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Fixed voice disappearing rapidly in many European markets

30 July, 2007
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Fixed voice disappearing rapidly in many European markets

globaltelconews-admin by globaltelconews-admin
30 July, 2007
in English
0

Fixed–mobile substitution (FMS) continues its relentless progress and shows every sign of accelerating – particularly in those countries that have experienced the most traffic migration already – according to a new report, The Acceleration of Fixed–Mobile Substitution in Western Europe: facts and figures, published by Analysys, the global advisers on telecoms, IT and media.

“In many markets it looks as if fixed voice is going to suffer not the slow and lingering decline many have predicted, but a rather rapid one,” says report co-author, Dr Alastair Brydon. “At the current rate of traffic migration, 90% of all voice minutes in Finland will originate on mobile phones by 2008.”

Key findings from the new report include:

  • In five Western European markets, more voice minutes originate on mobile networks than on traditional voice and broadband networks combined.
  • VoIP appears to have little impact on the migration of voice traffic to mobile networks. Paradoxically, it appears to release consumer cash for additional spending on mobile services.
  • Finland had the highest level of fixed–mobile traffic substitution in Western Europe in the fourth quarter of 2005 – mobile-originated calls accounted for 64.6% of voice traffic. However, the country also experienced the greatest increase in this proportion during 2006, by 10 percentage points, to reach 74.6% in the fourth quarter of 2006.
  • Traffic substitution is also progressing rapidly in markets that have previously undergone little FMS. Germany has experienced much less traffic substitution than the Western European average; only 17.5% of its voice traffic originated on mobile phones in the fourth quarter of 2005. However, this proportion increased by 6.8 percentage points – one of the highest increases in Western Europe – to reach 24.3% in the fourth quarter of 2006.

“The widespread introduction of home-zone tariffs in Germany is having a significant effect, which demostrates that mobile operators’ actions can significantly increase usage,” says co-author Dr Mark Heath. “Following years of usage stagnation, average outgoing mobile voice usage per subscriber increased by 23% during 2006.”

“What is particularly worrying for fixed-line operations is not that FMS is happening, but the pace at which it is happening,” adds Rupert Wood, principal analyst at Analysys Research. “Of course, fixed-network operators are looking to different sources of revenue for growth, but the accelerating decline in core voice revenue is damaging at a time when they are embarking on long and expensive next-generation network re-engineering programmes.”

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