My Thoughts on Technology and Jamaica: OUR Records Voice Decline for the Fourth Quarter of 2010 - Postpaid, Data Services and Fixed Line Mobile and Landline Saturday Night Fever for Telecom Providers

Wednesday, March 28, 2012

OUR Records Voice Decline for the Fourth Quarter of 2010 - Postpaid, Data Services and Fixed Line Mobile and Landline Saturday Night Fever for Telecom Providers


Telecom Providers are and still may be losing money from Voice Services since the Fourth Quarter of 2010AD. This despite Jamaica having a very high Mobile phone penetration with nearly three million (3,000,000) Mobile phones, way more than there are people in Jamaica, which is estimated to be about 2.7 million, effectively 17% more Mobile phones than there are people in Jamaica.

According to the OUR (Office of Utilities Regulation) report, Telecom Provider revenue declined by 26% during the Fourth Quarter of 2010AD from $7.3 billion from $9.9 billion for the Fourth Quarter of 2009AD!

Interestingly, Data Services are faring far better with the growing popularity of Wireless Broadband offerings such as those from Telecom Provider Digicel as noted in my blog article entitled “Digicel and WiMax 4G Mobile - Back to the Future as NetFlix Expands”. But more surprisingly, the OUR also records growth in:

  • Data Services, particularly Mobile Data Services
  • Postpaid as well as in Fixed Line Services, both traditional Fixed Line Landline from Telecom Provider LIME based on outdated copper-wire twisted pair technology
  • Fixed Line Mobile based on sector-locked GSM (Global System Mobile) or CDMA (Code Division Multiple access), in some cases using the EDGE (Enhanced Data Rates for GSM Evolution) Layer to deliver VoIP services such as HomeFone Xpress as described in my blog article entitled “LIME Landline Rental Increase and HomeFone XPress - The Dead Zone is the Sum of All Fears

This stark revelation was made in a Jamaica Gleaner article entitled “More cells, but telecoms earn less”, published Wednesday March 21, 2012 by Steven Jackson, Business Writer, The Jamaica Gleaner. Apparently out of respect for the Telecoms Providers and a desire not to stoke the competition among these bitter rivals, this info had not been made public by the Regulator earlier

Good thing a New Telecom Regulator as well as a New Telecoms Act are in the pipeline as noted hopefully in my article entitled “Phillip Paulwell broker's Telecom Deal - Telecom Regulator and Mobile Number Portability Coming”, as this should have been well publicized before.

But the statistics, if you care to read them, confirm what I already knew: Switched Voice Services are dying as Data Services gains a foothold as I had opined in a more recent Geezam blog article entitled “Digicel Cloud Telephony to Make Switched Voice Extinct”.

Generally the overall view of the Telecom Providers is as follows:

  • 17% more Mobile phones than there are people in Jamaica, effectively 3,000,000 Mobile phones, to 2.7 million Jamaicans
  • 26% decline in overall revenues for all three (3) Telecom Providers LIME, Digicel and CLARO during the Fourth Quarter of 2010AD to $7.3 billion from $9.9 billion for the Fourth Quarter of 2009AD!
  • 16% decline in revenue for Mobile, fixed and Internet service providers in Fourth Quarter of 2010AD JA$11.3 billion, when compared to the Fourth Quarter of 2009AD
  • Mobile Calls within each Telecoms Providers Network (On-Net Calls) accounted for 70.9% of revenues compared to 29.1% for Cross Network Calls
  • Mobile customer spent $340 less per month for calls within each Telecoms Providers Network in the Fourth Quarter of 2010AD when compared to the Fourth Quarter of 2009AD
  • The ARPU (Average Revenue Per USER) declined from JA$2,245 in the Fourth Quarter of 2010AD when compared to the JA$1,904 in the Fourth Quarter of 2009AD

Prepaid Mobile
  • 95% of the estimated 3.049 million Mobile phone users are Prepaid, with the  other 5% being Postpaid

Postpaid Mobile
  • 35% increase in Post-paid customer in the Fourth Quarter of 2010AD to 133,000 from 98,519 in the Fourth Quarter of 2009AD

Fixed Line Mobile and Landline
  • 12% increase year-on-year in Fixed Line, both Mobile and Landline revenues to $3.4 billion
  • 7,000% rise in outbound international calls, representing 1.1 billion for the Fourth Quarter of 2010AD when compared to the Fourth Quarter of 2009AD
  • 6.3% decline year-on-year for Fixed Line Mobile and Landline services for Triple Play Provider FLOW and Telecom Provider LIME, representing 283,100 customers.

Mobile (Wireless) and Wired Data
  • 100% increase in Mobile Data revenue in the Fourth Quarter of 2010AD to JA$609 million from JA304.5 million in the Fourth Quarter of 2009AD thanks to Mobile internet usage attributed to  Android and BlackBerry phones
  • 1.9% increase in revenue for Wired Broadband Internet services for Triple Play Provider FLOW, Telecom Provider LIME, Telecom Provider Digicel and Internet Service Provider Infochannel to $641 million in the Fourth Quarter of 2010AD when compared to in the Fourth Quarter of 2009AD
  • 33.3% declined in Data subscriptions in the Fourth Quarter of 2010AD to 76,300 subscribers from 57,368 subscribers in the Fourth Quarter of 2009AD

The problem Telecom Providers are faced with is that Data Services use up more T1 capacity and Bandwidth than Voice Services, and being that such services are metered i.e. charged by the Megabyte and not the minute, the APRU is smaller. Thus the above increase in Data Services is to be taken with a large grain of salt

This lower level of efficiency for Data Services when compared to Voice Services despite the growing popularity of Mobile Internet as the Apple iPad 3’s popularity as noted in my blog article entitledApple iPad 3 sports Retina Display, LTE and Bluetooth - Internet of Things heralds Pointer Sisters Automatic” heralds grave concern for the local Telecom Providers here in Jamaica.

But interestingly, the gradual slow rise in Postpaid as well as Fixed Line Mobile and Landline Services, especially the increased International Calling associated Fixed Line Mobile and Landline Services indicates a growing trend: Jamaicans are trying to save money by going for Monthly Paid Voice Services.

This as Fixed Line Mobile and Landline Services and Postpaid, long been the poor stepchildren of the Telecom Providers in Jamaica, is now seeing increase resurgence in the review period of the Fourth Quarter of 2010AD, as customer now realize that Postpaid services provide reliable services and are cheaper that Prepaid Services if you are a heavy Voice Services user.

Also, the “Fixed” nature of Fixed Line means that convenience for people and businesses who still like the idea of having a traditional House phone and its social implications, an indication of the maturity of the mobile phone market seeking convenience over cost savings.

Even more interesting, the increased adoption of Data Services, indicates that customers are beginning to realize that the can save on Voice Calling via the use of texting on IM (Instant Messaging) and Social Networking Platforms which increasing have VoIP Services such as Skype, now heavily integrated into Facebook as stated in my blog article entitledFaceBook deeply integrates Skype - Microsoft, the Ladykiller of Landline”.

Based on the above, the following conclusions can be easily drawn:

Truly, Data Services, Postpaid and Fixed Line Mobile and Landline represent Saturday Night Fever (1977) for increased profitability for Telecom Provider in the future. I just wish that the New Telecom Regulator makes such reports known in a timelier manner.
Post a Comment