Telecommunications and VOIP in Europe and Africa: A Market Perspective on the Major Economies
International callers from Europe will spend more than $31 billion on Voice over the Internet Protocol (VoIP) bypass this year. Since EU telecommunications companies have brought their international rates into line with actual costs, the attractiveness of VoIP as an arbitrage opportunity has already peaked and will gradually diminish. Thus, VoIP bypass will become a smaller percentage of all European international calls by 2011.
The report forecasts access line growth and wireless subscriber growth, analyzes data on MOUs related to international circuit switched voice and VoIP traffic, and forecasts VoIP MOUs and revenue per subscriber. VoIP’s impact on capital investment in hardware and software is also quantified. Data is provided for the major economies Europe and Africa including: France, Germany, Russia, the United Kingdom, Egypt, Nigeria, and South Africa.
Report Excerpt
In our 1999 study of international calling, IP Telephony, ISR, and Callback: The Deregulated European Market 1998-2003, INSIGHT predicted a short lifespan for many of the rate arbitrage plays then in vogue, and said: “…if the supposition of some (that IP equipment and transport costs are cheaper than the equivalents in the PSTN) proves to be true, and quality issues can be resolved, then IP telephony will indeed be the wave of the future.” Today, Voice over Internet Protocol (VoIP) is indeed having a direct and measurable impact on international carrier revenues, just as we predicted. But VoIP’s near term impact as an international calling rate arbitrage mechanism is a second-order effect. The impacts we trace on international markets in this study are a precursor, the leading edge, of what telecom carriers will face in their local and long-distance national markets in the near future.
In its role as a key driver for electronic commerce, as well as a facilitator to the diffusion of the Internet, the telecommunications industry has transformed itself as well as economies worldwide. The importance of telecommunications is reflected in its growing share of world output, increasing over the last twenty-five years from 1.6 percent of an estimated $20 trillion in 1975 to 2.9 percent of an estimated $40 trillion in global GDP in 2000. The pace of growth quickened in the last decade of the twentieth century and became a period of unprecedented growth for the telecommunications sector. This growth came to a screeching halt in 2000. Since then, the sector has been through a series of shocks whose effects are still being felt.
Troubles for the telecommunications sector began with the bursting of the “dot.com” bubble in 2000 as a result of the exaggerated expectations placed on the Internet phenomenon. In its wake, many telecommunications companies, either betting on the exponential growth of Internet traffic or having expanded outside their core activities, collapsed. But perhaps the biggest shock for telecommunications sector stakeholders has been the fact that the industry is witnessing a decline in revenue growth rates, which after a twenty-year uninterrupted growth trajectory of unprecedented magnitude, came as a surprise.
This study will seek to determine how much of the decline in revenue growth rates is caused by the one-off factors, and how much is precipitated by structural changes affecting the traditional public switched telecommunications network (PSTN) business models of the incumbent telephone operators as the industry moves to VoIP technology.
In the context of this study, “VoIP” is used in a generic sense to indicate the use of packet switching of voice traffic over the Internet. Hence, VoIP “bypass losses” in this report pertain to that portion of international voice traffic that uses the Internet as a transport vehicle and appears
Table of Contents
Chapter I
Executive Summary
1.1 International Telecommunications & VoIP
1.2 The Forces of Change
1.3 International Calling Market Analysis
Chapter II
From Telephone Operator to Information Provider
2.1 Telecommunications Tectonic Shift
2.2 Fixed Access Services
2.2.1 Europe Wireline Subscribers
2.2.1.1 France
2.2.1.2 Germany
2.2.1.3 Russia
2.2.1.4 United Kingdom
2.2.2 Africa Wireline Subscribers
2.2.2.1 Egypt
2.2.2.2 Nigeria
2.2.2.3 South Africa
2.3 Mobile Services
