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Is it the end of the road for the telephone landline? |
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OFCOM recently published this year's communications market report detailing digital trends and usage amongst different age groups. [Link]
There report starts off with a particularly punch quote:
"As a result of growing up in the digital age, 12-15 year olds are developing fundamentally different communication habits than older generations, even compared to the advanced 16-24 age group."
It goes on to explain how its children leading the digital revolution with mass adoption of online applications and channels.
The following graph shows the 'weekly exposure to devices':
One thing that this report does highlight is that over the generations surveyed landline telephone usage is on the decline. This raises some interesting questions, and a few intriguing possibilities.
I put a an example case to you:
When I was a child the Landline was the ONLY telephone in the house. Now it's pretty much an ornament as modern mobile contracts tend to come with so many inclusive minutes that I only ever use the landline for premium numbers that are free on that over the mobile. All of the adults in the house have thousands of inclusive minutes. Why would they ever use the landline? Despite that I still pay a month fixed line fee though, but the actual usage bill is regularly in the pence cost bracket.
The OFCOM report is showing exactly this behaviour in children. Mobile usage is massively up, for a number of reasons, such as barriers to entry lowering, i.e. handset costs and contract allowances, and increased stability and speed in mobile networks means that the quality of service is always improving. Just search for 4G coverage in the UK.
What are the reasons for having a landline?
So why do people still have landlines?
- 1. The first reason is to make calls.
- 2. The second reason is because of other over-the-top services such as broadband and TV services
- 3. The third is as a bundled product. Often service providers will cut you a discount for taking many products instead of just one. For example if I remove my landline from my Virgin Media bundle I'll actually pay MORE for not having it.
So what is the Landline used for now?
So realistically that leaves the second reason as the most valid. Some providers are still using the landline for TV broadcasting or device communications rather than their satellite network (I'm looking at you Sky). But doesn't that seem counter intuitive? Having to have a landline to support increasingly bandwidth hungry Hi-definition TV channels? What the OFCOM report shows is that the newest generations of our society don't use a landline at all. When they come of age as to be moving into their own homes and having the conversations with service providers about 'requiring a landline because you have TV' there is going to be a serious customer backlash.
Death of the landline
So I'm predicting that he landline has to find another purpose. Or its Dead. It's not good enough to be in a bundle of service, or to merely be a cost differentiator. It has to do something. Otherwise 'digital natural selection' will occur and Broadband and satellite comms will consume it.
It will follow the usual pattern of decline in as much as customer uptake will drop, meaning that the cost will rise. Suddenly all the cost and effort in dropping new lines into new housing estates and renewing old lines will start to look like a bad expenditure to the big telecoms companies. The landline will price itself out of the market, and investment in it will shrink.
You just watch. Next years annual OFCOM report will show even less landline usage in the youth generation.
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New stats show further SMS decline as customers switch to online messaging apps |
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Recent statistics from mobile operators are showing a further decline in SMS usage over the last year or so. It seems to growth of Smartphone messaging apps that's eating into SMS's usual territory. Personally I credit this to two main reasons.
The advance of online messaging applications
Now this might sound obvious but messaging apps have come a long way. Not just in terms of availability, but usability and adoption. There are far more people now using messaging apps, that have a greater number of features than ever before. With this advancement we've seen aggregation of several services. Take Trillain as an example (Google Play Trillian App) Out of the box it supports 'Facebook Chat, MSN, Google Talk, AIM, ICQ, Yahoo!, and Jabber'. This allows you to forget about potential compatibility issue, as compatibility is no longer an issue. The Apps are no longer restricted to a messaging network, they are cross platform compatible.
Also with the working model of App downloads people are more comfortable now downloading applications. As the percentage of mobile app downloads increases it follows that a certain percentage of that increase will be messaging applications.
The push for data services
One thing that Telecoms companies have really pushed since the mid 2000's is the usage of the data network. Voice and SMS networks and usage have been relatively stable for a while now. The costs to operate them have come down and the tariffs customers buy have also come down. This may sound unbelievable based on the current operator contract process but recent statistics show that contracts are 27% less profitable than they were in 2005, partly due to pricing and partly due to the allowances included in them.
The only commodity left for a telecoms company to sell is data. Data is a measurable, metered commodity that can be priced for usage. It's the perfect target to try and get customers hooked on. You pay for a limited amount, use it all, and demand more, so you pay more. This encouragement leads to more uses of data. Customers want to use the data they have, so they find uses for it. Messaging being something they are already familiar with its an easy transition to switch from SMS to a messaging app, after all SMS is pretty much a pre-installed app these days anyway.
The future of SMS?
So are we only a few years away from an SMS-less mobile network? I don't think so, the problem with this is that the capital cost has been forked out for a mobile network that can support current SMS volumes, and continues to be spent on supporting it. Vodafone advertises a daily expenditure of between 1.5 and 2 million a day to support the existing network infrastructure. This is for voice, data and SMS but those things are intrinsically linked. They cannot extract the SMS functionality from the core network and stop supporting it, it just doesn't work like that. That leaves them with an expensive on-going support cost for a declining SMS market that is unlikely to ever go away. All you'll end out with there is a small resilient core of customers using the SMS network at an incredible costs (to the Telco) per SMS. SMS will never truly vanish.
