FLOW rants of Voice Decline as LIME Provides the Evidence of coming Profitability - The Hobbit An Unexpected Journey Adventure begins for Data Networks

“We saw improving results in Jamaica, where our ‘fightback’ campaign is gathering momentum following regulatory changes made by the Government. We have seen good traction in the key market of prepaid mobile and the business is re-energised”

Excerpts from said CEO of Cable and Wireless Communications Tony Rice, LIME's parent as reported in the Jamaica Observer, Friday, November 9^th, 2012

Recent utterances by the Telecom Providers claiming that they’re losing revenue due to the recently imposed Telecoms Tax as mentioned in my blog article entitled “GOJ taxes Telecom Providers and OUR sets Cross Network and International Calling Rate at JA$5.00 - Data Services Prometheus” have left me and others puzzled.

First up to comment was the CEO and President of FLOW Michelle English who suggested that they [Triple Play Provider FLOW] were seeing “a reduction of up to 10 per cent of the number of outgoing calls in all categories” as noted in the article “Telecoms tax clobbers landline usage, says Flow”, published Sunday October 21, 2012, The Jamaica Gleaner.

At the time this article made publication back in October 2012, it struck me as odd, as it was a mere three (3) months since the Telecom Taxes’ implementation. Triple Play Provider FLOW’s had also had an ongoing dispute over Landline Termination with Telecom Provider LIME.

From my last blog article, you’ll recall that I predicted Landline Services will prove profitable in the future as Jamaicans begin to settle into retirement as noted in my blog article entitled “Flow at odds with over Cross-Network rates for Fixed Line - Total Recall of the coming Importance of Triple Play Services”

Still, Voice Calling has always been on the decline, as users have the option of using free VoIP Services over FLOW’s Broadband Services such as Skype, ooVoo or Google Voice to make Video VoIP Calls as opined in my blog article entitled “Skype's Ads on Free VoIP heralds coming of Free Mobile VoIP - Video Calls not problem as LIME LTE soon tun up”.

Even the Telecom Providers Mobile are going to eventually have to be phased out as some smartphones make VoIP possible, even if not they are currently not transmitted over the Telecom Provider’s Networks but over Wi-Fi as noted in my blog article entitled “RIM introduce VoIP Calling over Wi-Fi for BB Messenger - Telecom Providers Trouble with the Curve of Wi-Fi Calling”.

When you pay for these VoIP Third-Party Services using your VISA Debit or Credit Card over the Telecom Providers Broadband Internet, such as Skype, ooVoo or Google Voice just to name a few, it still works out cheaper that FLOW’s Landline Services. So I’m surprised that a few months later, Telecom Provider LIME, who’d previously been silent on the matter, now decided to make comment as well.

This despite knowing that Data Services are slowly killing off the Voice side of their business, the so called extinction of Voice as predicted long ago in my blog article series listed below:

1.      Telecom Providers and SMS - The Dead Zone

2.      Verizon's LTE Network and VoLTE - The Dead Zone meets The Machine Stops

3.      LIME Landline Rental Increase and HomeFone XPress - The Dead Zone is the Sum of All Fears

4.      LIME look to the future with new Services - Video and Audio Friends with Benefits in the Dead Zone

While praising the benefits of the recently lowered Cross Network Mobile Rates that began with LIME XL and culminated with Talk EZ Plans as described in my blog article entitled “LIME's new TALK EZ Plan drops Cross Network Calling to JA$2.99 - Digicel's Game of Thrones vs LIME Return of the King” are having an overall positive effect on their business.

This is in terms of increasing Mobile Call revenue as indicated by my blog article entitled “LIME reports Voice Traffic up 71% in Second Quarter of 2012AD - ACS-Xerox loses contract to TELUS International as LIME becomes Mavado Money Changer”, they also admitted to being negatively impacted by the Telecom Tax. This as noted in “LIME fights on, but loses more”, published Friday, November 09, 2012, The Jamaica Observer.

The stats for the Third Quarter of 2012 are all positive continuation of the above despite increasing losses to Telecom Provider LIME. They read as follows:

1.      21% increase in mobile Revenues when compared to the same period in 2011

2.      20% increase in Mobile subscribers

3.      12% increase in ARPU (Average Revenue per User) directly attributed to XL and Talk EZ.

4.      6% increase in Postpaid APRU

5.      11% increase in Prepaid

6.      3% increase in Broadband

Thanks to the decline in Cross Network rates as stipulated by the OUR, the following expected mixed results also occurred:

1.      40% decline in Cross Network termination payments to other Telecom Providers

2.      12% of JA$4 billion decline in year-on-year decline in Revenues

3.      13% decline in fixed-Line Landline and Mobile Revenues

Thus the following balance sheet outliers were the result:

1.      78.6% decline in revenues from JA$435 in the Third Quarter of 2011 to $93 million in the Third Quarter of 2012

2.      $512 million for Restructuring

3.      JA$1.3 billion Net loss year-on-year

4.      JA$35 million in Deficit

5.      JA$1.6 billion in Liabilities

6.      JA$1.2 billion over the Second and Third Quarter

Clearly the short term outlook is bad.

But long term, as Postpaid, Fixed-line Landline and Mobile and Data Services is still on track as the statistics from the OUR (Office of Utilities Regulation) for the Fourth Quarter of 2010AD as stated in my blog article entitled “OUR Records Voice Decline for the Fourth Quarter of 2010” and the Second Quarter of 2011AD as stated in my blog article entitled “OUR Telecom Provider Stats indicate JA$14 billion profit for Second Quarter of 2012 - Telecom Providers Stacking up all Faces on the Argo Video Calling and VoIP on smartphones” suggest.

The Hobbit: An Unexpected Journey (2012) adventure begins for the increasing popularity of Postpaid, Fixed-line Landline and Mobile and Data Services as OUR Statistics and now Telecom Provider LIME’s stats demonstrate.

The reduction in revenues that Triple Pay Provider FLOW is experiencing is just a mere bump as Telecom Providers are now under pressure to upgrade Jamaicans to more First World Telecom Services. The Fightback had begun……