The awaited end of rapacious money making from international calls is nigh, according to Telegeography.

International long distance traffic growth is slowing rapidly. According to new data from TeleGeography, international long distance traffic grew four percent in 2011, to 438 billion minutes. This growth rate was less than one-third of the industry’s long-run historical average of 13 percent annual growth. Because telcos must rely on strong volume growth to offset inevitable price declines, slowing traffic growth is making life ever more difficult for international service providers.

Governments, of course, haven’t a clue, and are erecting even more elaborate gateway monopolies (e.g. Bangladesh) and slapping extra taxes on outgoing international calls (Sri Lanka). The first is futile; the second is stupid.  But the question is when international telephony disappears, not whether.

But the really good stuff is in Para 53.

The Telecommunications Regulatory Commission will implement policies and strategies to encourage telecommunication companies to give priority for the development of broad-band network facilities. In keeping with development priorities, telecommunication charges on incoming and outgoing calls will be revised suitably.

Since the LKR 2 billion expected to be generated by the increases in taxes on incoming calls (from USD 0.07 to 0.09 per minute) and on outgoing calls (from LKR 2 to LKR 3) is reflected in the new revenue measures (Table 1), I was scratching my head about this last sentence. It seemed, on the surface, like an ordinary revenue-raising measure; what did it have to do with encouraging broadband development?

But then I realized that it would. Because international calls will be made more expensive by the LKR 3/mt tax on outgoing calls, Sri Lankans will have greater incentive to call their friends, relatives and business contacts using Skype and Gtalk. This will create demand for broadband. All that one needs is a dongle and mobile signal. The government won’t get its 3 rupees, the telecom operators will see their international revenues dipping. But on the good side there will be more demand for broadband. But this is “in keeping with development priorities.”

I still have to figure out the hidden wisdom behind the decision to raise the tax on incoming calls from USD 0.07 (app. LKR 8) to USD 0.09 (app LKR 10). This will, for sure, increase incentives to engage in bypass or grey-market business. The TRC and Police will have lots to do, shutting down bypass businesses and running newspaper ads. The flow of black money into the economy will increase, which is useful for political campaigns and such. Perhaps people will use black money to obtain broadband services? This bit is a work in progress. Ideas, suggestions welcome.

According to KPN, 85 percent of the company’s customers who use a Google Android phone downloaded WhatsApp onto their handsets from last August through April. As a result, KPN’s revenue from text messaging, which had risen 8 percent in the first quarter of 2010 from a year earlier, declined 13 percent in the first quarter of this year.

At a presentation to investors in London on May 10, analysts questioned where KPN had obtained the rapid adoption figures for WhatsApp. A midlevel KPN executive explained that the operator had deployed analytical software which uses a technology called deep packet inspection to scrutinize the communication habits of individual users.

The disclosure, widely reported in the Dutch news media, set off an uproar that fueled the legislative drive, which in less than two months culminated in lawmakers adopting the Continent’s first net neutrality measures with real teeth.

We’d heard of DPI being used to detect grey market traffic in countries that try to maintain international gateways, but this is a new one.

Full story.

Wireless carriers now funnel voice and data traffic over two separate networks and charge customers accordingly. In the not-so-distant future, analysts and industry executives say, all mobile services, including text messages and voice and video calls, will travel over data networks.

Microsoft’s recent $8.5 billion deal to buy Skype, the Internet calling service, could accelerate this change — one that is forcing wireless carriers to adapt. Services like Skype can cut into the carriers’ revenues because they offer easy ways to make phone calls, videoconference and send messages free over the Internet, encroaching on the ways that phone companies have traditionally made money.

Full article

New data from TeleGeography show that growth in international call traffic has slumped while international traffic routed via Skype continues to accelerate. International phone traffic grew an estimated 4 percent in 2010, to 413 billion minutes, down from 5 percent growth in 2009, and a far cry from the 15 percent average growth rate achieved during the previous two decades.

Where did the growth go? One factor contributing to the slowdown is the deep recession of 2007-2009, which affected business demand for international communications and many consumers’ ability to pay for international telephone calls. Economic conditions are reflected in sharply reduced calling card volumes, and in a drop in traffic from the U.S. to Central America.

Indi introduces Fahim Farook, Navin Weeraratne and Monalee Suranimala, as tech savvy fishermen in this different kind of sea.

All of these characters launch their metaphorical boats from the island of Sri Lanka, off the southern coast of India, recently emerged from years of war but blessed with many English speaking, IT literate people, functional Internet infrastructure and a low cost of living.

They have also emerged at a time when outsourcing is booming around the world, with major companies like Walmart purchasing products from China and companies like Goldman Sachs outsourcing financial and IT knowledge work to India. Where these Sri Lankan differ, however, is they do not work for companies that work for companies. They work, essentially, for themselves.

Read more about Farook, Weeraratne and Suranimala here.

Vint Cerf, who can fairly be described as one of the godfathers of Internet has endorsed Barack Obama in the US presidential race, saying that his decision is swayed by Obama’s stance on net neutrality – the question of whether content providers should be charged more for different content by the “pipe” providers.

Extracts:

We believe that the Internet should remain an open environment. It’s vital to innovation. Companies like Google, and Yahoo, and eBay, and Amazon, and Skype and so on, got their start without having to get permission from any ISP or any broadband provider to offer services. They simply acquired access to the internet, put their services up and then made them available to the general public.

We think that’s the best way for the Internet to evolve and I’m pleased to say that in the upcoming presidential elections, the two candidates have rather different views of this particular matter. Senator Obama in particular sees things the way I do which is that the Net should remain open, fully accessible and providing access on a non-discriminatory basis to the people who want to offer new services on the network.

NEW YORK–In spite of its global popularity, Internet telephony (VoIP), which is almost free for users, has not become a gold mine for its pioneers such as Skype and Vonage.

Popular online auction firm eBay, which bought Skype two years ago for $2.6 billion, affirmed that message in a costly way earlier this week when it devalued the once-darling firm, knocking $1.43 billion off its value.

The accounting move was long anticipated.

“We are glad to see eBay admit that it overpaid for Skype and that much-hyped synergies have not yet materialized to any large extent,” said global financial services firm Cantor Fitzgerald.

“We have struggled with the economics of the Skype transaction relative to the financial expectations for the business.”

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