also like a growing threat for traditionnal telcos and new VOIP players. The answer to your question is the volume. Free and 9TEL are both prepaid card resellers which means that they are purchasing a lot of minutes to historical or alternative telecom carriers. Those volumes enable them to launch such offers with low margins. All the destinations that they are selling are already cheap destinations for them. For eg, you can purchase a minute to Europe or the US for less than 0.05 Euros on this market. The more you call developed countries such as European ones or the US, the cheapest it is for the carrier and now for the end user.
Free Telecom will also include Israel in this monthly flat fee, which means Israel is considered now as a real Western destination :-) . Of course those very agressive offers will not include minutes to Africa and Magreb which are the biggest international demand in Europe, and where the margins are. So it means that Free and 9TEL will keep on developing their telephony business over DSL without losing profitability. Smart move!
Posted by: Phil | 20 December 2005 at 12:36 AM
Merci Phil!
Posted by: ouriel | 20 December 2005 at 10:12 AM
My understanding is that Skype is now offering international calls for a low monthly fee. Maybethis is their answer to a perceived loss in the market.
Posted by: Pat Smith | 21 April 2008 at 08:36 PM