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Mobile Now is the Preferred Way for Consumers to Use 'Voice'

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January 17, 2012

Mobile Now is the Preferred Way for Consumers to Use 'Voice'

By Gary Kim, Contributing Editor

One of the reasons I rarely spend much time or effort analyzing voice traffic behavior is because, though it is an important topic for many in the communications business, it has been almost a decade since “voice” was a strategic driver of revenue growth in the consumer markets, however important new forms of voice are in the business markets.

In the international long distance arena, for example, prices have been falling steadily for more than a decade. Fixed lines are falling in most developed countries and people are using product substitutes, including messaging, social networks and email, to a greater degree.


It is worth remembering that where there once was a big, independent long distance industry in the United States, that whole industry segment has vanished. “Long distance” also has ceased to be an important product category for mobile voice, and a lesser revenue generator for fixed line voice.

That is less true in the business market, where a variety of voice-related products continue to be more relevant.

But, overall, voice in most forms is becoming a component of a consumer service, providing key value, but less actual revenue.

The other trend is that we now are at the point where mobile-originated and mobile-terminated voice has become the preferred way of consuming voice services, according to TeleGeography (News - Alert).

We are far from voice becoming strictly a feature or attribute of service, rather than the driver of revenue, but that is the clear direction.

The only area where a reasonable case can be made for long distance voice profit margin, for example, is mobile-originated international long distance. And even that will start to change now that fourth generation networks and smart phones are becoming more prevalent, allowing people to use third-party, over the top calling services.

There are some salient exceptions, of course. Voice remains key for Skype (News - Alert), which is the best example of a pure-play international long distance company these days.

And cable companies have, over the last decade, made serious inroads into the fixed line voice market, with voice services being a key revenue source, after broadband access. But it is pretty hard to argue that voice, for most providers, and most in the consumer markets, is “tomorrow’s business.”

As mobile has become “today’s business,” in the future it is possible that even the voice business will be lead by mobile users rather than fixed line voice. We seem already to have passed the point where call volumes are lead by fixed line voice, for example.

Though voice revenues will remain substantial for some time, we are heading for a moment in time when, in many markets and segments, revenue is dominated by broadband-based services, including both television and broadband access. In many cases, that point already has been reached.

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Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Rich Steeves

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