Crunchtime for carriers

Six months ago Skype, the self-described global Internet telephony company, hit a milestone: for the first time ever, the Skype system was used to support one million simultaneous calls.

That was remarkable given the company was just more than a year old. But Skype was just warming up. Its growth has since gone through the roof. At one point last week the company had 2.6 million callers online.

In that six-month period the number of people who have downloaded the company's software - which lets users talk to other Skype users over the Internet for free - mushroomed from 13 million to 102 million, and the number of minutes served jumped from two billion to 7.6 billion. (If the download counter on the company's Web site is to be believed, more than 21,000 people download the software every hour.)

This is the instant messaging phenomenon all over again, but unlike IM, the rise of this free Internet tool takes money directly out of the pockets of legacy players - big old telephone companies. At an average of, say, five cents per minute, that's $US380 million in revenue Skype just sucked into the ether.

If nothing else, the success of Skype indicates Internet telephony may be more disruptive than many now believe. The peer-to-peer technology from the founders of Kazaa could be a sign of things to come.

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