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A Vision For Global Telephony VON Europe

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  1. Confidential and Proprietary Skype Technologies S.A.

  2. A Vision For Global TelephonyVON Europe Niklas ZennströmSkype CEO and co-founder

  3. Vision As broadband becomes ubiquitous, most voice calls will migrate to the Internet using free software, on the edges of the Internet, that remove barriers to more natural forms of communication. That software is Skype. Confidential and Proprietary Skype Technologies S.A.

  4. Viral = Exponential Growth Users ~150 000 new users per day~39 M registered users, in all countries in the world~1.4M SkypeOut accounts~1.5B minutes per month (22% monthly growth) Months since launch Confidential and Proprietary Skype Technologies S.A.

  5. Telecom Transition

  6. 1. Many Networks Become One • Previously we had vertical solutions that offered one network per service: • PSTN, X.25, Frame Relay, IP, Telex... • The Internet is becoming the common carrier for all services • Growth comes as various wireless access technologies connect to the Internet -Wi-Fi, 3G (data), WiMax, UWB… Confidential and Proprietary Skype Technologies S.A.

  7. 2. Phones are Becoming Computers • Powerful CPUs • Connected to the Internet via various radio networks (multi-band) • Open OS (Linux, Symbian, Windows Mobile, etc) • Easy to install applications • Affordable Confidential and Proprietary Skype Technologies S.A.

  8. 3. Telephony is Becoming an App • An application that you run on a computer • Computers have different form factors • Desktops, Laptops, PDAs • Mobile phones • Embedded • Increasingly ubiquitous and everywhere Confidential and Proprietary Skype Technologies S.A.

  9. …New Game with an App • Economics • Zero customer acquisition costs • Zero marginal costs per call minute  You can’t charge for calls anymore • Distribution • Network independent & worldwide market • Innovation • Software development product cycles, rather than network infrastructure (10 years+) Confidential and Proprietary Skype Technologies S.A.

  10. VoIP is driving broadband sales Operating one network is more cost efficient than one network per service Examples: BT 21st Century Network TeliaSonera HGC Carrier Implications TelecomRevenue ? Telephony Internet access Confidential and Proprietary Skype Technologies S.A.

  11. Why Now?

  12. Why Now – User Maturity • Who wants to use the Internet and PCs for calling? • Who could imagine we would use our PCs for: • Music jukebox and music downloads? • Photo albums and image sharing • Sara 8 years old doesn't like to talk on the phone (it’s weird) but talking on Skype is cool • Mike 17 uses his PC for music, TV, photos, gaming and talking (incl voice) to friends Confidential and Proprietary Skype Technologies S.A.

  13. Why Skype • Outside-of-the-box technology - none of our engineers were telecom engineers – they just solved the problem • Simple-to-use as the benchmark was the traditional phone and the web browser • Think of your mother as user Confidential and Proprietary Skype Technologies S.A.

  14. Why Now – Infrastructure • Over 100 million computers connected to broadband Internet last year • Massive bandwidth available – QoS is moot • Powerful computers • Wi-fi Confidential and Proprietary Skype Technologies S.A.

  15. The Ecosystem • Encouraging evangelizers • Extensive API which is free to use • Accessories which are Skype Enabled are very attractive to consumers • Existing users recommend Skype to friends (as long as we are honest and respect our users) Confidential and Proprietary Skype Technologies S.A.

  16. Growth Opportunities Where are Skype, and partners, going…

  17. Growth has been on PCs so far • Growth-to-date has been primarily on desktop/laptop Windows • There are many more mobile phones than PCs • Although we (early adopters) can’t live without our PCs our mothers don’t want to leave them on • Skype is breaking out of the PC… Confidential and Proprietary Skype Technologies S.A.

  18. New Platforms • Skype on mobile OS: • Short list: Embedded Linux, Symbian, Windows Mobile,… • Embedded Platforms: Embedded Linux • We intend to work with hardware companies to include Skype on their Internet connected devices Confidential and Proprietary Skype Technologies S.A.

  19. API – Developer Opportunity • Skype API enables developers and hardware companies to integrate Skype functionality into their products • Unleashing innovation and enabling developers Confidential and Proprietary Skype Technologies S.A.

  20. New Services • SkypeIn – 30 € per year • US, UK, France, Sweden, Finland, Denmark, Poland, Hong Kong • Free global roaming • VoiceMail • Early usage shows that people use it differently than PSTN voice mail Confidential and Proprietary Skype Technologies S.A.

  21. New Affiliate Program • Today Skype announced its ‘Affiliate Program’ • Online communities, Web publishers, bloggers and Skype enthusiasts are rewarded with commissions of up to 10% for promoting Skype on their websites • Affiliates participate in Skype’s tremendous growth and receive commissions from Skype Store purchases made by visitor click-throughs Confidential and Proprietary Skype Technologies S.A.

  22. Affiliate program benefits • Any website or blog seeking stronger communications with its audience and community will benefit • Social networking and community websites with user forums will particularly benefit from the open, multi-mode communication Skype enables • The affiliate program helps extend the referral power that has made Skype the fastest-growing voice communications offering worldwide with more than 39 million users. Confidential and Proprietary Skype Technologies S.A.

  23. Regulation and VoIP

  24. The Need for Regulation • Why do we have regulation at all? • To ensure consumers gets decent services where there is a market with dominant players • Not to stop innovation and to protect incumbents Confidential and Proprietary Skype Technologies S.A.

  25. Maybe Regulate the Incumbents • VoIP is a nascent technology that need to • Interconnect to the PSTN • Be delivered over third party Internet access • Those networks are mainly provided by incumbents or second operator in an oligopoly market. • They have incentive to stop others VoIP • Don’t let them (not good to restrict consumer choice) Confidential and Proprietary Skype Technologies S.A.

  26. Nomadic Numbers Benefit • Users can connect with their computer/phone anywhere there is an Internet access and be reached via their geographical number • Customers save money on roaming • Callers can call cheap local calls rather than expensive calls to mobile Confidential and Proprietary Skype Technologies S.A.

  27. Virtual Numbers Benefit • A business in e.g. Luxembourg can have virtual VoIP numbers in France, Germany, Hong Kong, USA, Sweden, etc • this opens up enormous benefits for end users • Regulators in many countries are not allowing this, which is a disadvantage for those countries Confidential and Proprietary Skype Technologies S.A.

  28. Emergency Calling “When there is a burglar in my house I don’t want to call the police, I want to email or IM them” • Take advantage of the new IP technology to provide richer emergency services • Don’t force legacy emergency calling to nascent technology Confidential and Proprietary Skype Technologies S.A.

  29. Solution • Provide open interface to emergency centrals which can receive text, voice and video over IP • Build up national IP geo mapping databases managed by national authorities Confidential and Proprietary Skype Technologies S.A.

  30. Summary • Voice is becoming a software application • New rules with software • No benefits of regulating VoIP Confidential and Proprietary Skype Technologies S.A.

  31. Thank You! www.skype.com/company/jobs/ Confidential and Proprietary Skype Technologies S.A.