Vanishing Voice Revenues


The incumbents world wide are facing a difficult time, according to research firms, Gartner and In-Stat. They are caught between a rock and a hard place. A whole generation is leaving behind wireline voice and switching to a wireless only lifestyle. On the other hand, VoIP is having a deflationary effect on prices, and is siphoning off dollars from the wireline revenues.

In-Stat predicts that the US wireline revenues are going to decline 3.3% annually up through 2009, and even the broadband sales may not be enough to make up for the losses in the consumer wireline voice revenues. “Voice services, which have experienced persistent pressure from wireless alternatives, are increasingly being challenged by VoIP solutions,” says David Lemelin, In-Stat analyst.

I am not sure, if entirely agree with these conclusions, because right now Bells are selling low-cost plans. They can increase prices, which they might when they have premium speed offerings. There is enough evidence that the consumers are happy to happy for higher speeds. And with the most recent wave of consolidation in the US service provider industry, the Bells will come out even, because of their wireless holdings.

The big x-factor in this whole equation is cable – which is doing a good job of their triple play offerings. Of course, they never complain about Skype and other VoIP plays, because ultimately those offerings siphon off voice dollars from the Bells, and also attract customers to their higher capacity (and higher margin) broadband access offerings.



My biggest complaint as a consumer with SBC is that they don’t allow you to have a “naked” DSL line. They bundle it with the phone line as well, which I don’t use, but have to pay extra dollars for that. I think analysts should take this into consideration, when calculating costs and comparing DSL offerings with cable ones. With these sales tactics, telcos can’t get customers loyal. When the time is right I will abandon SBC without any doudbts.

Om Malik

i think most of the analysts are being cautious. also we might see a big transtition in the incumbent’s own networks/offerings as well. i bet there is a bit lethargy amongst consumers as well.

i personally have a SBC connection for not voice reasons – my buzzer won’t work on a mobile/voip line. i never use it for any reason but it is still a $18 a month penalty.

Dennis Evans

That’s only 2,000,000 per year at that miniscule rate it will take 17 years to get a third of the residential lines.


CABLE VOIP====its ramping and its RAMPING BIGTIME!!! Today alone, 80,000 Cable Service Techs HIT the streets and made an average of 8 service calls today alone making 640,000 POTENTIAL SALES leads/installs of VOIP======Today, they landed 8000 today and will land another 8000 tomorrow! AND the next day===40,000 per week that the RBOC’s are losing=======its a NO WIN game for the RBOC’s! And once Level3 unleashes the ””Clearinghouse/Processing PLANT”” of peering on VOIP partners, the CABLES have another COST advantage!

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