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June 13, 2012
Nordic VoIP Startups Challenge Skype, Telco Dominance


By David Delony, Contributing Writer


For most ordinary users, Skype (News - Alert) has become synonymous with Voice over Internet Protocol (VoIP) to the point that the company's name is as much as a “generic trademark” as Kleenex is for tissue.

Some startups in the Nordic region, however, are attempting to unseat Skype from its VoIP throne. The Microsoft (News - Alert)-owned Skype, also founded in the region, controls 25 percent of the market, and it looks like Skype's neighbors want a piece of the pie.

“Due to Skype's Scandinavian background there has been in the region a lot of focus on services that can help callers to save money,” said John Strand, founder of Copenhagen-based telecoms consultancy firm Strand Consult.

Some new VoIP services are specializing where Skype is a general-purpose service. The Finnish Alekstra is launching a global virtual mobile network service targeting corporate users in 2014. Alekstra also offers software to catch billing errors. Although accidentally overbilling for a few cents on a phone call might be annoying at worst to a typical residential customer, billing errors can quickly add up in large enterprises.

Sweden's Rebtel (News - Alert) is already successful, having signed up over 17 million people for its service. Calls to other Rebtel users are free, but Rebtel charges for calls made outside its network.

The real competitor, though, appears to be traditional phone networks. “Operators are in a state of transition where their old cash cows of messaging and voice are drying up,” Andreas Bernstrom, Rebtel's CEO, told Reuters (News - Alert).

Nordic carrier TeliaSonera will charge customers a fee for accessing voice services over the Internet instead of using its own voice network. The Dutch government banned carriers from charging fees for VoIP after KPN (News - Alert) tried to do the same thing.

KPN incidentally suffered a loss in the first quarter of 2012, which has been attributed to smartphone users preferring communication over social networks to phone calls and text messages.

Other carriers are adjusting their rates to charge more for mobile Internet use, discouraging the use of free services.




Edited by Braden Becker



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