Only 70 percent of households in Marshall County, Indiana have landlines in 2011, a figure that is expected to decrease to 50 percent in the next two years. That statistic is one important facet of the voice services business: people simply are starting to use their mobile devices as their primary “phones.”The other important angle is less usage of voice communications overall, on both mobile and fixed connections. According to Nielsen, the average number of mobile phone calls we make is dropping every year, after hitting a peak in 2007. And our calls are getting shorter: In 2005 they averaged three minutes in length; now they’re almost half that.
Also, in part because of the prevalence of VoIP services, unit prices are under pressure. Servive provider executives are no dummies. They know all that, and already are moving ahead with initiatives that will replace lost revenue and still provide a growth path.
But there are lots of thorny, practical issues. Consider investment. How much should a rational executive invest in a declining business? How much should it try to innovate? What is the balance between support for growing businesses and networks, and declining businesses? When does network investment become stranded? What should executives do about all that?
But there are lots of thorny, practical issues. Consider investment. How much should a rational executive invest in a declining business? How much should it try to innovate? What is the balance between support for growing businesses and networks, and declining businesses? When does network investment become stranded? What should executives do about all that?
