Nokia: Consumers Increasingly Giving Up Their Fixed Line Phones
A global study by market research company MORI, conducted for Nokia confirmed the trend that increasingly, subscribers switch to mobile services away from fixed lines. Sure, we can be critical and say that Nokia is in the business of producing and selling mobile phones, but this is not the first time that those numbers are coming out - Telstra reported last week that
only a strong first quarter growth in mobiles helped the company to beat off the continued decline in its core fixed-line business. But they warned that a sharp deterioration in revenue from its traditional telephone services is just around the corner.
"Fixed-to-Mobile Substitution (FMS) is occurring across the four major markets surveyed - Great Britain, USA, Germany and South Korea - with upwards of 45 million consumers estimated to now make all their voice calls from their mobile phone in these markets alone."
Before, fixed line operators were betting that because of broadband and Internet, their business model was somewhat secured, but the study also established, that this is changing slowly, further squeezing fixed line operators.
Why do people keep the fixed line? Well, mentioned are reasons like emotional attachments, costs considerations and so on. Another reason that we can think of is the still frequent occurrence of drop-outs particularly in countries where the coverage of mobile services isn't that great yet. We still see people checking their mobile phones and "counting the bars" to identify clarity of reception. Another reason is convenience and may be tradition. We are used to fixed lines, have used them for a long time - at least the older generation would argue that way. It is easier to sit down and have a conversation when you talk on a fixed line. People tend to run up and down, when they use their mobile phone.
But we are aware that people don't necessarily install fixed lines when they move into a new house. The study established that a significant number, in particular in South Korea, consider they would not take out a landline subscription on moving house or flat. In fact amongst the South Korean sample, 65% of the respondents make all or most of their voice calls from a mobile phone." We haven't introduced demographic differences that were established in the study.
Overall, it means that business models are changing - faster than many companies in fixed line business assume it would happen. To cope they need a change of mindset, and develop strategic plans to slowly phase out old and phase in new and more attractive services.
There is much more to say but clearly companies need to take a hard look at their businesses. The trend is there, it is unreversible, and will become a mainstream in many countries, sooner or later. Even in those countries that see themselves as insulated.
only a strong first quarter growth in mobiles helped the company to beat off the continued decline in its core fixed-line business. But they warned that a sharp deterioration in revenue from its traditional telephone services is just around the corner.
"Fixed-to-Mobile Substitution (FMS) is occurring across the four major markets surveyed - Great Britain, USA, Germany and South Korea - with upwards of 45 million consumers estimated to now make all their voice calls from their mobile phone in these markets alone."
Before, fixed line operators were betting that because of broadband and Internet, their business model was somewhat secured, but the study also established, that this is changing slowly, further squeezing fixed line operators.
Why do people keep the fixed line? Well, mentioned are reasons like emotional attachments, costs considerations and so on. Another reason that we can think of is the still frequent occurrence of drop-outs particularly in countries where the coverage of mobile services isn't that great yet. We still see people checking their mobile phones and "counting the bars" to identify clarity of reception. Another reason is convenience and may be tradition. We are used to fixed lines, have used them for a long time - at least the older generation would argue that way. It is easier to sit down and have a conversation when you talk on a fixed line. People tend to run up and down, when they use their mobile phone.
But we are aware that people don't necessarily install fixed lines when they move into a new house. The study established that a significant number, in particular in South Korea, consider they would not take out a landline subscription on moving house or flat. In fact amongst the South Korean sample, 65% of the respondents make all or most of their voice calls from a mobile phone." We haven't introduced demographic differences that were established in the study.
Overall, it means that business models are changing - faster than many companies in fixed line business assume it would happen. To cope they need a change of mindset, and develop strategic plans to slowly phase out old and phase in new and more attractive services.
There is much more to say but clearly companies need to take a hard look at their businesses. The trend is there, it is unreversible, and will become a mainstream in many countries, sooner or later. Even in those countries that see themselves as insulated.
posted by Andreas @ 9:10 am
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