Voice ain't dead yet - but what about telcos?

Though mobile telephony and voice over IP (VoIP) have stolen the thunder of fixed-line voice communications, voice itself is still a vital application in the telecoms world.

Mike Cansfield, head of telecoms strategy practice at analyst Ovum, today said: "To say voice is dead is clearly and patently wrong.

"People still love to talk - and will continue to love to talk."

Voice minutes are on the rise, according to Ovum, and worldwide they are expected to grow around six or seven per cent per year until 2015 - though the portion of those minutes made over landlines is dropping.

Cansfield said: "The volume of minutes will continue to grow but the mix will change dramatically."

By 2015, the majority of minutes will take place over mobile networks, while fixed-line minutes will be roughly equal with VoIP over broadband. The remainder will be VoIP over wireless - whether over 3G, 4G, wi-fi or WiMax.

Though people are talking for longer, the price of calls continues to fall and so Ovum predicts voice revenues will decline significantly in Western Europe - from around $260bn in 2005 to $225bn in 2015.

Fixed-line revenues will be hit hardest - falling 30 per cent - while mobile revenues will fall 11 per cent.

Broadband VoIP is the one revenue stream that's growing but not enough to offset the decline of the others.

A separate report from Informa Telecoms & Media also heralds the decline of fixed-line revenues and predicts Western European telcos will lose $201bn in this area between 2005 and 2011.

Worldwide, however, both voice minutes and revenues are still growing, driven largely by mobile uptake in the developing world. Ovum predicts worldwide voice revenues will grow by 13 per cent by 2015.

Mobile is the biggest disruption to the traditional telcos, according to Ovum, while VoIP over broadband is also seen as a threat.

The attraction, said Ovum's Cansfield, is the ability mobile provides to use one device from anywhere. "People use mobile because they like the flexibility," he said.

Meanwhile Ovum predicts voice over wi-fi, WiMax and 3G will be low-level threats to mobile operators in the next five or six years because there are still technology and standards issues to work out in these areas.

This changing landscape presents quite a challenge for incumbent telcos which base much of their business around fixed-line, such as BT. Cansfield said: "BT is in a pickle."

Ovum said BT needs to build up its mobile efforts - especially its high-street presence, which is conspicuously lacking.

Telecoms incumbents, which already dominate in both fixed-line and mobile services, will be better off.

As voice revenues decline, telcos will look to make money from other services and applications.

Tony Lavender, head of Ovum Research, said: "Voice remains a killer app as an add-on or in conjunction with other things."

In the enterprise, this could take the form of services which meld video and voice or web collaboration and voice. In the consumer space, services such as IPTV are looked to as money-makers.

But it is still a risky time for telcos, said Ovum, as exactly how much businesses and consumers are willing to pay for such services remains to be seen.