As a firm specialising in market research and data analysis, we bring valuable insights to the forefront of today’s article, focusing on the usage of fixed telephone lines in today’s telecommunications.
Growth in fixed telephone lines has stagnated or even turned negative in most African nations as mobile penetration has increased. South Africa alone experienced a decline in fixed telephone lines of 39.48 percent that went down from 3.35 million in 2018 to 2.02 million in 2019.
Shift to data-centric services
In Botswana, the fixed voice stream is reported to be a significant contributor to the overall revenues of Botswana Telecommunication Corporation (BTC). However, the revenue proportions of the three main lines have started to sway towards fixed data and mobile, with fixed voice now trailing the pack at 29 percent and broadband taking the lion’s share at 35 percent of total revenues. This is in line with global expectations brought about by customer trends of switching to newer and cheaper alternative products with lower margins, i.e. the shift from fixed line to data-centric services.
There is less and less voice traffic being transmitted over conventional landlines as more and more people are utilising alternative forms of communication, such as IP-based (Google Hangouts, Skype), app-based (Whatsapp, Snapchat, Facebook Messenger, Viber, to name a few), or simply plain old-fashioned SMS texting. In place of teleconferencing, businesses have moved to Teams, Zoom, and Google Meet, among others.
Reduction in BTC revenue
Infact, on-net fixed telephone domestic calls traffic (fixed to fixed telephone calls) declined by 1.5 percent, from 14.1 million minutes registered in the fourth quarter of 2022 to 13.9 million minutes. These domestic calls include household and business calls.
On the other side, off-net fixed telephone domestic calls (fixed to mobile telephone calls) traffic increased by 1.7 percent, from 23.7 million minutes in Q4 2022 to 24.1 million minutes. For BTC and other operators, this translates into a loss of revenue. According to their annual report, BTC ended the year 2022 at P405.0 million in revenue from fixed voice streams. This was a slight reduction when compared to the prior year where the segment’s revenues were P407.6 million, hence a drop of P2.7 million year-on-year.
International outgoing fixed telephone call traffic decreased by 7.7 percent in Q1 2023, from 1.0 million minutes in Q4 2022 to 0.9 million. Outgoing international mobile telephone call traffic also decreased by 8.9 percent in Q1 2023, from 4.1 million minutes recorded in Q4 2022 to 3.8 million minutes.
Due to the already stated shifting customer preferences, coupled with increasing competition and telecommunication industry regulation, the overall compound annual growth rate (CAGR) declined by 6.7 percent between 2018 and 2022. Globally, fixed-line subscribers are projected to continue dropping by 1.4 percent yearly.
New technologies like VoIP rising
There is a shift to new technologies like VoIP (Voice Over Internet Protocol), a phone technology that allows you to make and receive phone calls using the Internet instead of traditional phone lines. This calls for telcom companies to research more on how they can adopt such technologies and develop appropriate solutions for their customers, given the market dynamics.
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