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Skype now world's top international telco

In just five years, Skype, the free Voice over Internet Protocol (VoIP) telecommunications carrier, has become the world's...

In just five years, Skype, the free Voice over Internet Protocol (VoIP) telecommunications carrier, has become the world's leading carrier of international voice telephone calls, according to TeleGeography, a market analyst.

Skype, which is owned by eBay, last year carried some 8% of the world's 384 billion minutes of cross-border traffic, TeleGeography said.

"Skype's traffic growth has been remarkable," said TeleGeography analyst Stephan Beckert. "Only five years after its launch, Skype has emerged as the largest provider of cross-border voice communications in the world."

In its latest market update, TeleGeography said international voice traffic continued to rise at double digit rates, 14% in 2007 and an estimated 12% in 2008.

TeleGeography estimated that Skype's cross-border traffic grew about 41% in 2008 to 33 billion minutes.

It said declining call prices had kept revenues flat. Skype's prices are free between Skype subscribers and cheap to fixed line numbers.

Not all of Skype's traffic is a net loss for international carriers, Beckert said. Skype's paid "Skype Out" service, which lets users make calls to standard telephones, generated 8.4 billion minutes of calls in 2008.

Skype uses wholesale carriers, such as iBasis and Level 3, to connect calls to the telephone network, and peer to peer software to route calls between Skype accounts.

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