Survey says telco execs identify VoIP as primary cause of declining revenues

A survey released by Oracle claims that industry executives believe VoIP has been the main cause for revenue losses and that the main source of revenue for communications carriers will not be voice calls in the near future.

Survey results show that world-wide, executives believe that new on-line Voice over IP (VoIP) services, such as Skype, are the greatest threat to the fixed line revenues with 68 percent of respondents identifying VoIP operators as the primary cause of declining revenues. Additional results include:

  • 72 percent of executives believe that introducing new services is the
    most effective strategy to counter falling voice revenue, much more so
    than pricing changes or marketing initiatives.
  • 65 percent of respondents comment bundled triple-play offerings as
    important or critical, emphasizing the importance of the overall service
    packaging within the communications industry.
  • 51 percent of executives say mergers and acquisitions with mobile
    operators are strategies they are most likely to pursue in the next two

I’m somewhat surprised that they rate VoIP so highly, given that wireless seems to be a far greater threat to fixed-line revenue than VoIP.

It’s kind of ironic that on one hand they say they need to innovate, and on the other, their planned “solution” to this mess is bundles and triple-play. I’m in the minority in believing that triple-play is a joke and that consumers will get fed up with bundles that have too many restrictions. Time will tell.

The survey was conducted in September 2006 and covered 36 countries in three regions; 38 percent of respondents were based in Europe, 28 percent in North America and 28 percent in the Asia-Pacific region. About 1/3 were fixed-line operators.

4 comments for “Survey says telco execs identify VoIP as primary cause of declining revenues

  1. I think, they find VOIP as a major threat for business communications. Corporations are not goign to use wireless for communication, they are switching to VOIP!


  2. VoIP is going ot establish themselves and will be a major player in telecommunication. Otto is right, corporations are going to switch to VoIP. WiFi VoIP is just coming up, too so the telcos really have something to worry about.

  3. The problem I think is really one of product quality – you just don;t have the same issues with line quality and dropped lines on landlines, but are common with VoIP.

    VoIP hasn’t peaked – it just needs VoIP companies to treat it as a technology to improve upon for quality, instead of rolling out an unfinished service.


  4. I have DSL, VOIP and i love it. I would be scared if I was a exec too. Thats why they are making excuses and saying thats the reason for the decline in revenue.

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