Skype's numbers game
VoIP provider says it's tops. Depends on how you count.
From colleague Ben Charny:
Skype has started a VoIP provider subscriber number smackdown.
The upstart, and perhaps the most recognized Internet phone operator worldwide, says it now has a million paying customers. According to Skype's logic, it is now the world's largest commercial VoIP provider.
When comparing Skype's gaudy global figures to other VoIPers, it is indeed larger than anything in the U.S., and that includes Vonage, which has 535,000 paying customers. But perhaps the upstart should look to Japan, where Yahoo Broadband has quietly amassed four million paying VoIP customers, before it begins its boasting.
And what about revenues from the sales of those subscriptions? When comparing dollar signs, AKA the bottom line, Skype is a distant second to Vonage and other major operators.
A Skype representative didn't estimate revenues generated by its million-subscriber premium feature called SkypeOut, a pre-paid calling service charging a few pennies a minute for Skype users to call from their PCs to landline or cell phones. Because SkypeOut users must shell out $13 to open up an account, at a minimum the service has $13.4 million in revenues since its launch in July. That's more than what Verizon Communications made last year from its VoIP offering. Skype has likely also out-earned AT&T and Lingo, the next on the revenue rankings, when factoring in that many of the million SkypeOut users have paid another $13 to refresh the initial minutes.
But, revenue-wise, Vonage and cable operator Cablevision and Time Warner Cable are 10 times larger, even though they only have a fifth of Skype's paying customer count, according to an analyst revenue estimate. The financial disparity is largely because Vonage and the cable operators use a "post-pay" model in which they charge $25-to-$40 fees to every customer each month. By doing so, the comapneis generate multitudes of Skype's revenue with fraction of Skype's paying customer tally.