Though the trend is not always quite so obvious in the U.S. and Canada telecom markets, erosion of fixed network voice lines is assuming alarming proportions in some markets, including the United Kingdom.
Some 65 percent of 500 U.K. chief information officers surveyed by Vanson Bourne on behalf of Virgin Media (News - Alert) Business believe fixed network telephones “will disappear from everyday use within five years,” Virgin Media Business says.
Separately, analysts at STL Partners estimate that, with 2009 representing an index point of 100, U.K. fixed network voice revenue will have shrunk by 50 percent by 2014. Keep in mind that this is an estimate that use of fixed network voice lines will be cut in half in just five years.
That wouldn’t be an unusually damaging occurrence, if new revenue sources can offset the losses. But STL Partners says new data services will fail to keep pace, with a net overall result of declining fixed network revenue of possibly 24 percent by 2014, compared to 2009.
If those opinions wind up being correct, whether the magnitude or timing of the changes are accurate, there will be huge shifts of opportunity for suppliers of voice services, unified communications, business phone systems, mobile and fixed network service providers alike.
Obviously, voice will become--even more than it already is--the preferred way for people to use voice services. The only real surprise is that this could be true for enterprise employees, not just consumers.
Of course, for every “loser,” included fixed network telcos or suppliers of premises-based business phone systems, there will be “winners,” including mobile service providers and possibly some providers of unified communications services.
Call center functions obviously will continue to require a high level of voice and unified communications support. But collaboration functions could shift to other media types, for many other enterprise workers.
But if the CIOs are accurate, business voice rapidly is shifting to mobile modes, for most workers, with obvious architectural implications. By the end of 2012, 70 percent of the U.K. population is expected to have a smart device reliant on mobile connectivity, Virgin Media Business argues.
Already, in the past year the amount of data consumed on the Virgin Media Business network jumped to 765 billion individual bits of data being transferred every second, erasing the previous mark for the Virgin Media Business network by 27 percent, Virgin Media Business says.
Historically, one might have argued that the higher cost of mobile calling would make it an unlikely substitute for fixed network calling. But the differences are shrinking.
The wholesale price of calling mobile phones from a landline is set to fall 85 percent by April 2015, according to the U.K. Competition Appeals Tribunal.
The Ofcom decision to reduce mobile termination rates will mean an estimated caller savings of about £800 million. Mobile termination rates could mean the cost of calls, on a per minute basis, would fall from 4.18p to just 0.65p.
The big problem in the U.K. fixed network business now appears to be that the legacy voice business is declining faster than the broadband access business is growing.
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Edited by Brooke Neuman