Future Market Value of Voice, Storage: Exactly €0

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Reflections

Reflections

The ongoing debate on net neutrality among mobile phone carriers is amazing, and shows just how nonfunctioning that market is. I’m referring to whether they will “allow” telephony over IP and mobile internet, bypassing the SS7 standard telephony stack.

The future market value of voice calls — any voice calls — is exactly zero. And it would have been the current market value if the telecom industry hadn’t been so overbroken and oligopolized.

Same thing with future market value of storage. It, too, is exactly zero. According to every market law we know.

Of course, you can’t sustain a business selling something for more than the market value. Therefore, the mobile telecom carriers need to rethink their business model entirely. I’m predicting that the Asian model of budget carriers will soon arrive in Europe and do to the mobile carrier industry what budget airlines did to the airline industry (hint: slashed prices by about 90%).

The actual market value of voice calls, any voice calls, have been zero since 2005. That’s five years ago. How do we know this? It’s based on two undeniable facts:

One, the market price for something is the cheapest seller’s price. On a functioning market, that’s the price.

Two, while mobile carriers are still preoccupied charging about €1 per minute on some lines, Skype has been providing voice calls for exactly €0 per forever since 2005.

Now, one could argue that Internet connectivity is a precondition for making those free phone calls through Skype, and one would be right. Maybe the price wasn’t zero in 2005, or maybe it was just zero if you already had Internet connectivity.

So, do you see a future world where everybody doesn’t already have Internet connectivity?

Meaning, the current theoretical and future practical market value for voice calls is exactly zero.

Meaning, in turn, that the mobile carriers had better rethink their business model, fast. (Not to mention the landline phone companies. Anybody still uses telephones with cords attached to walls?)

On a separate topic, that also means that law enforcement will see their coveted “lawful interception” (read built-in and systemized wiretapping) go up in a puff of magic smoke as the end users take control of the actual voice app, which will also certainly have end-to-end encryption. More on that later in a separate blog post.

Going back on topic, the same thing applies to online storage. Anybody recalls the webmail wars between Hotmail (hotmail who?), Gmail and Yahoo (yahoo who)? They were competing with how much online storage every (nonpaying) user would get.

Yahoo ended the wars by giving everybody infinite storage. That means the market price for online storage is €0 per infinity, which again amounts to exactly zero.

We’re seeing a continuation of this revaluation with public dropboxen such as RapidShare and similar. The market price of online storage is still zero. Even though in some cases it’s €0 per 20 gigabytes, that’s still the same end number as Yahoo’s €0 per infinity.

Chris Anderson uses the Yahoo example in his book Free!, and the same market laws increasingly apply to voice calls as well.

Telecom industry and SS7, get out of the way. The swarm is building a voice infrastructure without a central point of control.

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About The Author: Rick Falkvinge

Rick is the founder of the first Pirate Party and is a political evangelist, traveling around Europe and the world to talk and write about ideas of a sensible information policy. He has a tech entrepreneur background and loves whisky.

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