Skype gave away $12.9 billion in free international calls in 2009

One in nine cross-border minutes was a free Skype-to-Skype call last year. That's $12.9 billion in international calls Skype gave its users for free assuming Skype's customers would pay a world average market price of roughly $0.24 per minute.

Did Skype take those billions from telephone companies?

Just a little.

Telephone companies don't offer much in the way of differential pricing, charging more to people who'd pay more and less to people who'd pay less. So they leave a large underserved market.

Skype is happy to serve them.

Skype is also making the market bigger. When you make Skype-to-Skype calls, you don't worry about the cost of the call; just your time and your Internet connection. Skype voice calls can run for hours without anyone feeling anxious about using up minutes or the phone bill. So not only is Skype bringing underserved callers into the international calling market, Skype is encouraging them to speak longer and call more often.

Looking at the chart, people have been substituting Skype's free/cheap, simply priced, IM-style calling for expensive, unpredictable, and hard-to-dial PSTN calls. This bids down the market price of all calls. That's been going on for years; the average price is one fifth of what it was fifteen years' ago. It also slows the growth of PSTN calling as people switch to Skype.

The trend line shows Skype serving 75 billion minutes this year and 100 billion in 2011. That assumes Skype doesn't do anything new, like improving virality, usability, availability, presence, accessibility. You know: things that bring more people in and get them to call more people, more often, for more minutes.

tags: skype, competition, international, longdistance, pricing, chart, stats, statistics, trends

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