The latest report on U.S. fixed network voice connections by the Federal Communications Commission suggests that voice connections declined three percent between June 2010 and June 2011. That raises an obvious question: will number of fixed voice connections continue to drop, without end, to zero?

Some of us would argue that there is some stable number of connections, a non-zero number, that ultimately will be reached. There would seem to be some good reasons for predicting a perpetual demand for fixed voice connections, not the least of which is that voice quality likely always will be higher, and more consistent, on fixed connections, compared to mobile or forms of VoIP that do not use managed connections.

But that isn’t the only reason. Much might hinge on how voice services are packaged and priced. Consider the changes Verizon Wireless is making, to move customers to unlimited domestic calling and texting, for a flat monthly fee, as a base layer of mobile service.

Advertisement

In principle, service providers encourage users to retain voice connections to get better pricing on other services such as broadband access and entertainment video, for example. In other words, if fixed network voice service is packaged at retail in ways that impose little incremental cost over not buying the service, many consumers will see little reason to abandon fixed voice in favor of other alternatives.

In the Verizon Wireless case, mobile service itself becomes a flat rate connection fee, with variable pricing for mobile data.

Also, since the mobile feature set is more robust than prevailing fixed network consumer voice services, any moves service providers can make to better integrate mobile features on fixed lines will boost the value of the fixed connection.

Still, the ultimate “solution” will probably be to make fixed voice service so affordable there is no reason to drop it. Service providers will not like the gross revenue implications, but the simple matter is that if the value of fixed voice keeps dropping, compared to mobile voice, the erosion will continue.

Service providers will not like the fact that voice service becomes more a “feature,” and less a primary revenue driver. But lower average revenue per user likely is a better outcome than massive continued erosion of lines in service.

It might be harder to replicate the new Verizon Wireless packaging, where voice and texting are foundational parts of any mobile service. Some users will prefer “naked” broadband access.

But if voice and perhaps other features are bundled with the “lead” broadband access service in ways that users find reasonable, massive erosion might be avoided.

Under the new Verizon Wireless pricing scheme, though users can still use over the top messaging and voice, there is no financial incentive to do so, at least for domestic calling. At some point, fixed network providers will probably reach the same conclusion, and package “broadband access” with voice features in ways that make paying for fixed network voice a reasonable and preferable option.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!