It really amazes me how the phone companies and mobile phone providers make out that their high cost phone rates are essential to survive.

Read articles here ....

http://www.benzinga.com/22327/talk-is-cheap-skype-is-cheaper

http://online.wsj.com/article/SB125492753763570921.html

In my country, New Zealand, our major phone monopoly providers had total control of the market and once had very high costs up until July 1997. In mid 1997, the New Zealand government deregulated the controlled phone market and in the first 6 months since July '97, we saw 26 new phone (calling card) services and a few providers enter the market to compete.

One of the previous three major providers, New Zealand Telecom, before 1997 had National landline call rates at $1.01 per minute and to call the U.S. it was $1.63 per minute!

Within the first 12 months from July 1997, NZ Telecoms annual profit went from $350 million to about $600 million (by mid 1998) and then the next 12 months up to mid 1999 NZ Telecom achieved $880 million profit.

In the first 1997-98 12 months, their toll rates dropped from $1.01 per minute for national calls to under 15 cents (and kept dropping in 1998), while the $1.63 per minute to the U.S dropped to 63 cents per minute (and kept dropping considerably in 1998).

Huge competition back in 1997 and 1998 between the few major phone monopoly companies and the many new market competitors, but the profits soared because people started to use the phone to make calls!

I cannot believe for one minute how these analysts predict Skype getting on to the mobile networks will cause huge profit drops for companies like AT&T and others around the world?

In New Zealand, I cannot believe how so many people now have a mobile phone and only use it most of the time to text as they cannot afford to voice call. What would happen if calls were next to nothing cheap and people started to make voice calls?

The 1997-98 scenario of phone companies in New Zealand is only one example of what I believe Skype will do to the benefit of AT&T companies likewise around the world.

I strongly believe current mobile dominant companies are missing a huge profit, if their pricing structures were set more realistic for people to use and afford voice calls.

Steve