Skype Sale
September 01, 2009
The New York Times this morning that eBay plans to announce the sale of its Skype subsidiary to an investment group today. The following note provides a bit of perspective on Skype’s business.
While the buzz around Skype has abated somewhat since its acquisition by eBay, Skype is profitable, and the company’s traffic growth has been remarkable. Skype generated 43.4 billion minutes of free, Skype-to-Skype (computer-to-computer) traffic in 2007 and 65.5 billion minutes in 2008. Skype also reported 5.6 billion minutes of paid, computer-to-telephone traffic in 2007, and 8.4 billion minutes in 2008.
Skype’s impact on the international long-distance market is particularly strong. TeleGeography estimates that approximately 33 billion minutes of Skype’s computer-to-computer traffic was international, up from 22 billion minutes in 2007. Skype accounted for 8 percent of all international voice minutes in 2008, up from 6 percent in 2006 (see Figure). Only 5 years after the launch of its service, Skype has emerged as the largest provider of cross-border voice communications in the world.
Skype’s Share of International Long-Distance Traffic, 2008
In addition to its free calling service, Skype’s paid service allows Skype users to place calls to standard fixed and mobile telephones. Skype relies on wholesale international carriers, such as iBasis and Level 3, to connect these calls to the PSTN. If paid calling patterns mirror Skype-to-Skype calling patterns, Skype users generated approximately 4.2 billion minutes of paid international traffic in 2008.
For more background on the international long-distance market, please see: http://www.telegeography.com/research-services/telegeography-report-database/.
For further information, please contact: Stephan Beckert sbeckert@telegeography.com +1 202 741 0042
