On May 15, consumer VoIP service Skype announced that calls over the Internet to conventional landline and mobile phones in the United States and Canada will henceforth be free. Until now, the charge has been about $0.02/minute for such calls.
This will push Skype competitors, such as MSN, Yahoo, and AOL, to also provide free connections to conventional phones. Because consumers are price-sensitive, this will stimulate VoIP usage. Since VoIP has value proportional to the number of VoIP users, this will make VoIP usage even more attractive. This is unwelcome news for conventional phone companies, which will continue to see their voice revenues erode.