Skype traffic increases at astonishing pace

Posted by Aharon Etengoff

Skype has succesfully taken on Ma Bell by increasing its international calling minutes from 8 to 12 percent in 2010.

According to a recent Telegeography report, the volume of traffic routed via Skype also rose at an "astonishing pace," while Skype-to-Skype international calling minutes grew by 21 billion in 2009.

Meanwhile, the company confirmed that it had been profitable for at least 11 quarters.

"We make money from interconnecting to the PSTN (Public switched telephone network). All of our investments, after the first rounds of venture capital, there have been no cash injections into the company," Skype spokesperson Sten Tamkivi explained at an eComm conference in Amsterdam. "We keep reinvesting the money we make from the PSTN to make that first rich bucket much better."

Tamkivi added that there were approximately 40,000 "calling corridors" worth paying attention to. 

"Just to give you an example of what a calling corridor could be, in the US to Mexico is the most active international corridor there is in the world, and they serve about 500 million hours of calls a year. That gives us the number one ranking.

"If you look at the top 30 calling corridors, again out of the 40,000 or the 2,000 that are currently researched in the world; those top 30 US to Mexico and 29 others only sum up to the 37 percent of all calls happening.

"[However], there is a 63 percent long tail that nobody has ever been able to address because the telecom industry had always been very focused on the local market, or some of them are regional and some may cover a continent quite well and focus the business and offerings there."

Tamkivi added that Skype had been successful in those corridors because it offered "flexible software solutions" to address the global space. 

"It doesn't matter which country in the world you live in; you can still get access to Skype-to-Skype calling and SkypeOut calling to PSTN connections."