Monday, July 02, 2007

Voice Revenue is Declining

From a article on Sprint's WiMax 4G plan:

"Revenue from plain-vanilla cellphone calls is eroding, and carriers must bet on wireless data to drive growth."

Gary Kim has been saying (in his keynotes, blogs and articles for over 18 months) that voice revenue was declining.

It's a mad rush to make up the declining voice revenue with data. (Tough to do with $10 DSL). Telcos don't want to be dumb pipes with other companies (Web 2.0, social net sites, apps, Google & YouTube) making all the money off their investment. Hence, the walled garden approach to cellular data - and $60 for EVDO service.

That means as an ISP, you can either provide the unfiltered dumb pipe or you can add Layer 7 to grab some of the app revenue.

The really bad thing that could happen is we windup being just providers at the pipes that allow those things to be created. Those things get created by other parties that are not affiliated with you a business sense and you don’t capture much of the revenue from it. So, it’s a huge challenge, it faces all service providers not just the CLECs and it’s an issue we’re going to be facing for the rest of our professional career, that’s very clear. [Gary Kim in an interview]

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