The idea that consumers are turning away from a fixed-line telephone is one which carries lots of weight – however it’s not quite so straight forward as that.
New research from TeleGeography’s GlobalComms Database shows that while the numbers of traditional circuit-switched (PSTN) telephone lines are declining steadily, a lot of that reduction in switched subscribers is down to a rise in fixed voice-over-IP (VoIP) services.
Total worldwide fixed-line voice subscribers (both PSTN and VoIP) numbers peaked at 1.29 billion in 2008 and have been declining at a rate of 1.3% annually since. While the fixed voice market is in long-term gradual decline, the aggregate number does mask a shift in how the market is made up. PSTN lines have being going down at a compounded rate of 4% per year, making a sharp contrast to an 18% annual growth of VoIP subscribers, but they have helped offset a lot of the decline in switched phone lines.
Worldwide, VoIP connections now account for 20% of fixed lines, up from just 8% in 2008. This is largely due in part to the rapid adoption of multi-play plans where a fixed voice service is bundled in with broadband internet, TV and sometimes a mobile phone service.
It will be decades before the fixed-line telephone disappears from the world, but the trend towards VoIP is inevitable. In 2013, 25% of fixed lines in Eastern Europe were IP-based, 35% in Western Europe were IP-based and in North America 33% were. Macedonia became the first country to switch fully from PSTN to an all-IP network in 2014 thanks to Deutsche Telekom and the company was aiming to turn off all its legacy TDMswitches and convert its network in Slovakia to IP by the end of last year.
TeleGeography is predicting global fixed lines falling to 10% below their 2008 peak level by 2018. At the same point, they project that point switched lines will have declined by 33% while VoIP lines will have increased by more than 250% to account for nearly one-third of all phone lines worldwide.
Fixed-line voice telephony is a long way from being dead but it is no longer synonymous with PSTN.
- GlobalComms is TeleGeography’s constantly updated online database of wireline, wireless and broadband competition.