Exponential growth in wireless and mobile telecommunications has created the perception that fixed-line telephony, and subscribership, is on the way out. The evidence isn’t as clear-cut as many may believe, however, according to market research from TeleGeography. Data from TeleGeography’s GlobalComms Database reveals that while public-switched telephone network (PSTN) telephone lines have indeed been declining steadily, much of the fall has been the result of growth in fixed voice-over-IP (VoIP) services as opposed to mobile/wireless adoption.
Overall, global fixed-line (PSTN and VoIP) voice subscriber numbers peaked at 1.29 billion in 2008. They have fallen at a compound annual rate of 1.3 percent since, evidence “of gradual long-term decline,” TeleGeography elaborates on a website post.
Phone Line Decline
The aggregated data obscures a big shift in the composition of the market, however, according to TeleGeography. While switched telephone lines have declined at a 4 percent compound annual rate, VoIP subscriber numbers have increased 18 percent annually. That, company analysts point out, has “offset much of the decline in switched phone lines.”
By TeleGeography’s count, VoIP connections now make up 20 percent of fixed lines worldwide. That’s up from only 8 percent in 2008. Rapid adoption of multi-service bundles that include fixed-line voice, as well as broadband Internet, TV and at times mobile telephone services explains the resiliency of fixed-line telephony, TeleGeography says. This past June, AT&T reported that 97 percent of its TV customers subscribed to at least one other service, the market researchers point out. Two-thirds of those customers subscribed to three or four.
While the VoIP trend in fixed-line voice telephony is inexorable, according to TeleGeography, “it will be decades before the PSTN disappears from all corners of the world.” As of 2013, 25 percent of Eastern Europe’s fixed lines were IP-based. Corresponding figures for Western Europe and North America were 35 percent and 33 percent, respectively. Macedonia became the first nation to completely phase out PSTN earlier this year as Deutsche Telekom enabled the country to rely wholly on IP-based telecommunication. The same is expected in Slovakia by the end of this year.
TeleGeography forecasts global fixed lines will decline 10 percent below their 2008 peak by 2018. At that point, switched voice lines will have fallen 33 percent while VoIP lines will have increased over 250 percent, accounting for almost one-third of phone lines worldwide. “Fixed line voice is a far cry from dead,” TeleGeography analyst Mark Gibson commented, “but it is no longer synonymous with the PSTN.”