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 expensive fillip for Telkom’s coffers, were now free.

Microsoft made its largest ever acquisition in May 2011 and bought Skype for a gobsmacking $8.5bn. It seemed like folly then, and more so now, given the recent declines in its quality of service and general lack of innovation.

In many huge mergers, where firms are expected to assimilate into a new culture and adopt the priorities of their new overlords, the recently bought start-up tends to lose the plot for a while.

Skype used to be far more reliable than it has become lately. From being a regular Skype user, I’ve dropped it in favour of Apple’s FaceTime and more recently WhatsApp and WeChat calling.

Like Telkom, the erstwhile voice and landline incumbent, Skype, the VoIP incumbent, has seen its fortunes flipped by new upstarts that are sowing the fertile new markets ploughed by Skype and before it by the old-style business it disrupted.

With a text chat service during the early days that was as superior as its voice offering, Skype would swallow up Microsoft’s own messaging app in 2013, the clumsily named Windows Live Messenger, originally called MSN Messenger and an icon of the early days of the Internet.

This month Skype unveiled what many in the industry think is the next big thing: chatbots. These software robots will use text-based messaging to interact with customers, like a call centre agent would, I guess. These include a travel bot, another to book tickets to sports events and a SpockBot to "learn the ways of Vulcan logic".

Skype, like Telkom — which has its own sci-fi-themed link, via a Star Wars association, having sponsored the reboot of the iconic film last December — is facing competition from the very new businesses its trail-blazing disruption enabled. That’s what irony means.

Shapshak is editor-in-chief and publisher of Stuff magazine. Follow him on Twitter: @shapshak

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