All About Skype: Revolution in VOIP

Skype is now one going to be one of the leading VoIP service providers in the telecommunication world with their ever growing users around the world. They provide services in almost all of the countries in the world. They initially attracted people through providing high quality pc to pc talking service with an excellent quality for free. Now, they can make a position in the telecommunication and VoIP market introducing some other services which are absent in other service providers.

For free services Skype can offer a video calling system where both the persons will see each other while talking with through webcam. The service will not cost a single penny to the users and the quality would be best comparing with other VoIP companies. It is true that some other companies like Yahoo have already came up with this service but the quality of video and voice will differentiate Skype from other existing companies. While people will get the better quality then they will definitely go for the better and within a short period of time users will rush for the Skype’s video talking. It would be the main attraction among the users.

Here, Skype can introduce a quality webcam for the Skype users with a lower price and they can easily make people understand that this camera will ensure a better quality for video talking. It is noteworthy that, currently Skype has 200 products in which 100 are Skype certified which have a good demand in the market and people believe in Skype products as it provides quality products.

So, it is very clear that Skype, through this service, can provide the best service comparing other companies for the same price level. From this point of view I think Skype bosses can go for “The same for less” positioning strategy for their service areas.

Moreover, Skype can also make their position in their value added services. For example, with the accordance of SkypeOut, the authority of Skype can add an extra feature of video option which means that when a person will call to a landphone or mobile phone both of the persons will be able to see each other. Here, a question comes that how a person talking over the land phone will make him available to see for the person sitting in front of the computer as there is no video option with land phone sets.

Let me be first to provide a bit of explanation regarding this matter. As Skype certified products have a great demand in the market then it is possible to market a new product using the brand name. Moreover, if that product gives some extra benefits or has some additional features compared to same category of products of different companies available at the market then the product must have some demand from its initial stage of being marketed. From this point of view, Skype can introduce a land phone set with a built-in camera through which the person talking from the Skype account will also be able to see that person. People will attract with this phone rather than the traditional one as with this new phone set they will have access to video conferencing from anywhere through just telephone sets. In the same way, Skype can also market a mobile phone which will also provide same service for video talking.

In this way, Skype will get much popularity through this product because when people will be introduced with this product and its additional feature in the market then they will come to know about Skype and its services even if they have no idea about Skype beforehand.

Using this technology, businessmen will have access to video conferencing even when he or she is out or in move for their work. If this service is given for free with SkypeOut service then it can be a market positioning for the value added services of Skype and the cost of SkypeOut is very cheap comparing with other VoIP services of different VoIP companies.

So, it is very clear that, through this service, Skype will provide better quality and also for the same price level which also stands for “The same for less” positioning strategy.

Skype is clearly the market leader in VOIP. The growth of the software is spectacular and it is continuing to grow. Many companies now use Skype in their communication around the world. The rapid expansion of Skype has changed the telephone world and many big telecom companies may feel threatened from Skype in future. On the other hand, Skype has not been able to be considered as a viable alternative to the PSTN telephone system. Skype is not under threat from the big telecom companies but in future some of the big telecom companies may address the market segment on which Skype is working.

Skype has one clear advantage over the big telecom companies. Skype is expanding very fast. Because Skype is Internet based it can cover the entire world easily. For example, if a big telecom company wants to cover Asia, Europe and America then it has to spend a lot of money and open a lot of offices in many cities. On the other hand, to get the service of Skype, you just need an Internet connection. Broadband Internet is now becoming a common thing in many countries. Even in Bangladesh, we have better internet now than just 2 years ago.

On the other hand, the main disadvantage of Skype is that it is Internet based and you need some technical know how to use Skype. For using a telephone or mobile phone, you do not need any technical knowledge.
So, Skype officials have to keep these factors in mind while developing a strategy for dealing with big telecom companies. Skype should not go after big telecom companies right away. Instead, it should make its position very strong in the VOIP market. Millions of Internet users still do not use Skype and many of them do not know about the benefits of Skype. So, Skype officials should take a strategy to inform these users. On the other hand, Skype should integrate many of the features of PSTN so that many telephone users get interested about using Skype.


Skype has some deal with other companies with partnership relations. In 2004, they had partnership deal with hardware companies Plantronics and Siemens Mobile, and software company Global IP Sound and the Internet service provider PC home online. For getting feedback in the hardware and software sector, Skype made those partnership relations with the companies.

