So, just got back from the ITW show in Chicago. Chicago is a great town, and the event gives everyone a chance to meet face-to-face with their industry colleagues and do business the old way, rather than in today’s technological interface, but on a human level.
That aside, what the show demonstrated, or at least reminds us, is that interconnect voice still matters. Yes per minute rates and per minute margins continue the long slow march to almost zero, yet even with that reality, the industry is still thriving. We saw new companies, new carriers, and new solutions being offered in the voice marketplace. Of course, data continues to become a bigger part of the marketplace, and that is reflected in the volume of data solutions being offered and data oriented companies attending, exhibiting, and working the ITW show.
What is undeniable, is that voice still matters. Sure there’s the business side of it with its large volume revenue dollars and improved asset utilization, but the reason voice matters is because the volume isn’t declining. Here are the highlights of the most recent FCC International Telecommunications Traffic and Revenue Data report (from 2014):
- The number of providers filing traffic and revenue reports increased by 30 percent. The number of providers increased from 1,457 in the previous report to 1,896 in this report, which includes, for the first time, 354 Interconnected VoIP Service providers.
- Total revenues from U.S. consumers decreased compared to previous years (even with the increased number of providers filing in this report). U.S. International Service Providers billed U.S. customers $3.87 billion for 73.6 billion minutes in 2013. U.S. International Service Providers billed U.S. customers $3.7 billion for 84.7 billion minutes in 2014.
- Of the total 84.7 billion minutes billed in 2014, 49.4 billion minutes were completed on foreign fixed-line networks, and 35.3 billion minutes were completed on foreign mobile networks.
- U.S. International Service Providers incurred approximately $2.6 billion in settlement payouts; $1.0 billion were for minutes completed on foreign fixed-line networks and $1.5 billion were for minutes completed on foreign mobile networks.
So the industry, despite the limited headroom for revenue growth is actually pretty healthy. U.S. based companies paid $2.6 billion (that’s billion with a B) in settlement payouts.
While the demise of voice telecommunications has long been predicted, turns out, as a famous quote as attributed to Mark Twain says, “the reports of my demise have been greatly exaggerated."
To learn more about the FCC report go here: