Thursday, January 5, 2012

Why Do People Use Landline Voice?

From a fixed network service provider perspective, there are some perhaps-worrisome findings in a recent survey by KPMG International of 9,600 consumers in 31 countries, even though the survey also suggests most people have landline voice service.

Some 80 percent of respondents to a global survey say they have landline voice service, which some (including KPMG International) might say that shows the resilience of demand for fixed line voice service.

That isn’t the only logical conclusion, though. The survey also suggests 52 percent have a voice landline because it is necessary to get their Internet connection.

That might suggest that in many cases, purchase of the first product (voice service) is necessary to buy the second product (Internet access). KPMG International survey

Such “product tying” can continue to work so long as consumers have no other alternatives.

But some also would say actual demand for fixed network voice lines cannot be determined with any precision when “sell through” is required. I other words, some people might buy landline voice because they have to, to get Internet access.

Though such tying practices increasingly are rare in many markets, product pricing generally aim to provide incentives to consumers for buying both products, or a triple play, together.

The good news is that lots of customers are rational buyers. They say they buy voice service because it is more reliable than mobile or Internet voice, or because landline is more effective for some applications.

Business users likely can provide better examples of those values than many consumers can do, and it is the business markets where one might argue the value of fixed-line IP telephony is most germane.

The worrisome results could lie in the great number of people who say they buy “out of habit,” since habits can change, or who report that they buy landline voice to get Internet access.

Over the past 12 months, around four percent of respondents to a KPMG International survey seem to have eliminated their landlines but more than 80 percent still believe their landline is important.

Also, globally, more than 80 percent of respondents indicated that they have a landline service, with the highest concentration found in Asia Pacific (83 percent) and the lowest (76 percent) in Europe, the Middle East and Africa (EMEA).

Almost a quarter of all respondents from Europe,the Middle East and Africa have no landline at all, versus 17 percent in Asia Pacific and 22 percentin the Americas.

Many respondents also seem to hang on to their landline for reasons of comfort. Some 45 percent said a landline felt more reliable. This may represent a massive opportunity for operators that can leverage this ‘stickiness’ to launch additional services over landlines that drive new revenue streams and models, KPMG International says.

The KPMG data also found that the propensity to maintain a landline depended on the age of the consumer. Only 72 percent of people aged 16-24 report having a landline, versus about 88 percent of those over 45 years of age.

The survey was conducted in the summer of 2011 and included 9,600 consumers across 31 countries. All surveys were conducted online, except in Nigeria and Saudi Arabia where telephone interviews were conducted. All respondents had to own either a laptop or notebook computer, tablet computer, smart phone or mobile phone.

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