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State-owned telco bans voice-over Internet protocol calls on mobile phones after revenues drop

There was a time when telecommunications carriers were practically quaking in fear at the prospect of Internet telephony. The disruptive potential of such web-based voice-over-IP (VoIP) services as Skype was reflected in that company’s $2.5 billion acquisition by eBay in 2005 (the online auction giant has since sold Skype off).

That disruption has not come as quickly as some anticipated, but it is still under way, and IP-based telephony services have found a new lease of life on the mobile web. Telecoms providers are not out of the woods yet.

Life is rather simpler for Egypt’s state-owned incumbent telco, which controls the country’s mobile infrastructure. Shortly after reporting a 13% fall in annual revenues in March 2010, Telecom Egypt simply banned international VoIP calls made from mobile devices altogether.

The ban affects the country’s main three mobile operators – Mobinil, Etisalat Egypt and Vodafone Egypt – all of which offer Internet access via mobile phones and USB dongles.

Skype responded with a warning that restricting such services, as Oman and the United Arab Emirates have also done, would not be effective in the long term. “In general, we believe that it should be up to consumers, not regulatory authorities, to choose the winners and losers in the communications space,” the company wrote in a statement. “That is what happens in competitive markets.”