Experts wonder: is telecom dead?

There was one question on the minds of technology leaders attending the Etre conference in Cannes on Tuesday: “Is telecom dead?”

Paradoxically, however, whether they answered yes or no, they pointed to the same reason: Skype.

Skype Technologies SA, the Luxemboug-based startup that provides software that allows users to make free phone calls worldwide over the Internet, is changing the landscape of the traditional telecom market, experts agreed. Whether Skype was killing the traditional telecom industry or forcing it to reinvent itself to survive were matters of contention, however.

“Yes, telecom is dead,” McKenzie Consulting analyst Mike Nevens said during a keynote address, citing the pressure the industry faces from companies like Skype that are providing data voice services over the Net, cutting out telecom operators’ traditional fixed-line business.

Tim Draper, managing director of venture capital firm Draper Fisher Jurvetson, took a different tack. “Telecom is alive and well and it’s living in Skype.” Draper said. Draper’s firm invests in Skype, but even among attendees with no economic interest in the company, the Skype hype at Etre reached fever pitch.

While some traditional telecom players have already jumped into the game with voice-over-IP (VoIP) offerings — primarily for businesses — Skype is seeing a faster rate of growth, allowing it to establish itself at a time when questions over whether regulation will hamper telcos’ participation in the area still remain, analysts said.

Skype has over 12 million users and adds 70,000 new customers a day, according to company co-founder and Chief Executive Officer Niklas Zennstr

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