2.3.1 Europe Wireless Subscribers
2.3.1.1 France
2.3.1.2 Germany
2.3.1.3 Russia
2.3.1.4 United Kingdom
2.3.2 Africa Wireless Subscribers
2.3.2.1 Egypt
2.3.2.2 Nigeria
2.3.2.3 South Africa
2.4 Forces of Change
2.4.1 The Internet
2.4.1.1 Europe
2.4.1.2 Africa
2.4.2 Regulation
2.4.3 An Engine of Economic Growth
2.5 The Collapse of the Old Telecommunications Business Model
2.6 VoIP as the New Paradigm
2.6.1 VoIP as Transport
2.6.2 VoIP Operational Advantage
2.6.3 VoIP as Value-Added Stage
2.6.4 The Impact of VoIP on Regulation
Chapter III
Traffic Trends & Future Growth
3.1 Trends and Growth Overview
3.2 European Terminating and Originating Traffic
3.2.1 Terminating Traffic
3.2.2 Originating Traffic
3.2.3 France Terminating and Originating Traffic
3.2.3.1 Terminating Traffic
3.2.3.2 Originating Traffic
3.2.4 Germany Terminating and Originating Traffic
3.2.4.1 Terminating Traffic
3.2.4.2 Originating Traffic
3.2.5 Russia Terminating and Originating Traffic
3.2.5.1 Terminating Traffic
3.2.5.2 Originating Traffic
3.2.6 United Kingdom Terminating and Originating Traffic
3.2.6.1 Terminating Traffic
3.2.6.2 Originating Traffic
3.3 Africa Terminating and Originating Traffic
3.3.1 Terminating Traffic
3.3.2 Originating Traffic
3.3.3 Egypt Terminating and Originating Traffic
3.3.3.1 Terminating Traffic
3.3.3.2 Originating Traffic
3.3.4 Nigeria Terminating and Originating Traffic
3.3.4.1 Terminating Traffic
3.3.4.2 Originating Traffic
3.3.5 South Africa Terminating and Originating Traffic
3.3.5.1 Terminating Traffic
3.3.5.2 Originating Traffic
Chapter IV
VoIP International Adoption Trends
4.1 VoIP Overview
4.2 European VoIP Traffic
4.2.1 Terminating Traffic
4.2.2 Originating Traffic
4.2.3 France VoIP Traffic
4.2.3.1 Terminating Traffic
4.2.3.2 Originating Traffic
4.2.4 Germany VoIP Traffic
4.2.4.1 Terminating Traffic
4.2.4.2 Originating Traffic
4.2.5 Russia VoIP Traffic
4.2.5.1 Terminating Traffic
4.2.5.2 Originating Traffic
4.2.6 United Kingdom VoIP Traffic
4.2.6.1 Terminating Traffic
4.2.6.2 Originating Traffic
4.3 Africa VoIP Traffic
4.3.1 Terminating Traffic
4.3.2 Originating Traffic
4.3.3 Egypt VoIP Traffic
4.3.3.1 Terminating Traffic
4.3.3.2 Originating Traffic
4.3.4 Nigeria VoIP Traffic
4.3.4.1 Terminating Traffic
4.3.4.2 Originating Traffic
4.3.5 South Africa VoIP Traffic
4.3.5.1 Terminating Traffic
4.3.5.2 Originating Traffic
Chapter V
International VoIP and Revenue Loss
5.1 The Migration of VoIP
5.2 Europe Market Revenues
5.2.1 Sector Performance
5.2.2 Revenue Impact of VoIP
5.2.3 France Market Revenues
5.2.3.1 Sector Performance
5.2.3.2 Revenue Impact of VoIP
5.2.4 Germany Market Revenues
5.2.4.1 Sector Performance
5.2.4.2 Revenue Impact of VoIP
5.2.5 Russia Market Revenues
5.2.5.1 Sector Performance
5.2.5.2 Revenue Impact of VoIP
5.2.6 United Kingdom Market Revenues
5.2.6.1 Sector Performance
5.2.6.2 Revenue Impact of VoIP
5.3 Africa Market Revenues
5.3.1 Sector Performance
5.3.2 Revenue Impact of VoIP
5.3.3 Egypt Market Revenues
5.3.3.1 Sector Performance
5.3.3.2 Revenue Impact of VoIP
5.3.4 Nigeria Market Revenues
5.3.4.1 Sector Performance
5.3.4.2 Revenue Impact of VoIP
5.3.5 South Africa Market Revenues
5.3.5.1 Sector Performance
5.3.5.2 Revenue Impact of VoIP
Chapter VI
Capital Expenditures and VoIP
6.1 CAPEX Overview
6.2 European Investments
6.2.1 France
6.2.2 Germany
6.2.3 Russia
6.2.4 United Kingdom
6.3 Africa Investments
6.3.1 Egypt
6.3.2 Nigeria
6.3.3 South Africa
Appendix
GLOSSARY
TABLE OF TABLES
Chapter I
I-1 Impacts of VoIP on Worldwide Telecommunications Revenue ($Billions)
I-2 Impacts of VoIP on CAPEX Worldwide 8
Chapter II
II-1 Europe Wireline Access Lines, Population, and Teledensity, 2002-2011
II-2 France Wireline Access Lines, 2002-2011 (Thousands)
II-3 Germany Wireline Access Lines, 2002-2011 (Thousands)
II-4 Russia Wireline Access Lines, 2002-2011 (Thousands)
II-5 United Kingdom Wireline Access Lines, 2002-2011 (Thousands)
II-6 Africa Wireline Access Lines, Population, and Teledensity, 2002-2011
II-7 Egypt Wireline Access Lines, 2002-2011 (Thousands)
II-8 Nigeria Wireline Access Lines, 2002-2011 (Thousands)
II-9 South Africa Wireline Access Lines, 2002-2011 (Thousands)
II-10 Europe Wireless Subscribers, Population, and Population Percentage
II-11 France Wireless Subscribers, 2002-2011 (Thousands)
II-12 Germany Wireless Subscribers, 2002-2011 (Thousands)
