Is Voice Dead?

By Gary Kim March 15, 2013

Though the speed of the change is going to change from region to region, many now would agree with the notion that in many countries and markets, voice is becoming a feature, not a product with a tariff or a specific retail price.

The trend is not always obvious, in all markets, because global telecom revenue is growing. According to Insight Research Corp., telecommunications services revenue worldwide will grow from $2.2 trillion in 2012 to $2.7 trillion in 2018, at a combined average growth rate of 3.8 percent.

But that figure includes many distinct sources, fixed and mobile, video, data, voice, data services and many distinct geographies. Europe now is the poster child for voice revenue decline.

The European telecom service market decreased for the third year in a row, by 1.5 percent, the European Telecommunications Network Operators Association reports.

For such reasons, service providers in Europe have more reason than most to confront the growing possibility that voice will rather soon cease to drive a significant amount of service provider revenue.

That is one reason why one hears the phrase “voice is dead.” In at least some markets, sharply declining voice revenue is a reality. Revenue does not have approach zero, or close to zero, to have serious ramifications.

In a less direct way, the phrase also might refer to the fact that people use other methods to communicate. That also can have revenue implications, as when Internet apps displace both voice and messaging.

On the other hand, in many cases, the good news is that voice is no longer a significant driver of service provider cost, either. If voice and messaging are to remain essential functions of communications service, but won’t drive much revenue, the cost of providing voice and messaging has to be commensurately low.

Some would say the voice business is “rapidly collapsing,” at least in Europe, with fixed revenue possibly halving between 2010 and 2012.

That might not be as dire an outcome as you might think, since in at least some cases, revenue for providing voice services is hidden or buried or bundled with data services or other elements of service.

Edited by Rachel Ramsey

Contributing Editor

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