Global fixed voice revenue is set to drop from US$418billion during 2008 to US$309 billion by 2014, according to Ovum’s latest fixed voice forecasts.
Ovum’s Australian based analyst, Nathan Burley, said that despite pressure to de-prioritize legacy services, fixed voice should not be ignored.
During 2008, revenues from fixed voice equated to 63% of that derived from mobile voice. By 2014, fixed voice revenues will still amount to 40% of mobile voice revenues, which will also be declining by that time.
“Fixed voice lines and revenue declines will vary by market, driven by various factors including differing levels of Fixed Mobile Substitution (FMS), VoIP substitution, operators’ strategies, cultural behavior, economic conditions and existing telecoms infrastructure,” Burley said.
Ovum predict that in the near term broadband-led and mobile access substitution will cause further declines in fixed voice channels.
Substitution from VoIP and naked DSL will also continue, although this effect will vary substantially from country to country, depending on the commitment larger players have to VoIP services, and on whether or not Naked DSL has been mandated by national regulatory authorities.
Initiatives such as bundling and subscription based pricing packages implemented to try and stave off fixed voice declines have now reached their peak effectiveness, Ovum warn.
“Additionally, some broadband FMS - especially at the low-end - has begun, as wireless broadband alternatives gain more traction.
Future upgrades to mobile networks could allow mobile operators to attract more fixed broadband users to their mobile broadband offerings, which is why it is imperative that fixed operators embrace next generation broadband in order to maintain their advantage in this market,” said Burley.
FMS growth is slated to continue at a steady rate, while the converging trend in the price of the mobile and fixed voice minutes will result in users continuing to use mobile telephony even when they are within reach of a fixed line.
“As a result, we expect call substitution to continue to grow at a greater rate than access substitution,” Burley added.