August 01, 2018
Watershed moment: should mobile operators be worried we talk less?
A new report from Ofcom claims users in the UK spoke 2.5 billion minutes less on their mobile phones, down by 1.7% in 2017, the first such decline in history.
This followed the trend total talking time by the UK population has been declining over several years, primarily mainly driven by the sharp drop in minutes spent on fixed line phones. The combined talking time also suffered the sharpest drop in years, at more than 6%. See the chart from Ofcom’s The Communications Market 2018 report (p.17) below.
In some ways mobile operators should be concerned. After OTT messaging services (WhatsApp, Viber, WeChat, etc.) destroyed the text message cash cow, it looks they are also losing another revenue stream, the voice call.
However it does not necessarily mean we speak less. Some simply move the calls into other apps, especially when we need to speak to people overseas, more than one people at the same time, or when we like to combine video with audio. Group video call features from WhatsApp or Skype and others come handy.
Operators’ response is not too dissimilar to the one when they tried to fend off the OTT messaging services. After throwing in unlimited number of text messages to typical packages, they now often throw in unlimited minutes. However this does not look to have reverted the trend of fewer minutes spent on voice calls, just like the unlimited text message offers have not reverted the decline in SMS and MMS (p.20).
A typical standard definition voice call using Skype, WhatsApp, Business Unified Communications Offering from Cisco, Microsoft, MiTel etc. will consume 1 mb per minute of voice conversation.
If we assume that the above solutions will continue to erode traditional voice lines; this will put even more pressure on operators to continue to monetize their data bundle and raise prices on the most basic of plans.
On average we are currently seeing average business call via traditional cellular voice channel at 5.3 minutes based on the users that are currently using mobilityView.
On the assumption that there is 1 hour of traditional cellular voice business calls (inbound/outbound) per day that translates into 60mb per day of incremental data usage or 1.3 gb per month of incremental data consumption where VOIP replaces the traditional cellular voice channel.
Remember when we said that legitimate business usage is prepared to explode at a considerably higher growth rate than the underlying trend? A great example of why.Back