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International Voice Traffic Grows, But Revenue Trend is Unclear

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February 13, 2013

International Voice Traffic Grows, But Revenue Trend is Unclear

By Gary Kim, Contributing Editor

New data from telecom market research firm TeleGeography shows that international telephone traffic grew 5 percent in 2012, to 490 billion minutes.

Whether or not revenue actually is growing is the bigger issue, some might say. Surprisingly, it is very hard to answer the question of whether international long-distance revenue, as opposed to call volume, is growing, remaining the same or declining. 

Overall, one might argue that international long-distance revenue is flat. Greater call volume, and lower per-unit prices, probably means aggregate global revenue is about flat.

But it is hard to say, as few researchers seem to track fixed network voice revenue too closely. Average revenue per user seems to be dropping in most developed markets, though.

International migration, the rapid uptake of mobile phones in developing countries, and steady reductions in international call prices—especially in the form of flat-rate (and even free) calling plans—have contributed to traffic increases, TeleGeography (News - Alert) says.

Nevertheless, recent growth rates are well below the 13-percent average that carriers could count on to offset price declines over much of the past 20 years.

While international traffic growth is slowing, traffic from over-the-top applications and services is growing fast. TeleGeography estimates that cross-border Skype (News - Alert)-to-Skype voice and video traffic grew 44 percent in 2012, to 167 billion minutes.

This increase of nearly 51 billion minutes is more than twice that achieved by all international carriers in the world combined, TeleGeography says.

If Skype’s traffic was added to the volume of international phone calls, international voice traffic would have grown 13 percent in 2012, in line with historical trends. But that’s the problem for service providers selling legacy voice services; volume growth increasingly is related to revenue in a non-linear way.

People still value calling internationally, and do so at high rates. But service revenue is not directly generated by such volume increases.

Edited by Braden Becker

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