II-13 Russia Wireless Subscribers, 2002-2011 (Thousands)
II-14 United Kingdom Wireless Subscribers, 2002-2011 (Thousands)
II-15 Africa Wireless Subscribers, Population, and Population Percentage
II-16 Egypt Wireless Subscribers, 2002-2011 (Thousands)
II-17 Nigeria Wireless Subscribers, 2002-2011 (Thousands)
II-18 South Africa Wireless Subscribers, 2002-2011 (Thousands)
Chapter III
III-1 Europe Inbound MOUs without VoIP (in Millions) 2002-2011
III-2 Europe Outbound MOUs without VoIP (in Millions) 2002-2011
III-3 France Inbound MOUs without VoIP (in Millions) 2002-2011
III-4 France Outbound MOUs without VoIP (in Millions) 2002-2011
III-5 Germany Inbound MOUs without VoIP (in Millions) 2002-2011
III-6 Germany Outbound MOUs without VoIP (in Millions) 2002-2011
III-7 Russia Inbound MOUs without VoIP (in Millions) 2002-2011
III-8 Russia Outbound MOUs without VoIP (in Millions) 2002-2011
III-9 United Kingdom Inbound MOUs without VoIP (in Millions) 2002-2011
III-10 United Kingdom Outbound MOUs without VoIP (in Millions) 2002-2011
III-11 Africa Inbound MOUs without VoIP (in Millions) 2002-2011
III-12 Africa Inbound MOUs without VoIP (in Millions) 2002-2011
III-13 Egypt Inbound MOUs without VoIP (in Millions) 2002-2011
III-14 Egypt Outbound MOUs without VoIP (in Millions) 2002-2011
III-15 Nigeria Inbound MOUs without VoIP (in Millions) 2002-2011
III-16 Nigeria Outbound MOUs without VoIP (in Millions) 2002-2011
III-17 South Africa Inbound MOUs without VoIP (in Millions) 2002-2011
III-18 South Africa Outbound MOUs without VoIP (in Millions) 2002-2011
Chapter IV
IV-1 Europe Inbound MOUs with VoIP (in Millions) 2002-2011
IV-2 Europe Outbound MOUs with VoIP (in Millions) 2002-2011
IV-3 France Inbound MOUs with VoIP (in Millions) 2002-2011
IV-4 France Outbound MOUs with VoIP (in Millions) 2002-2011
IV-5 Germany Inbound MOUs with VoIP (in Millions) 2002-2011
IV-6 Germany Outbound MOUs with VoIP (in Millions) 2002-2011
IV-7 Russia Inbound MOUs with VoIP (in Millions) 2002-2011
IV-8 Russia Outbound MOUs with VoIP (in Millions) 2002-2011
IV-9 United Kingdom Inbound MOUs with VoIP (in Millions) 2002-2011
IV-10 United Kingdom Outbound MOUs with VoIP (in Millions) 2002-2011
IV-11 Africa Inbound MOUs with VoIP (in Millions) 2002-2011
IV-12 Africa Outbound MOUs with VoIP (in Millions) 2002-2011
IV-13 Egypt Inbound MOUs with VoIP (in Millions) 2002-2011
IV-14 Egypt Outbound MOUs with VoIP (in Millions) 2002-2011
IV-15 Nigeria Inbound MOUs with VoIP (in Millions) 2002-2011
IV-16 Nigeria Outbound MOUs with VoIP (in Millions) 2002-2011
IV-17 South Africa Inbound MOUs with VoIP (in Millions) 2002-2011
IV-18 South Africa Outbound MOUs with VoIP (in Millions) 2002-2011
Chapter V
V-1 Europe Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-2 Europe VoIP Revenue Loss ($Billions) 2002-2011
V-3 France Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-4 France VoIP Revenue Loss ($Billions) 2002-2011
V-5 Germany Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-6 Germany VoIP Revenue Loss ($Billions) 2002-2011
V-7 Russia Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-8 Russia VoIP Revenue Loss ($Billions) 2002-2011
V-9 UK Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-10 UK VoIP Revenue Loss ($Billions) 2002-2011
V-11 Africa Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-12 Africa VoIP Revenue Loss ($Billions) 2002-2011
V-13 Egypt Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-14 Egypt VoIP Revenue Loss ($Billions) 2002-2011
V-15 Nigeria Telecommunications Revenues & Per Subscriber Revenue 2002-2011
V-16 Nigeria VoIP Revenue Loss ($Billions) 2002-2011
V-17 South Africa Telecommunications Revenues & Per Subscriber Revenue
V-18 South Africa VoIP Revenue Loss ($Billions) 2002-2011
Chapter VI
VI-1 Europe Telecommunications Capital Expenditures 2002-2011
VI-2 France Telecommunications Capital Expenditures 2002-2011
VI-3 Germany Telecommunications Capital Expenditures 2002-2011
VI-4 Russia Telecommunications Capital Expenditures 2002-2011
VI-5 United Kingdom Telecommunications Capital Expenditures 2002-2011
VI-6 Africa Telecommunications Capital Expenditures 2002-2011
VI-7 Egypt Telecommunications Capital Expenditures 2002-2011
VI-8 Nigeria Telecommunications Capital Expenditures 2002-2011
VI-9 South Africa Telecommunications Capital Expenditures 2002-2011
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