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    Home » News » Fixed-line business to bounce back – report

    Fixed-line business to bounce back – report

    By Editor20 July 2010
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    The fixed-line telecommunications market in SA is set for a turnaround, in part because of declining mobile termination rates, says technology research and advisory firm BMI-TechKnowledge.

    A new report, SA Voice Services Market Forecasts and Analysis, shows that between 2009 to 2014, fixed and mobile revenues are forecast to grow at compound annual growth rates of 3% and 7% respectively.

    BMI-T telecoms analyst Fezekile Mashinini says this is good news for the fixed-line sector, where there’s been negative growth in the past few years.

    Mashinini says the former public switched telecoms network player, Telkom and Neotel, can benefit fro lower mobile termination rates by clawing back part of the traffic they lost to least-cost routing (LCR), which switched traffic along more optimal routes.

    “This scenario requires competent and innovative execution on the part of these players, in the face of ongoing fixed-mobile substitution, mobile-centric offerings from Vodacom Business and MTN Business, and growth in voice over Internet Protocol (VoIP),” Mashinini says.

    In mobile, minutes of use are expected to enjoy a compound annual growth rate of 12,5%, driven by lower call charges, and innovative products that the operators are introducing in the market, including discounts on both on-net and off-net calling, he says.

    A maturing market and the Regulation of Interception of Communication Act have affected growth of mobile subscribers and a more moderate growth trend is expected.

    The alternative voice services market, which includes traditional LCR, VoIP, and hybrid VoIP and LCR, will take a big knock in revenues mainly due to the effects of new termination rates.

    BMI-T expects revenues in this market  growing at an annual rate of -14% due mainly to expected declining traditional LCR revenues, which currently account for 91% of spending in this category.

    VoIP promises to be the biggest growth area over the forecast period, with minutes and revenues expected to record double-digit growth figures, albeit off a low base.

    Though cost-cutting initiatives will initially still drive VoIP adoption, BMI-T expects to see a gradual shift in the minds of enterprise customers towards placing higher value on the sophisticated functionality offered by unified communications.  — Staff reporter, TechCentral

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