Fixed-line revenues shrinking
From this study the IDC predicts that the eight countries used in the study (Lithuania, Czech Republic, Estonia, Hungary, Latvia, Poland, Slovakia and Slovenia) can expect total fixed lines to dip at an annual average rate of 1.2%.
Total fixed lines will fall from 22.7 million to 21.4 million in the next five years. The revenue from fixed line telephony will drop from $6.12 billion to $4.97 billion over the next five years.
The result of decreases in the fixed-line telephony market means that telco’s operating in this sphere must adapt or die. Telkom is facing similar challenges in South Africa, but while they have a monopoly on certain telecommunication services they may be able to protect most of their fixed-line telephony revenue.
But eventually Telkom will have to decide whether they protect their own pocket to the detriment of South Africa as a whole.
According to the IDC, broadband internet access is a key growth area in the fixed-line telecoms markets and could prove to be the saving grace of telecoms companies.
Growth in fixed-line data revenue could help offset the decline in revenue for fixed-line voice for the CEE countries plus it will serve as an incentive for customers to keep their existing fixed lines maintaining the customer base.
In the South African telecoms environment voice service are still Telkom’s big money spinner bringing in billions of Rands in profit. But other competitors are entering the market which may bring down costs and allow international trends to take their natural course in South Africa.
The true impact of the SNO’s and Sentech’s goals of entering the voice market will all depend on the effectiveness of these companies in entering the market as well as their desire to compete aggressively on price or whether they plan to merely play in this arena.
Only time will tell but if South Africa follows international trends data traffic is the future of global telecommunications and anyone not playing in this arena will be left behind.
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