Disrupting Innovation

Skype, the Internet calling subsidiary of eBay Inc., has introduced its first plan for unlimited calls to overseas phones. The plan will allow unlimited calls to land-line phones in 34 countries for $9.95 per month(landlines for all, mobile too for US/Canada/China/HongKong/Singapore).

Voice communication has become a very inexpensive commodity and this is obviously much cheaper than the extortionist rates that traditional phone companies charge, but that's still more expensive than what consumers could get if they only shopped around a bit.

As an example of more affordable rates: for the first 120 (or 90) days, Betamax companies (e.g. Poivy, Internetcalls, ...) give you 300 free minutes per week to most international minutes. After this time, subsequent phone calls typically cost around €0.01/min to the same international destinations. Accounts can be recharged in €10 increments and account balances do not expire. The exact details are needlessly complicated (and differ depending on which of the Betamax companies the consumer signed up with), but unless a consumer needs more than 1200/min per month, this comes out at about €10 for 5-6 month of international calling.