Voice Communications Set to Decline in Two Years – Analysts

Analysts Predict Dramatic Increase of VoIP Popularity

by Anton Shilov
11/22/2009 | 11:34 AM

Mobile voice service revenues are on a trajectory to reach their peak in 2010, after which they are likely to start declining, according to the latest forecasts from ABI Research.

“Mobile voice has had a meteoric rise since digital cellular networks such as GSM were deployed in 1992. ABI Research forecasts annual mobile voice revenues to reach $580 billion in 2010. From 2011 on, rising subscriber saturation will increasingly erode mobile voice revenues, not just in developed markets but also in a number of emerging markets. By 2014, mobile voice revenues will have contracted by 9.6%,” vice-president for forecasting Jake Saunders comments.

While mobile operators have received a substantial boost from value-added services such as messaging and mobile Internet, competition is squeezing margins for a variety of services and carriers. Total mobile data services should generate $169 million in 2009 and will grow at a CAGR of 9% until 2014.

 

By the end of 2009 the declines in annual average revenue per user (ARPU) will have been felt most severely in Asia-Pacific (-8.7% to $105) and Africa (-7.8% to $134). ARPU in 2009 in North America will have contracted, but only by -0.6% to $526). Mobile Internet revenue ($52) from use of smartphones, netbooks, etc. will help to prop up overall service revenue for the region.

Wireless capital expenditure, on the other hand, shrank 5% in 2009 to $132.5 billion. The global recession was widely felt in all parts of the world. Saunders

“As handset sales plummeted in 4Q-2009, end-users did not return their handsets nor did they put their handsets aside and refuse to use them. They did, however, try to cap tariff plan usage. Carriers therefore held up a number of CAPEX-related projects to free up some cashflow,” noted Mr. Saunders.

As the economy has stabilized in the second half of 2009, carriers have started to resume capital expenditure. Key areas of spending are core network and radio access network upgrades to support higher data throughput.