Once Upon a Time, Voice was Not a "Product" with a Life Cycle

For most of us, the idea that voice was a product like any other was unthinkable prior to the mid-1990s, for one simple reason: accounts and usage had risen steadily for more than a hundred years. And when use of primary lines seemed saturated, people started buying second lines. At first it might have been for use by teenagers in a household. Then demand for dial-up internet access happened. The point is that usage seemed only to move in one direction: up.

In the U.S. market, that cracked in either 2000 or 2001, depending on which data sources one looks at.


Global fixed access lines might have peaked about the same time. In the U.S. market, minutes of use peaked in 2000.


These days, nearly half of U.S.  homes (47.4 percent) had only mobile phones during the first half of 2015. At the present rate of change, sometime in 2017 it is likely that at least half of all U.S. homes will not have a fixed line telephone service.  

Also, more than 66 percent of all U.S. adults aged 25 to 34 and of adults renting their homes were living in mobile-only households.




Those are clear examples of product substitution and product lifecycles. People decided to use fixed telephony less, and mobile telephony more. Text messaging for a while was the big driver of incremental revenue in the mobile business, but that now has passed its peak, to be followed by mobile internet access as the growth driver.

Those are some of the changes we have seen over the past several decades.

Three Decades of Disruption
1980
2015
Natural monopoly
Oligopoly
High margin
Moderate to low margin
Low to moderate adoption
High adoption
Low innovation
High innovation
Stable markets
Unstable markets
Compete on quality
Compete on price
Fixed network dominates
Mobile network dominates
Tightly integrated apps and network
Open network
Owned app creation
3rd-party app creation
Sell app, use network access
Sell network access (dumb pipe)
Voice business model
Internet access, mobile business model
Similar business models globally
Growing diversity of business models
99.999% uptime
99.9% or “good enough” availability
Few lead apps
Many lead apps
IT adoption: enterprise; SMB; consumer
IT adoption: consumer/SMB to enterprise


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