Partnership deal can be needed for feedback in terms of investment or in other problems like technological problems. Most big companies in the world have some partnership deal with some other companies rather than individual. As the world is getting closer day by day, it is badly needed for the multi-national companies to have partnering relations with some other companies. Considering these things I think Skype should go for partnership deal realizing the places it needs feedback.

Skype is still a VOIP service provider company and it could not enter in the PSTN based telecommunication sector or in the traditional telecommunication sector. For entering in this segment of the market, Skepe should be developed in its technology otherwise it is not possible for them and in doing so, another company can provide help in getting into this market which is very necessary to have for a new company of this sector. Though many will say that partnership has some negative aspects too such as having conflicts in future, hard to keep privacy, but its positive sides can easily overthrow the negative aspects.

Having a partnership is also very useful for building a brand for a particular product. Advertisement can be made through partnering. Different kinds of partnership are available from which a company can choose its best partnership strategy considering its needs and demand. So, no doubt, partnership can turn some extra revenue for the company and it can have effects on the company for a long time. Here, it is noteworthy that at present, Skype has six types of partnering ways who are indirectly helping the company to make revenue.

Market is always competitive and here each of the company is to struggle to survive. More the company can provide superior value to its customers, more they will make revenue. In order to make some additional superior value, companies are to come up with new products or develop existing products.

I think, for grabbing a greater market share the Skype should focus on those services offered by other companies because people will use Skype for a better calling quality but for other services like chatting in different chat rooms, which is available in yahoo service, users will go for other service providers. So, for those users, Skype should come up with this chatting option in different chat rooms of different places.
They can also introduce video calling with a good quality for free so that users will be more interested to Skype as they are with the calling quality. In this way they can market some other product which can be made exclusively for this video purpose which also deserves to have a good quality. So, it is a good way to make some extra benefit marketing a new product in the market. Another product can be appropriate for Skype is video conferencing with land phone as well as mobile phone so that a person can have a conference any time. For this, Skype can also come up with a new land phone set with a built in camera. If the quality of the video is good then, no doubt, it will make a boom for Skype.

Skepe is mainly making revenue some of its value added services like SkypeOut, SkypeIn, Skepe Voicemail and Call Forwarding. These services are not free but these are available for a low cost. Among these services users sometimes face some problems regarding some of the problem especially in the call forwarding. Some users have complained that the caller who called him have seen a message “the user is offline” though the call was forwarded. Another thing is that at present, it is mandatory to have the Skype software in both the computers to make a call but if this software can make available with the windows system then the number of user would definitely be increased.

So, through introducing new product and developing the existing product Skype can make a good amount of revenue which is helpful for any company. With an excellent market growth, Skype has potential to make flourish in this market.

Skype is now the market leader in the VOIP market with an excellent market growth. In 2004, it has 20 m registered users which are now more than 55 m and everyday more than 150,000 people register to Skype which indicates a great turnover for the company.

The company is providing many services for free so in future the company may face some financial problem. It is also true that they are earning revenue through some value added services like SkypeOut, SkypeIn, Call forwarding and Voicemail. Moreover, as Skype is based on Peer 2 Peer technology its marginal cost is also very low which let the company offer some free services with best quality on which the company is positioning.

To avoid this kind of problem, Skype should go for a liberal pricing strategy. In this way they should charge some for the services otherwise in future if they increase the prices the users can get shock which will not be a good thing to happen for the company. However, if they charge some form now then it will not seem to be illogical in future.

As Skype is making money based on P2P technology and it is going to make a monopoly market which will never be let go free without any challenge. May be US government or any private institution will investigate and research for this technology and will make a counter product or service and for example I can name the Kazza software. Besides, other countries will also go for this technology as it is making boom in the VOIP telecommunication system. So, the Skype bosses should always have a look to the companies and countries in the world.

Though Skype is now the market leader, it will be a big challenge to survive in top as other companies in the market will try to make some way to disrupt their revenue. Another thing is that, big telecommunication companies can also try to make software like Skype in order to have the same amount of revenue as Skype is now making.

So, it will definitely be a great challenge for Skype to sustain themselves in the same position they now exist. Of course, they should go for some strategy to avoid the problems and survive in the market.