Skype traffic soars, leaving old-school phone companies in the dust

First, a disclaimer: We are Skype users.

When it comes to calling relatives in far-flung locales, it's hard to beat the ease of Skype. It's free, usually pretty fast, and includes video, so we can see exactly what kind of sweater Uncle Frank is wearing to dinner. And according to the analytics firm TeleGeography, we're not alone.

In a paper released this week, TeleGeography reports that Skype experienced a 60 percent growth in user-to-user traffic last year. (Translation: When one Skype user chats directly with another Skype user, as opposed to using Skype to dial a regular old phone.) By the time analysts finish crunching the data, they expect Skype to have generated 54 billion minutes of international traffic in 2009, up from 33 billion minutes in 2008.

"The volume of traffic routed via Skype is tremendous," TeleGeography analyst Stephan Beckert said in a statement. "Skype is now the largest provider of cross border communications in the world, by far."

By comparison, growth in international telephone traffic has slowed to 8 percent. (8 percent sounds pretty good, yes. But as TeleGeography notes, over the past quarter century, international call volume on telephones has grown at a compounded annual rate of 15 percent.)

Mexico, for instance, is the world's largest calling destination. But calls to Mexico declined 4 percent in 2008, perhaps an effect of the sagging global economy. "Demand for international voice has been remarkably robust, but it’s clearly not recession-proof," Beckert said.

As Amy Farnsworth Nagel pointed out last year, Skype's success is based partly on its broad appeal. "Some music and foreign-language teachers rely on the software to instruct students in distant or remote areas. Businesses strike international deals by videoconferencing. Students studying abroad can keep in touch with family free of charge," she wrote.

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