Cisco's Skype Plan May Chill Telcos
NEW YORK (TheStreet) --A year ago, Cisco (CSCO) - Get Report chief John Chambers said "the way to communicate is video." Since then, Cisco has been eager to make that happen.
In a world convinced that video calling is the future, along comes Skype, liberated from
eBay
(EBAY) - Get Report
and on its way to an IPO, unless Cisco can provide a detour.
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To be sure, the
would catapult Cisco into the mass market of video communications. But the overriding question is how Cisco -- one of the prime networking equipment suppliers -- would adapt to the job of global service operator.
Put it this way. Skype would make Cisco the world's largest Internet calling service and put it in direct competition with its own telco customers like
AT&T
(T) - Get Report
and
Verizon
(VZ) - Get Report
, to name a few.
Clearly with
(GOOG) - Get Report
putting free Net calling service on its Gmail last week, and
Apple
(AAPL) - Get Report
set to
expand FaceTime
its video calling service Wednesday, the so-called battle lines in telecom are starting to be redrawn.
Cisco is no doubt eager to grab Skype's massive worldwide consumer network to complement its WebX and Telepresence video conferencing services to business customers.
Cisco also has Cius, a big tablet plan to turn old-fashioned desk phones into touchscreen video consoles
in the business market.
Still, while Skype might fit Cisco's video strategy like a glove, it can't help but be seen as a serious face slap to all the phone companies that buy Cisco gear.
--
Written by Scott Moritz in New York.>To contact the writer of this article, click here: Scott Moritz.>To follow the writer on Twitter, go to http://twitter.com/TheStreet_Tech.>To submit a news tip, send an email to: tips@thestreet.com.
