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International calls slowing

When I took off for foreign countries in the ’70s and ’80s, I said good-bye and knew that I would not hear my family’s voices til my return—again unless somebody died. Foreign phone calls used to be an extravagance, something akin to watching movies in your own home.

Now I see from Telegeography that international calls have grown from fewer than 18 billion minutes in 1986 to nearly 300 billion (updated #) in 2006. But now the growth is slowing. Why? Skype.

According to TeleGeography estimates, Skype generated approximately 14 billion minutes of international traffic in 2006. “Skype only accounts for a small share of international calls. But they’re generating enough volume to have a clear impact on the growth rate of traditional calls,” said TeleGeography analyst Stephan Beckert.

He predicts that slower growth will hurt carriers and lead to consolidation. Does this mean prices will rise? Not with players like Skype around.

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