SKYPE. Is it hype? Or does it spell the end of life as we know it for BT, the mother of all privatisation stocks? Internet phone technology may revolutionise person- to-person communications. E-mail has transformed the way people write and web-phones could change the method, if not the manner, of how we speak to each other.

Devotees of internet telephone technology are not short of expectations. EBay, the online auctioneer, is sufficiently optimistic to fork out £2.2 billion to buy Skype this week. And Skype, although rapidly becoming one of the best-known companies that offers voice-over-internet services, is far from the only enthusiast. Google, the internet search engine, is scrambling for a share of the pie. So are a slew of greater and lesser-known others, including AOL, Yahoo, Wanadoo, Vonage, and Microsoft’s MSN.

So is our very own BT. It is all too easy to assume that BT will lose business as upstart web-phone rivals gain ground. But this analysis ignores two simple but important facts. The first is that BT is actively exploring opportunities in internet telephony. The second is that all web-phone services rely on consumers having broadband internet access and BT hooks up more people in this country to the speedy internet network than any other telecoms company.

Web-phones may eclipse conventional fixed-line services of the sort offered by BT. But as long as BT adapts and embraces the new technology it will survive.

It may thrive. Gavin Patterson, group managing director of BT’s consumer products division, says: “Rumours about the demise of BT because of the emergence of internet telephony are much exaggerated. In fact, it provides a fantastic opportunity for us to transform our business.”

Yes, he would say that wouldn’t he? But internet telephony may enable BT to replenish its armoury of commercial weapons. Some say that internet telephony undermines fixed-line telecoms, but it may give long-established players a new lease of life.

More and more people pick up the mobile phone if they want to speak to one another. It would not occur to younger people that they should install landlines to make ordinary phone calls. Cheap as chips internet telephony could make mobile-only phone consumers think again. If it is possible to combine cheap speech with cheaper video and access to all web data, the lure of the landline may be enlivened.

Inertia is also on BT’s side. It is relatively simple to download the software needed to join the internet phone brigade. If the price advantages are obvious, it ought to be easy to persuade friends and relations to do the same. The most money is saved by those who create their own mini- networks. But consumers still have to take action — and however low the hurdles, hurdles are off-putting.

Technophobes will be fazed. If moving to internet telephony means changing telephone numbers, the “can’t be bothered” constituency will grow. BT’s brand, meanwhile, might aid consumer acceptance of new services such as sight-with-sound telecoms.

Increased competition will put pressure on BT’s profit margins. But competition is just the sort of invigoration the leviathan needs.

There is more to Skype than hype. Handled wrongly, or foolishly, internet telephony could represent an uncomfortable bundle of straw on BT’s camel-like back. But of itself it need not break BT.

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