The Meaning of Free Speech

The acquisition by eBay of Skype is a helpful reminder to the world's trillion-dollar telecoms industry that all phone calls will eventually be free. Founder Niklas Zennstrom's vision for Skype is to become the world's biggest and best platform for all communications -- text, voice or video -- from any Internet-connected device, whether a computer or a mobile phone. Skype can add 150,000 users a day (its current rate) without spending anything on new equipment (users “bring” their own computers and Internet connections) or marketing (users invite each other). With no marginal cost, Skype can thus afford to maximize the number of its users, knowing that if only some of them start buying its fee-based services -- such as SkypeOut, SkypeIn and voicemail -- Skype will make money. This adds up to a very unusual business plan. "We want to make as little money as possible per user,” says Mr Zennstrom, because “we don't have any cost per user, but we want a lot of them.” This is the exact opposite of the traditional business model in the telecoms industry, which is based on maximizing the average revenue per user. And that has only one logical consequence. According to Rich Tehrani, the founder of Internet Telephony magazine, Skype and services like it are leading inexorably to a future in which all voice communication, near or far, will be free.
[SOURCE: The Economist]