Mobile VoIP cannibalization a «myth», says Skype

John C. Tanner
17 Nov 2009

Mobile VoIP cannibalization of voice traffic is a myth that needs to be challenged, a Skype executive said Monday, touting an independent study of Hutchison-owned 3 UK demonstrating that VoIP will boost voice revenues, not kill them.

The study from CCS Insight Consulting found that continuous Skype users on 3 UK’s network not only generate 20% higher revenue margins than non-users, but also nearly 60% more voice revenue than non-Skype users.

Even 3 UK’s SMS business has seen a boost, despite Skype’s messaging and IM capabilities. Skype users spend almost a third more on SMS than non-users and habitual Skype users are twice as likely to hold a data add-on, CCS reported.

“Hutchison initially saw Skype as an acquisition tool and a differentiator, but the real value has come from higher overall usage of its services and churn reduction,” said Dan Neary, Skype’s Asia-Pacific vice president.

Churn figures from the report indicate that over two-thirds of continuous Skype users upgraded their contract at time of renewal. For new Skype users, the figure was more than three-quarters. Only half of non-Skype users renewed their contracts, the study said.

Neary said the results of the 3/Skype partnership have galvanized Skype’s plans to partner with operators as part of its mobile strategy, which also includes downloads and preload deals with device makers.

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