Skype’s the limit for free internet telephony service

11 Mar 2004

Skype, a global provider of P2P services providing voice calls for free over the internet, is emerging as a credible challenger to the dominance of traditional voice telephony providers. Skype launched its free internet telephony service less than six months ago amid much hype that it was ‘changing the face of voice communications by moving voice calling to the internet’. However, it appears to have backed up its boast and its initial success is reported to have outstripped the growth enjoyed by e-mail company Hotmail. The newcomer has signed up around 8.5 million users worldwide in its short lifetime, beating Hotmail which needed 14 months to achieve the same goal. Added to this, the new service is growing at a rate of 1.2 million customers per month, compared to the e-mail company’s figure of a million, leading to growing concern among the former state-owned behemoths over the problems associated with uncontrolled growth of free IP-based services.

Skype’s system, which requires both calling parties to have personal computers equipped with a microphones and application software, is currently limited in scope. Nonetheless, the company is offering a taste of things to come and the hi-fi quality sound connections will be more widely available when Skype launches WiFi-enabled handsets later this year with the capability of routing calls through the user’s home PC. The company was co-founded by Niklas Zennström, who was also the first CEO of renegade online music service company KaZaA, and Janus Friis who also co-founded KaZaA and Altnet – the world’s first secure peer-to-peer wholesale network.