Fixed-line voice communications will remain predominant this year as market erosion slows, a new report on the telecoms sector has predicted. The Deloitte Technology, Media and Telecommunications [TMT] Group has issued a ‘cautiously optimistic’ view of an industry sustaining itself during 2004.
According to Deloitte, the traditional fixed-line market will continue to erode but this process will happen at a much slower rate due to continuing perceived quality and price advantages. In developed countries, the majority of minutes will still be carried over the fixed network in 2004, the company said. However, voice services will also be sold differently by the end of the year, beginning to be packaged as part of a bundle of mobile-style communications services. In the mobile sector, the continuing use of 2G networks through the year means that voice will remain as the main revenue platform for mobile operators.
"Whilst voice will remain the revenue and margin mainstay for the wire-line market in 2004 and several years beyond, much activity will be focused on preparing for life once voice becomes just another application," the Deloitte report suggests. "The principal substitute for voice as a revenue stream will be broadband, whose adoption will grow steadily in 2004."
Operators must also ensure they have a balanced strategy for Voice over IP technology, Deloitte recommended. "Whilst it is likely that VoIP will predominate at some time in the future, it will remain a niche application throughout 2004, and the industry's response to VoIP must be both measured and complete."
Interestingly, Deloitte has forecast that text message volumes will level off over the course of the year. Based on its current predictions, newer technologies such as Wap, internet browsing and MMS will all grow in 2004, but not sufficiently to compensate for the anticipated slowdown in SMS growth.
Deloitte also highlighted in its survey other added value services which it said would remain niche plays in the meantime. These include Wi-Fi hot spots, which will gradually attract what Deloitte identified as the "currently limited number" of connected mobile devices. Another related niche application will be wireless LANs which will have limited success in non-office enterprise environments such as hospitals and retail spaces.
Voice over IP will begin to blaze a trail to its likely overwhelming success, but only in terms of strategy and marketing rather than major revenue shifts. This year, Deloitte predicted that one other country – probably the US – will join Japan in boasting over one million VoIP subscribers.
By Gordon Smith