Circle of life

It was the trailblazer in Internet telephony, only to be usurped by new start-ups. But Skype may yet have another act.

The first time I used Skype, it was illegal to make a phone call through the Internet in SA.

I wrote an article in the now defunct ThisDay in September 2004 which carried a photograph of me that looked like an arrest mugshot, with the placard “Skype user” instead of the usual police case number. (The idea was business editor Kevin Davie’s.) “Every day I break the law,” I wrote. “And I love it.”

A series of recent articles about Skype’s various problems reminded me of how Internet telephony was then — outlawed in SA, as the department of communications upheld a law that gave Telkom a monopoly on all forms of telecommunications, except cellular.

The law was passed to make it attractive for the foreign telecoms firms that bought into Telkom, and gave them an anticompetitive advantage you’d never see passed by any competitive agency now. Skype was the first of the services that used the Internet to make a call, known as Voice over Internet Protocol (VoIP).

“Holding back the tide of innovation is a bit like the Nats trying to hold back democracy, and eventually such artificial laws had to go,” I wrote in that fine newspaper ThisDay . The damage had been done to both the SA economy and to Telkom.

But under CEO Sipho Maseko, Telkom has finally emerged from the destructive mind-set that allowed it to stagnate because of its monopoly, and has become a properly competitive modern telecoms business.

Given how things have changed, Skype is now one of the VoIP services that Telkom is offering for free (what’s called zero-rating) as part of its aggressively priced FreeMe cellular data-orientated packages.

Skype, meanwhile, has grown to become the largest international call carrier in the world. It was bought twice, first for US$2.6bn by eBay, which wrongly assumed its auction site users would easily shift from e-mail-based discussions into voice calls. Then it was sold for $1.9bn, but that came after Skype had reached its status as the world’s biggest carrier.

Remarkably, most of these intercontinental calls, which would have once been an