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Mobile voice revenue slowdown predicted from 2013

Who'll pay for all the data traffic then?

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Ovum reckons revenue from voice will start dipping within two years, and the increasing data revenues won't be enough to replace it either.

That's not to say that people are making fewer calls, but in developed markets we've long seen voice traffic rising as revenue remains static. Ovum's latest predictions are based on that model continuing into expanding markets, where margins are tighter, and concludes the end of the data subsidy will come in 2016.

Voice calls have been subsidising data for a long time now. Three, for example, reckons more than 90 per cent of its UK traffic is data, but that data only contributes around 30 per cent of the revenue, so those making voice calls are paying for those of us using our data connections.

That's obviously unsustainable, and Ovum puts the end game (worldwide) just five years down the road: "In 2016, non-voice revenues will no longer be a supplement to voice revenues. Instead, they will begin to replace them" the company tells us. But Ovum also reckons that data revenues won't rise fast enough to make up the drop, leading to mobile telecommunications revenue dropping globally as operators fail to squeeze more revenue from their data customers.

All the UK operators have flirted with variable charging to up the amount we pay per byte. Three started throttling at peak times/sites, but backtracked slightly at the last minute; T-Mobile made noises about reducing its cap, but it was only applying it to streamed media, which was too complicated for some – though many of those didn't want to understand it.

Vodafone Germany launched its 4G (LTE) service with a tariff which drops customers back to 3G when they hit the data cap. That's an interesting model, especially given that 3G is good enough in most circumstances, but it denies the flexibility that 4G offers. With LTE the operator can vary the connection speed of an individual connection enormously, throwing them back to 3G is an extremely-primitive way of achieving the same thing.

Analysts' predictions are always hard to credit, being little more than educated guesses from people in suits, but the end of the data subsidy will have to come eventually, and 2016 is as good a date as any even if it means overall revenue dropping too. ®

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