Analysis thinks fixed-mobile substitution (FMS) could result in more than half of all voice traffic in Western Europe originating on mobile phones by the end of 2008. Mobile voice usage already exceeds that mark in Austria, Finland and Portugal. The extent of FMS does vary widely between countries, however – in 2006 the proportion of total voice minutes that originated on mobile networks ranged from 18% to 70% across Western Europe.
“Our analysis shows definitively that the affordability of mobile voice calls is the key factor in the level of FMS in a particular country,” explains co-author Dr Mark Heath. “Once mobile pricing becomes affordable, there is little that fixed operators can do to halt traffic migration.
However, some mobile operators have damaged their revenue by cutting prices too much. Very low pricing is not necessary and mobile operators can achieve significant traffic migration even with a healthy price premium over fixed services.”
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