You can read the Guardians view on this here.
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Has the golden age of massive Mobile Application growth come to an end? |
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Welcome to the all-you-can-eat-App-buffet!
Let's start off by looking at previous mobile app usage patterns. Early adopters and new mobile platform customers (Tablet and handset) are initially 'wowed' by whichever App store they visit. The wealth and availability of applications in an App store is impressive, and they are all available within a few clicks. People have little to no experience with any of these new applications now available to them, so they skip around a lot, downloading applications without a great deal of thought. We snack on different applications until we are gorged with a wide selection of them. There are no repercussions to installing a lot of these things, after all the only currencies are disk space (plentiful on modern devices) and a few pounds if you are purchasing applications. We haven't really got a plan, or a usage pattern here, it's an exciting new world of easily downloaded applications.
This slightly chaotic, unfocussed view on downloading applications gives people an opportunity to find the programs that work for them. It would be really interesting to see the discard rates for installed applications. Users try them, find that it wasn't what they thought and get rid of them. Often to then try something else very similar to see if the issues they had with the first App are fixed in a competitor or if that extra bit of missing functionality they thought was there is present.
Building Application loyalty and discovering a usage pattern
There is no App loyalty at this point. People are still adding and removing Apps until they settle on a relatively stable core set of applications. Consider the last time you upgraded a device. Chances are you simply reinstalled half of the same applications that were on the old device onto the new device. Apple and Google have actually built this data migration functionality into their ecosystems now. Its become the expected behaviour. Users develop a pattern of usage, and then they tend to stick with it. Barring significant life changes that introduce new categories of interests such as Marriages, children, house moves etc. people stay within their comfort zone. It takes a lot of marketing, or a trusted social recommendation to instigate someone to try out a new application.
A statistic that has an important bearing on this is the early adopter (or repeat upgrader) figure. New Smartphone sales are slowing. This is due to all of the early adopters having already adopted them, and in all likelihood are now on their third or fourth device due to the length of contracts. So the user base is more familiar with the way smartphone work, and integrate with everyday life. There are less and less completely new users to the ecosystem. The pattern described above is attributed to these new users, so the 'snacking' phenomenon is decreasing. This is evident in modern examples of Apple and Samsung's advertising campaigns which are both aimed at the casual user, the fringes of their traditional market segments, such as the 40+/50+ or budget conscious.
Application market Stagnation? Or User Stability?
I think when you take these factors into account the figures make a lot more sense and can be explained more as a repercussion of user stability and established practices. Experienced users have experience using online App stores and don't download a dozen applications in the first ten minutes just to test them out and remove them. Downloads are more considered and planned, time is taken to find the right application as the novelty value of having ALL THOSE APP's(!!) right on your fingertips has gone. This really helps to separate the chaff, and poor applications find themselves falling by the wayside quickly.
Rather than having a statistic around downloaded applications it may be more useful to view how many times an application was opened on a mobile device. Typically applications that are kept by a user are more heavily used. Users end out in a model of fewer applications, but more heavily used.
If you want to view more or this, or see a statistical view then have a look at either of the following two articles:
http://www.theregister.co.uk/2014/01/03/christmas_app_downloads/
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New report recommends Limiting teens web access to two hours a day |
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A report released in the last few days by the University of New Mexico has recommended that a two hour per day limit on web access should be enforced by parents, on children.
The problem with this report is that it is let down by its traditional view on internet usage, and thus data consumption. The report has a central theme, and its findings also align to this theme, despite pointing out new device usage patterns within the report.
The traditional (historic) view of internet usage is that consumers require specific devices or workstations to access the internet. This lead to a 'resource' measuring model. Data and speed became the measurements for how fast your access is, or how much you are allowed to consume.
With the growth of internet and the ease of access to it, both from a proliferation of network access and the abundance of internet enabled devices this traditional resource measuring model simply isn't applicable anymore.
The modern view of the internet should be realigned to one of that of a persistent layer, a non-tangible pervasive entity that sits comfortably over our existing social infrastructure. This is quite a common view when you go back to classic internet literature like SteamPunk or Manga.
The internet is integrating into everyday life so much that it is becoming impossible to separate it from the fabric of everyday activity. We need to stop viewing it as a commodity resource and instead move it into an amenities category. Would you deny your children access to lighting or heating? No, you wouldn't but go back in history a little bit and you'll find that those two items were also rationed against a resource model.
The best thing you can do is inform them of best practices in using the internet. You wouldn't ban them from spending all day in a library, instead you'd teach them how to use it. Now this does rely on parents knowing how it works (often far less technology savvy than their children) and there is still a strong requirement to shape exactly what content they can get to. The idea here though is to shape their desire to access inappropriate content, rather than shaping their access to it. No present day internet management software can blanket cover all items of concern in terms of access, it just isn't possible.
Instead of trying to measure access out, why not help integrate it into everyday life, the usage pattern will develop on its own. Otherwise education establishments will continue to produce inaccurate reports based on historical understanding that just propagate a jaded view of our modern digital era.
A link to the Telegraph article is here:
http://www.telegraph.co.uk/technology/internet/10410349/Limit-teens-web-access-to-two-hours-a-day-parents-told.html
