1. Jonathan Christensen GM Audio Video A Brief History of VoIP

2. A long time ago…….. 1996-2001

3. © 2007 by Skype. Commercially confidential. The Pioneers  Vocaltec’s Internet Phone  Gateways: Clarent, NetSpeak, Nuera, Vocaltec, Sonus… Cisco  The Carriers: DeltaThree, ITXC, Level3  New breed of internet Codecs - wideband  The use cases gel:  End users: PC-PC “Ham radio” scenarios  Carriers: site to site “tandem” trunking  Some “mainstream” apps emerge  NetMeeting (last updated in 1999 and still in action)  2 Stage dialing: 1 800 CALL-ATT

4. © 2007 by Skype. Commercially confidential. Class 5 Switch Tandem Switch Class 5 Switch Tandem Switch TDM

5. © 2007 by Skype. Commercially confidential. Class 5 Switch TDM-IP Gateway TDM-IP Gateway Class 5 Switch TDM-IP Gateway TDM-IP Gateway VoIP Death of Distance

6. © 2007 by Skype. Commercially confidential. Tandem Trunking  Bandwidth efficiency (more compression, statistical multiplexing)  LEC - Avoid the expensive long haul lines  Incumbent LD providers could avoid termination fees at the local off- ramp because the trunk is IP..  Its an unregulated “information service”..  Arbitrage, arbitrage, arbitrage  Oh yeah.. And inferior service..  Sometimes offered under “alternative” brands..

7. Moving on.. 2001 Pulver, Vonage, and Consumer VoIP

8. © 2007 by Skype. Commercially confidential. Consumer VoIP  Pulver’s early inspiration  Min-X, the IP voice minute exchange  Free World Dialup (one port gateway)  Komodo and the first ATA  Turns any perfectly good phone into an inferior IP handset  Cisco acquires Komodo and validates the market  Vonage is born…  Voice over Broadband begins

9. © 2007 by Skype. Commercially confidential. VoBB Changes the Players / Power Structure….  Independent Vonage sets the pace early (with lots of cash)  Long distance players enter local service markets…  The MSOs respond -- with more Buzzwords and TLAs:  “Triple Play” “NGN” “IMS” and the dreaded “Quadruple Play”

10. © 2007 by Skype. Commercially confidential. What Do Consumers Get?

11. © 2007 by Skype. Commercially confidential. Great Savings? Really? And New Features?

12. © 2007 by Skype. Commercially confidential. Another Foot in the Grave…  Beginning of the end?  Incumbents match prices and features on TDM  Land line telephony is cheap.. Still... Losing to mobile..  Commoditization is complete  VoIP “export” networks are the biggest innovation  Send your ATA to India..  Location independent (death of distance – again)  Smashing the geocentric numbering plan  Further deteriorating the old voice business

13. The Summer Revolution - 2003

14. © 2007 by Skype. Commercially confidential. IM (therefore IP) IM VoIP Video Visual Sharing Rich Communications

15. © 2007 by Skype. Commercially confidential. The Summer of Skype  The stage was set.. The solution was 99% complete  Robust IP audio stack  Multimedia PCs  Broadband penetration  P2P file sharing networks running at internet scale  NAT traversal techniques  IM networks..  Skype simply closed the loop..  One application with the right formula  Users loved it.. Industry was confounded..  By fall VoN there were 500K downloads

16. © 2007 by Skype. Commercially confidential. 276 Million Users Can’t Be Wrong  Global appeal / reach  Reliable PSTN interconnect  Multitude of device options (PSP, N800, Cordless..)  Profitable..  Enter the era of rich [PC based] Internet communications  Multi-modal communications (original SIP vision)  Real time video, Data, Presence, Text, Wideband Audio  Smart endpoints, open platform…  Application innovation..

17. What’s Next?

18. © 2007 by Skype. Commercially confidential. Sorting the Mobile Mess  Mobility is the last anchor to the old way  Fastest growth telecom service today  Spectrum scarcity makes it a perfect walled garden  The good old days again  Closed networks.. Device lock-in.. Phone numbers with geographic bias.. Contracts.. YUCK !!  Finally.. The Internet goes mobile  First successful auction - 22 MHz of “700 band” spectrum  “Open Platform” conditions apply  A new game begins..

19. © 2007 by Skype. Commercially confidential. The next 10 years  The Era of Rich Mobile Internet Communications  Multi-modal communications (original SIP vision)  Real time HD video, Data, Presence, Text, Wideband Audio  Smart endpoints, open platform… Application innovation..  Fixed / Mobile Convergence – for real…  Mash ups of web based communications  Freedom with mobility…  Natural segmentation of competencies 1.Network infrastructure (pipes) 2.Application innovation (developers)

20. Questions?

21. An eComm 2008 presentation – http://eCommMedia.com for more