As recently as 2005, voice revenues represented 73 percent of total revenues. +
By 2013, voice had dropped to just 43 percent of total revenues.
And voice revenues undoubtedly are headed lower still.
Some service providers might already be earning a third of total revenue from voice.
And by some estimates, voice might represent 28 percent of total industry revenue by about 2015.
To be sure, Insight Research projects that U.S. telecommunications service revenues will continue to grow from 2013 to 2018.
But voice revenue will continue to decline at -4.81 percent compound annual growth rate from $163 billion in 2013 to $127 billion in 2018, Insight Research predicts.
Mobile voice—which peaked at $118 billion in 2008—will decline at -3.82 percent CAGR to $84 billion in 2018. Fixed network voice will drop even faster, at a negative 6.56 percent CAGR from $61 billion in 2013 to $44 billion in 2018.
Voice lines in service obviously will mirror those declines.
Changing communication preferences explain much of the change, but so does changing technology, namely VoIP.
Normally, when prices for a product in demand fall, usage grows. Given mandatory reductions in roaming costs in Europe and continued pressure on retail calling rates (international and domestic), one might expect call volume to grow. Typically, volume does grow as prices drop.
But changes in the demand curve can wreck havoc on the expected trend. As it turns out, people now prefer other modes of communication.
The average length of a local call has fallen more than 50 percent over the last decade to 1.8 minutes, according CTIA-The Wireless Association.
And consumer email traffic fell nearly 10 percent between 2010 and 2012, according to Radicati Group.
Over the top messaging, meanwhile, is growing at triple-digit rates. WhatsApp recorded an all-time high of 10 billion outgoing messages in a single day in June 2013, which equated to an average of more than 30 messages per user per day, according to Stephen Sale, Analysys Mason principal analyst.
“We estimate that the total volume of messages sent from mobile devices via IP services exceeded the volume of SMS messages for the first time in 2013, at more than 10.3 trillion compared with 6.5 trillion worldwide,” said Sale. “Messaging volumes associated with OTT services are expected to almost double in 2014 and will reach 37.8 trillion messages sent in 2018.”
That is having an impact on voice revenues and usage as well, at least in many markets.
Sometimes, even dropping the price of a product, which would be expected to produce usage growth, does not work quite that way. That is the case when overall demand for a product declines.