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Emerging Markets Fuel International Call Growth

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Image from Kassfm.co.ke
Image from Kassfm.co.ke

International telephone traffic continues to grow, despite facing a myriad of formidable challenges a research by TeleGeography firm has revealed.

The research detailed that International traffic grew six percent in 2013 to 542 billion minutes and is projected to reach 569 billion minutes in 2014.

According to the research firm , while growth is slowing, international call traffic has quadrupled since 2000, driven by a fundamental shift in international calling patterns. In 2000, two-thirds of all international calls were made to people in high-income advanced economies, and fixed-line phones in advanced economies received just over half of all traffic.

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Today, those positions have been almost completely reversed. Between 2000 and 2013, traffic to mobiles in emerging markets grew at an annualized rate of 32 percent, to 245 billion minutes, while traffic to fixed lines in advanced economies grew a paltry four percent annually, to 109 billion minutes. Mobile phones in emerging markets now receive 45 percent of all international traffic and emerging markets account for 63 percent of all terminated international telephone traffic.

 The proliferation of mobile phones in emerging market countries, which have enabled immigrants to call their families at home, and relentless price declines, which have made calling home increasingly affordable, fueled the rapid growth of emerging-market traffic. However, this engine of growth is starting to sputter: in 2013, traffic to mobiles grew just nine percent.

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“The long boom in traffic to emerging markets was driven by rapidly increasing mobile phone penetration and declining call prices,” stated TeleGeography analyst Cody Williams. “However, phone penetration is nearing 100 percent in many emerging market countries and, after years of price declines, the incremental effects of further price reductions are also diminishing.”

The abating pace of growth to emerging markets suggests that challenging times lie ahead for carriers, which must also contend with relentless price declines and growing competition from over-the-top communications services. However, with 8.3 billion fixed and mobile subscribers at year-end 2014, the PSTN will not fade away anytime soon.

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Susan Mwenesi
Susan Mwenesi
Interested in business, technology and all things startups in Africa!

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