Contrary to common belief, voice communication is doing just fine: it just takes different forms these days. But it’s still an essential business tool that consumers want and use and which presents opportunities to exploit.
You could be forgiven for thinking that nobody makes voice calls any longer. In 2012, MRI -Simmons found that 94% of people had made at least one voice call in the previous week; by 2019, voice had fallen behind texting, emailing, social media and chat apps as a tool for keeping in contact with others, with only 45% saying they’d made a voice call in the previous week. Less than half of survey respondents had used their phone to make a call. Microsoft and YouGov surveyed communication preferences in the workplace in 2019 and found that picking up the phone had become the least favorite option: 74% of workers said face-to-face was their preferred method, 69% said email. Only around half, 55%, said they made daily calls.
Why is this? There is a perception that younger people no longer value voice, and there may be some truth to this. One survey found that 75% of millennials avoid phone calls because they are too time-consuming, while 81% of them say they get apprehension anxiety when building up the courage to make a voice call. But at the same time, they embrace video calls and using voice through social media apps, with group voice apps like Clubhouse, Yee, and Tapebook emerging all the time.
On the whole, it’s pretty healthy, and actual voice traffic remains relatively steady: research company Omdia has forecast that global fixed voice subscriptions will fall from 897 million in 2019 to 824 million in 2024, at a CAGR of -1.69%, driven by fixed-to-mobile voice and VoIP substitution. In fact, OTT calls are growing exponentially. Overall voice communications that incorporate fixed, mobile, and VoIP are performing healthily.
2020 saw a 50% increase in the number of phone calls made in the UK, which put networks under strain and prompted the government to seek action from regulator Ofcom to ensure coverage and reliability. The COVID-19 lockdown was a driver behind this increase, as people reached out to one another to hear another human voice. In the US, Verizon reported handling an average of 800 million calls a day, more than double the number made on Mother’s Day, historically one of the busiest call days of the year. The length of voice calls was up 33% on an average day before the outbreak.
We haven’t given up talking, we just do it differently now than how we always have via traditional fixed or mobile lines. During the COVID-19 crisis, video calls grew immensely. By March, business conferencing apps alone topped 62 million downloads, while newcomer Zoom became the number one free app for iPhones in the United States, with daily downloads increasing 30x year-over-year. In April, Microsoft reported that Teams had reached 200 million daily meeting participants, and Google’s Meet had over 100 million. Cisco Webex users clocked up 5.5 billion minutes in virtual meetings in March.
Videoconferencing was increasing even before the COVID-19 pandemic: according to a Valuates report, the web conferencing market is worth $12.5 billion and is forecast to reach $19 billion by 2025. It might not remain as widely-used as it has been during the enforced lockdown, but it’s a tool that we’re clearly much more comfortable with now and a new element to the voice offering.
Voice assistants are another tool that’s keeping users talking. People will interact with voice assistants on 8.4 billion devices by 2024, according to new research by Juniper, double the number of today. The fastest growth is expected to be in connected TV-based voice assistants, but it is easy to see how familiarity with voice assistants could soon extend to the workplace too. Cap Gemini research found that 76% of businesses have realized quantifiable benefits from voice or chat assistant initiatives, with benefits cited including over 20% reduction in customer service costs.
Operators must find new ways to profit from voice-related services. Network optimization is one way and the route to reducing both CAPEX and OPEX. Operators making the shift to 5G can consider switching off their 2G and 3G networks – at least in developed markets. According to the GSMA, in developed countries, 4G networks covered over 95% of populations by 2017, so a 2G and 3G switch-off can help operators make more efficient use of spectrum and reduce operational costs. It isn’t a move to make lightly, and operators would need to consider aspects like accessibility in rural areas and older users, typically the primary users of basic 2G and 3G phones, plus the millions of IoT devices connected to 2G.
It could be a viable business case though. Telcos in Asia Pacific that have switched off legacy 2G/3G networks report savings thanks to network operation being simplified and maintenance costs reduced.
And until all countries have launched 5G, it is critical to select an international voice provider, like Orange Wholesale International, that can guarantee service interoperability to roaming users so 5G users in a country where only 3G is available can still use their mobile service. Customer experience, thus loyalty, is a stake.
Another path to keeping voice costs optimized is outsourcing wholesale voice services. Large global carriers like Orange have years’ worth of partnerships in place plus bilateral agreements around the world and traffic volumes that let us enjoy economies of scale. We also have the scale to have robust and sophisticated anti-bypass systems that are essential to maintaining voice margins. Without these building blocks in place, wholesale voice isn’t an easy area to stay profitable in; working with a specialist partner can help retain an efficient and qualitative service in which costs remain under control.
A further area to investigate is value-added voice services, especially targeted at businesses and mobile users. These can give operators a way to offset potential voice revenue losses. Both consumers and particularly enterprises still need high quality, reliable voice services to support telephony, video conferencing and other customer services, and there are new ways of enabling these services. Cloud, API or software-based call services are all options here. Enterprises typically do not really care about what network they use, but they do care about issues of coverage, cost, features and reliability. Consumers on the other hand are more interested in OTT voice and messaging apps because they’re free, although they are limited to interactions with other users over the same apps.
In addition, operator revenues for Video over LTE (ViLTE), which enhances voice services with high-quality video, are forecast to exceed $33 billion by 2024. This type of evolution - a conversational, person-to-person service - can create new users and revenues.
Investing in research and development (R&D) or working with the right partner can help telcos deliver these types of value-added voice services and OTT-like apps. And means they are able to combine cutting edge product innovation with their interoperable networks to give customers a blend of high quality voice services, value for money, and global reach.
