This report forms part of Ovum’s Digital Economy 2025 series and looks at how communications services will evolve over the next ten years.
The need to communicate will be just as strong in 2025. Total communications traffic will grow to 68.5 trillion minutes in 2025, equal to 23 minutes per day for every person on the planet. The spread of IP-connected devices and the increased availability of screens will also mean that communication can be initiated from virtually any device, from anywhere at almost any time.
Communications revenues will not grow in line with demand. Despite demand growing, revenues will decline and CSPs must address this mismatch. Overall, all communications traffic, on an equivalent minute basis, will grow at a CAGR of 8%. However, revenues will fall by 4.4%. Competition from CSPs and non-CSPs will result in price declines.
Future success will depend on efficient delivery on the network. The cannibalization of voice revenues is acting as a catalyst for CSPs to upgrade infrastructure in order to reduce costs, support better quality of service, and enable new product development. With traffic increasing but communications revenues falling the only option for success is to remove cost from the business and have efficient delivery of the services over the networks. New technologies like 5G will require investment, but there must be cost savings and economies of scale in the network for the business to survive in 2025. Almost all voice will be delivered via IP by 2025. Most voice traffic will move onto IP as the transit network both for CSP and non-CSP players, bringing long-term cost benefits to CSPs.
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