Friday, December 09, 2005

Yahoo undercuts Skype, telcos on voice call rates

CNN Money reported Yahoo said Wednesday a new version of its Yahoo Messenger text, voice and video communications software to be introduced in the next few days will include "Phone Out," with low per-minute charges for calls from computers to phones, and "Phone In," a low-cost subscription service for phone callers to call computer users.

Any company entering the market must do something, like offer lower prices, to be noticed. But will Skype drop its price to compete, or can Yahoo offer its price in the long run?
The world's largest Internet media company said it plans to charge one cent per minute to Yahoo Messenger users calling the United States from, say, Russia, or anywhere else in the world and 2 cents a minute to call 30 other countries including Australia, China, France, Germany, Italy, Japan and Korea.... Yahoo Messenger calls to the United States are half the price of Skype's 2.1 cents per minute. But the Skype rate applies to nearly 30 countries, making it comparable with Yahoo rates.

Russell Shaw blogged on ZDNet Softphone providers are fighting each other over price point, but I don't think the average user cares about whether a call is 1.7 cents a minute or 2 cents a minute. What matters to them is quality of service. How is the connection?

Tarun blogged Why the killer app on VoIP will involve third world countries and SIP - The biggest rise in SIP-based services will be in the third world countries where phone and broadband infrastructure is still being set up.
And it is usually under the control of the government, and they are not likely to make broadband internet available if it will cut into their telephone revenues.
Developed countries will only go mainstream later and USA - being the most developed of all - will probably be the among the last to join the party.

Nic blogged The MIT Media Lab has come up with a project to create an affordable, full-featured portable computer for kids in developing nations. I feel that this is much better than the idea of equipping these kids with connected PDAs - laptops can undoubtedly do more, and there is no contest as to which is more rugged. The usefulness of this laptop is also unquestioned: It can work as a VOIP cellphone for the whole family in addition to its main task as a student’s textbook.
That assumes you have broadband internet access, a BIG assumption in third world countries.

1 comment:

Nic Seow said...

It's evident that I've been spoiled by the widespread availability of broadband here in Singapore. Thanks for that insight.

Indeed, the lack of high-speed internet would be a huge limiting factor. But with a p2p intranet, many users could, in theory, share just one internet connection, reducing the need for advanced infrastructure.

Problems stemming from the limited carrying capacity would still need to be addressed, though.