Voice Traffic Moves to Mobile

• Posted: Friday, April 06, 2007
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• Author: pradhana
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• Filed under: Market Survey

The global migration from landlines to mobile phones isn't guaranteed to enrich mobile carriers, according to the "Fixed-Mobile Substitution in Western Europe: Causes and Effects" report from Analysys.

Fixed-mobile substitution (FMS), also known as wireline displacement, has been underway for several years, and it is expected to continue worldwide, especially in countries where installing wireline telephony is difficult due to geography or regulations.

At the current rate of FMS, 50% of all voice traffic will originate on mobile phones by 2008 in Western Europe.

That's not automatically good news for mobile phone service providers, though.

"FMS is generally seen as a threat for fixed operators and an opportunity for mobile operators. However, while fixed operators' voice call revenue is falling substantially due to FMS, not all mobile operators are seeing revenue gains as a result," said Dr. Alastair Brydon of Analysys. "To avoid declines in voice ARPU, mobile operators need to achieve significant increases in usage to compensate for price cuts, and some operators are doing much better than others."

Using discounts to induce FMS is a potential pitfall.

In Finland the proportion of voice traffic originating on mobile phones rose from 55% in 2004 to 70% in 2006. At the same time, net ARPU fell, because while per capita mobile usage increased by 23%, discounts dropped the average spend per mobile minute by 34%. [eMarketer]

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