Thursday, December 31, 2009

Disturbing Wireline Trends

There's a lot of disturbing trends in telecommunications, especially for wireline carriers.

First off, Pay close attention to the FCC docket about moving the PSTN to an All-IP Network. Ma Bell has a 32-page filing (thanks, GigaOm), where Ma Bell asked the FCC to eliminate regulatory requirements that it support a landline network and to provide a deadline for phasing it out.

Even though Ma Bell killed its VoIP service, CallVantage, this past Nov., it still sees VoIP as the answer and offered the FCC data "that shows how the increase in voice options, from cellular phones to cable VoIP, and the rise in costs associated with running a switched access network are hurting its business while providing little benefit to the consumer."

Some interesting points from GigaOm and AT&T:

  • Total LD (interstate & intrastate switched access) minutes have fallen 42% from 2000 to 2008.
  • For the incumbent local exchange carriers, revenue from wireline telephone service fell to $130.8 billion in 2007 from $178.6 billion in 2000 — a 27% decrease.
  • At least 18 million households currently use a VoIP service, and it’s estimated that by 2010, cable companies alone will be providing VoIP to more than 24 million customers; by 2011, there may be up to 45 million total VoIP subscribers.
  • Today, less than 20 percent of Americans rely exclusively on switched-access lines for voice service.
VZ has already given up on copper plant, according to GigaOm, and VZ's own plans for FiOS and all of its rural plant (KY, Hawaii, New England, and the rest of it that it is "selling" to Frontier).


Wait! There's more.

According to CTIA, "There are more mobile broadband subscriptions in service in the U.S. market than fixed line." [Gary Kim's IP Carrier blog] CTIA says there are 103 million mobile broadband customers in the US. There are approximately 58 million fixed line subscribers. Rough total of 161M BB subs with mobile holding 64%.

More stats from Gary Kim:

"VoIP" was the "industry of the decade," according to IBISWorld, which says the industry earned that accolade because of its 1,655 percent growth rate between 2000 and 2009. ....Wireless telecommunications ranked eighth for industries of the 2000 to 2009 period, posting revenue growth of 183 percent. ... The bad news for the 2010 to 2019 period is that wired telecommunicatons carriers will show negative 52 percent revenue growth. Telecommunications resellers likewise will show negative 26 percent revenue growth over that same period."

What are you going to do?

Funny, but Seth Godin has a post with an answer:

"For most products and services, most of the time, people sign up for the Cheapest Reliable Alternative Plan. If everything appears to be the same, then of course they're going to pick the cheapest one that's good enough. In the face of this understandable strategy, you have a few choices: You can be cheapest (difficult to sustain). You can be more reliable (great if you can figure this out). You can redefine the playing the field to be the only one (most preferred).

You need to be remarkable. And you need to be realistic about your marketplace. If copper plant is going away, you need a plan. Do you have a 5 or 7 year plan? Are you selling in a dense, defined area or all over the place? Did you learn any lessons from the UNE-P era?

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