WHITE PAPER: The switch to mobile phones calls for an agile response from the incumbent European Telecommunications industry

Fixed-line operators in developed economies are facing a future of little or no revenue growth as their traditional core business – voice telephony – is cannibalised by mobile telephones.

Years of state monopoly and evolutionary change have left fixed-line voice services ill equipped to meet the dual demands of the rapid technological shift and market liberalisation. Contrast the shorter innovation cycles for mobile telephony – already into its 3Generation (3G).

With few exceptions, incumbent operators so far have failed to renew revenue growth in their core fixed-line businesses. While broadband helps, it is still a long way from becoming a mass-market product capable of compensating for declining voice volumes. It also cannibalises second lines and dilutes profit margins.

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03/10/2005