International long distance traffic growth is slowing rapidly. According to new data from TeleGeography, international long distance traffic grew four percent in 2011, to 438 billion minutes. This growth rate was less than one-third of the industry’s long-run historical average of 13 percent annual growth. Because telcos must rely on strong volume growth to offset inevitable price declines, slowing traffic growth is making life ever more difficult for international service providers.
International Long Distance Traffic Growth, Carriers vs. Skype
In contrast to international phone traffic, Skype’s cross-border traffic has continued to soar. TeleGeography estimates that cross-border Skype-to-Skype calls (including video calls) grew 48 percent in 2011, to 145 billion minutes. Although the volume of international traffic routed via telephone companies remains more than three times greater than Skype’s cross-border volumes, their growth rates differ dramatically. TeleGeography estimates that Skype added 47 billion minutes of international traffic in 2011—more than twice as much as all the telephone companies in the world, combined.
“Given Skype’s enormous traffic volumes, it’s difficult not to conclude that at least some of Skype’s growth is coming at the expense of traditional carriers,” said TeleGeography analyst Stephan Beckert. “If all of Skype’s on-net traffic had been routed via phone companies, global cross-border telephone traffic would have grown 13 percent in 2011, remaining in line with historical growth rates.”
The TeleGeography Report has been a vital source of statistics and analysis for the international long distance market for 20 years. To find out more and to download the executive summary, please visit http://www.telegeography.com/product-info/tg/index.php.