IDC: Mobile maturity threatens telcos

By Darren Greenwood, ARNnet |  Mobile & Wireless

Maturity in the mobile phone market will eventually see customers ripping out landlines unless telcos can offer new services or packaged offerings, according to IDC.

The research firm said that most people in Australia who wanted a mobile phone had one, and that over the next few years it would increasingly make sense for ordinary consumers to go mobile-only.

Currently, 80 percent of Australians own a mobile phone, a proportion expected to reach 89 percent by 2008, according to IDC's latest study, Upwardly Mobile: Australia's Cellular 2004-2008 Forecast and Analysis.

"Australia's cellular services are expected to grow 7 percent this year, generating revenues of A$8.7 billion (US$6.1 billion)," IDC Australia's senior analyst for mobile and wireless solutions, Warren Chaisatien, said.

"Although voice will remain the killer app making up the bulk of carrier revenue, non-voice services will be the major revenue and profitability growth powerhouse and the primary battleground for the next five years."

As Telstra raises line rentals and toll call charges, business and domestic users will increasingly look at fully migrating from landline to mobile.

And the mobile telcos such as Vodafone and Hutchison, Chaisatien said, had nothing to lose in cannibalizing fixed line wireless revenues. They had, therefore, had a policy of introducing monthly plans aimed at such potential users.

Nonetheless, a gap still remained between the price of making a landline and a mobile call. But as this gap became smaller, there would come a time when it made sense to have the mobile as the main line.

Small businesses and home office users would remove their second lines first, Chaisatien predicted.

To tackle this trend, Telstra and Optus would need to offer new services, such as text messaging from mobile to landline, plus caller-ID services. Landline carriers would also have to migrate to VoIP technologies to offer either all-you-can-eat toll-call packages or new video and wireless services.

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