[MLB-WIRELESS] Free P2P phones will pressure telcos

[Clae]

>Free P2P phones will pressure telcos
>http://news.com.au/common/story_page/0,4057,7758460%255E15318,00.html
>---
>
>Free P2P phones will pressure telcos
>Karen Dearne
>November 4, 2003
>
>A PEER to peer phone service launched just nine weeks ago is shaping
>up as a serious threat to conventional telcos. More than 2.2 million
>users have downloaded the software.
>
>Called Skype, the system delivers voice-over-IP telephony over a P2P
>network, with nodes linking dynamically to handle traffic routing and
>processing without needing central servers.
>
>The system was developed by the people behind KaZaA — the popular
>file-sharing software that allows internet users to find and download
>music held on other people's PCs.
>
>KaZaA co-founders Niklas Zennstrom and Janus Friis say Skype
>will "challenge the outdated business models and rip-off tactics of
>legacy telcos".
>
>They plan to "bring global unmetered communications to people
>everywhere".
>
>"We will achieve this by building a user-driven P2P network".
>
>CSC future technologies expert Bill Koff said Skype may "completely
>disrupt" the traditional telephony market.
>
>Like KaZaA or Napster, Skype forms a highly distributed network that
>runs on millions of private PCs running the free software.
>
>"Skype creates a way for people to make telephone calls through VoIP
>anywhere in the world, from PC to PC," says Koff, who is vice-
>president of CSC's Leading Edge Forum.
>
>"It's an example of a self-organising network that essentially cuts
>out phone companies as the switching mechanism for connection."
>
>Koff says the most "disruptive" technologies that will "hit the
>marketplace over the next 18 months" use wireless data and 802.11
>technologies. "These pose an enormous threat to the telcos," he says.
>
>"Telcos have a real problem because their billing systems account for
>25-35 per cent of the cost of each call. "Just taking that out of the
>equation for consumers means huge savings. In the US, phone companies
>are taking this very seriously."
>
>KaZaA and Napster struck legal problems because users were exchanging
>copyrighted material, but Skype faces no such obstacles because no
>intellectual property is involved.
>
>"This is just me connecting to you through a different mechanism than
>a central monopoly," Koff says.
>
>"Companies and individuals can set up their own switching mechanisms,
>which will completely disintermediate the phone companies."
>
>While the telcos are trying to fight the change through regulatory
>means, "they don't have a leg to stand on", Koff says. "It's just
>another business entering the sector."
>
>Although Skype is providing the software at no cost, Koff says, it
>will earn revenue from additional products and services that users
>are prepared to pay for.
>
>"This works very much in conjunction with things we've been talking
>about for years around VoIP," he says.
>
>"Cisco, for example, has just released 802.11 wireless telephone
>handsets for corporations to use within their environments.
>
>"If they have 802.11 for their PCs, they can also carry voice traffic
>for people in those areas.
>
>"If you can start imagining 802.11 available for free in the streets
>of New York, where people can wirelessly connect to the internet, you
>can imagine VoIP through a Skype-enabled PC that does all the
>switching for you."
>
>---
>
>HOW IT WORKS
>
>SKYPE uses peer-to-peer technology to form a highly distributed
>global network of personal computers that allows users to make free
>phone calls over the internet.
>
>Users simply install the software on their PCs. Users see when people
>they want to call are available via a menu or phonebook function.
>
>Skype says its system offers better sound quality than ordinary
>phones, but users need an internet handset or PC headset/speaker plus
>microphone.
>
>All phone calls are encrypted end-to-end so they can be securely sent
>over the public internet.
>
>The system intelligently routes phone calls through the network.
>
>www.skype.com
>
>The Australian
>
>
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