International voice traffic volume growth slowed to 5% in 2011, according to new data released by TeleGeography. This growth rate was less than one-third of the industry’s long-run historical average of 13 percent annual growth.
This is a Huge problem because telcos must rely on strong volume growth to offset inevitable price declines, slowing traffic growth is making life ever more difficult for international service providers.
According to Patrick Christian (Telegeography) in PTC 12 there were two major factors influencing the international voice market at present. The first was the global economic downturn which affects “international trade, travel and migration.” That remittance payments and international call volumes from North to Latin America had been particularly affected by the downturn.
The second major factor was Skype. “Skype added twice as much traffic (47b mins) as all the other carriers combined,” he said, adding that the increasing spread of broadband will only increase the means of bypassing the PSTN.
In contrast to international phone traffic, Skype’s cross-border traffic has continued to soar. TeleGeography estimates that cross-border Skype-to-Skype calls (including video calls) grew 48 percent in 2011, to 145 billion minutes. Although the volume of international traffic routed via telephone companies remains more than three times greater than Skype’s cross-border volumes, their growth rates differ dramatically. TeleGeography estimates that Skype added 47 billion minutes of international traffic in 2011 — more than twice as much as all the telephone companies in the world, combined.
“Given Skype’s enormous traffic volumes, it’s difficult not to conclude that at least some of Skype’s growth is coming at the expense of traditional carriers,” said TeleGeography analyst. “If all of Skype’s on-net traffic had been routed via phone companies, global cross-border telephone traffic would have grown 13 percent in 2011, remaining in line with historical growth rates.”