Skype Bans Mean Big Profits For Incumbent Telecoms

from the ol'-cash-cow dept

Tue, Oct 24th 2006 9:01am — Joseph Weisenthal

Last week we noted that Jordan had recently banned Skype in what looked like a pretty obvious ploy to aid the country's incumbent telecom monopoly. Jordan ultimately reversed the ban, but does banning Skype actually have the desired effect? Sadly, it appears it does. In neighboring UAE, the government also banned Skype, much to the chagrin of Dubai's many ex-pats, and much to the delight of Etisalat, the country's main telecom operator. Following the ban, Etisalat's profits jumped dramatically, 41% in the recent quarter. There may be other factors involved, such as the ongoing economic boom in the region. But when you're selling international calls at $.75/minute, and your competitor that was selling the same thing for $.02/minute gets shut down, it clearly helps.

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15 Comments

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Anonymous Coward, 24 Oct 2006 @ 11:33am

Beyond Skype
Surely Skype users can move to another similar service. Drag their main contacts with them......
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chris (profile), 24 Oct 2006 @ 11:52am

Re: Beyond Skype
Surely Skype users can move to another similar service. Drag their main contacts with them

as it stands right now... no.

skype is a closed protocol, unlike SIP, and so you have to use the skype software and the skype protocol to connect to skype contacts. SIP is an open standard and you can use several devices, clients, and providers.

perhaps skype can provide some sort of ENUM service and register with sip broker.
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MIXLPLIX, 24 Oct 2006 @ 12:27pm

GOOGLE TALK?
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Sanguine Dream, 24 Oct 2006 @ 1:03pm

Big money...
So this is the "free market" economy that people bitch about all the time. Build up a strangle hold on some market and when a competitor arises you just ban them. If this really was free market then these big businesses would have the balls to take on these competitiors but offering superior service instead of buying government intervention.
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Sanguine Dream, 24 Oct 2006 @ 1:09pm

C.R.E.A.M.
Cash Rules Everything Around Me...

So this is the "free market" economy that people bitch about all the time. Build up a strangle hold on some market and when a competitor arises you just ban them. If this really was free market then these big businesses would have the balls to take on these competitiors but offering superior service (or better prices) instead of buying government intervention.
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Solo, 24 Oct 2006 @ 1:34pm

Re: Big money...
Errr... read the post carefully. This is happening in Jordan (http://en.wikipedia.org/wiki/Jordan#Constitution) and United Arab Emirates, UAE (http://en.wikipedia.org/wiki/Politics_of_the_United_Arab_Emirates) which are not democracies and have not embraced a free market economy, especially for their internal market.
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fijibuzz, 24 Oct 2006 @ 5:58pm

Let us hope other 2nd and third world countries dont follow suite. We in fiji have to pay around that amount (USD$0.75) for most international calls. A typical monopoly in action.

Let alone skype lets hope they dont ban all voip services (if that were technologically possible)
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Sanguine Dream, 24 Oct 2006 @ 9:19pm

Re: Re: Big money...
I did read it. My point is that this is happening all over the world. Big business sets up shop, takes a strangle hold on a certain market and then proceed to shape the law so that no competition can challenge them...
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Solo, 24 Oct 2006 @ 11:20pm

Re: Re: Re: Big money...
Mmm... not exactly. If anything the telco company of UAE and Jordan are government owned and operated. And when I mean government, I really mean they belong to the king, or his cousin, or uncle. And competition is better reserved out of the realm of the King's possessions.

Like I said earlier: not a democracy, not an open market, not capitalistic, nothing of what you describe.

Regarding your concern of money buying political influence and squashing competition, what planet do you come from? 6,000 years of documented history of such practices. I'm sorry if you just opened your eyes, but this is how it works.
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PULPO, 25 Oct 2006 @ 1:05am

Re: Re: Re: Re: Big money...
Solo, I think you're missing his point. He is refering to things like Ebay banning Google Checkout, not just what is going on UAE on other closed markets.

He is speaking on a broader level, where if some company or goverment feels like they can't compete in a free market then they just ban they other product.
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david, 25 Oct 2006 @ 6:55pm

nasty
Telecom, the incumbent monopoly telco of New Zealand just shapes international skype traffic in such a way as to make it worthless, so that you have to purchase Telecom's own VOIP solution.
Nasty trick really - I can't use skype to anyone on Telecom's network from TelstraClear's network because Telstra refuses to pay a peering fee to Telecom - even though I live in the same country. I get lag that's several minutes at a time!
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david, 25 Oct 2006 @ 6:59pm

Re: nasty
Oh and I should point out that because we haven't currently achieved a fully unbundled local loop, every single DSL provider in the country _must_ use Telecom's network.
Even TelstraClear does for DSL, (though it doesn't peer), but doesn't with Cable, which is what I'm using now.
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John, 26 Oct 2006 @ 11:45am

Will they also be banning calling cards...
how far will they go? should rebtel, jajah and globe dialer have something to fear???
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Tyler, 26 Oct 2006 @ 12:22pm

I don't think they can do...
anything about a service like Globe Dialer - it doesn't run over data www.globedialer.com - but they certainly could turn Mino and Jahja off.
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dawnzig, 2 Nov 2006 @ 9:13pm

Re: Will they also be banning calling cards...
Ironically, when I visited The Bahamas several years ago, I had set it up beforehand w/AT&T so that my wireless minutes wd be $0.59 USD.
Not cheap, but not exorbitant like I heard it was in those islands.
I also bought several calling cards "guaranteed" to work from any country.
Well, nothing worked from there.
I couldn't even get ahold of AT&T's service dept. on my wireless no matter what I dialed, only the Bahamiam telco.
A 7 minute call was $50 USD!!!
The cards didn't work and we had to buy ones sold there for $1 USD per minute.
Reverse charging on a home calling card didn't work either-because you couldn't get ahold of any outside networks--- and they tried to charge $79 USD for 14 minutes!
(I disputed all charges and never had to paid 'em.)
But how's that for a monopoly & gov't bans?!
I'll never go back there because it's such a rip-off like that with EVERYTHING.
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