Mgmt 599 Skype vs at&T

In: Business and Management

Submitted By jstring
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Skype is a global player in the telecommunications industry. It offers its customers Voice-over Internet Protocol (VoIP) service, which is telephone via an Internet connection. These services include but are not limited to; instant messaging; voice calling; video calling’ short message services using a number of product platforms available at any time a user might want its services.. Skype uses the internet at its main platform leading the communication transition from hardware to software. VoIP calls are billed per amount of information sent over the Internet; Skype users communicate for free with other Skype users and pay only a small fee for long-distance calls to landlines.

Key Issues and Assumptions:

VoIP’s market share in the overall global telecommunications market is still minimal, which had a roughly 5% market share by the end of 2010. For Skype, the main issue internally is the mismatch in the relationship between revenue growth rate and company growth rate. Growth in revenue shrunk from 685% in 2006 to 37% in 2008. Skype executives have realized that the main reason for the flattening in revenue rates is the company’s cheap international calling rate and the free user-to-user calls and videos. Furthermore, VoIP is still a small competitor in the industry, but competition in the industry is increasing rapidly, and Skype needs to determine how to remain an industry leader.

There is a question if consumers will begin to look at expanded VoIP services as a real alternative. Industry experts have suggested that the growth of Internet telephony technologies will signal the demise of the PSTN - growth of VoIP and attendant decline of landline use. Skype needs to place more focus on attacking AT&T and other big companies, and implement a long-term strategy.

Analysis and Problem Identification


First and foremost, Skype needs to…...

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