It is the beginning of the end for conventional telecommunications networks, as consumers are increasingly turning from the use of secondary telephone lines toward cheaper wireless services and the increasingly available broadband networks. This is the finding of a report from Forrester Research released this week.
However, whilst the change may be coming, it is from a small start. ‘New communications options’ have displaced telephone services in just 1.7% of US households so far. However, Forrester forecasts that more than five million American households will migrate to mobile and high-speed broadband networks for their main source of communication by 2006. This, says the report, will cost the major telecoms companies almost $9 billion (£6.4 billion).
“Half of this loss – more than $4.5 billion – will come out of lost revenue from highly profitable services such as voicemail and call waiting,” said Charles Golvin, senior analyst at Forrester. “This means that traditional service providers, which today own 57% of the consumer telecom budget, will see their share reduced to 36% in the next five years.”
The move away from telephone lines toward broadband During the next five years, wireless will gain 11% of household spending as the average number of mobile phones grows to 2.2 per household. Five and a half million consumers will give up their second land lines and 2.3 million will drop their primary line, according to the forecasts.
Forrester says that broadband connections will also take revenues away from fixed-line providers and dial-up internet service providers (ISPs), as by 2006 50% of US households will use a high-speed internet access for voice and data.
“Broadband providers will also take voice business away from traditional service providers as they begin to offer voice over IP [internet protocol] service in 2002,” added Golvin. “By 2006, these packet voice offerings will displace 4.26 million traditional lines and nearly $1.5 billion in annual revenue.”
By 2006 in the US, the broadband market will be split 60/40 between the cable and DSL platforms, according to Forrester’s research.
A similar trend is now developing in the UK, as broadband services become increasingly available. Oftel this week reported that consumers often use unmetered dial-up internet access – which is narrowband and therefore slower – as a stepping stone to using the faster broadband services (see Almost Of Half Of UK Households Are Now Online).
