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Wireline Telcos Have Tough Choices to Make

Infonetics Research released its new fixed and mobile communications subscribers market forecast report, and it's now apparent that the continued decline of legacy "phone service" will change the face of the industry, forever.

The global recession did not prevent people from using communication services, but it clearly accelerated the pace of wireline-to-mobile substitution.

China, which had half a billion mobile subscribers in 2008, and India together make Asia Pacific the world's largest mobile subscriber region -- now and into the future. The EMEA region is next, with strong growth driven by Africa.

"Mobile subscriptions will continue to grow strongly over at least the next five years, driven mainly by basic voice service needs in these regions, particularly in BRIC countries (Brazil, Russia, India, and China)," projects Stephane Teral, Infonetics Research's principal analyst for mobile and FMC infrastructure.

How can wireline telcos in developed markets replace the lost revenue and higher profit margins from their legacy services? They're often slow to innovate, and they enter markets with significant new infrastructure investment when the potential has already peaked -- think traditional pay-TV services, and their me-too IPTV offerings.

Highlights of the Infonetics market study include:

- There were nearly 4 times more mobile subscribers than access line subscribers worldwide in 2008 (3.9 billion vs. 1 billion).

- The number of mobile subscribers grew 17.4 percent in 2008 over 2007, while access line subscribers declined 5.5 percent.

- Access lines are disappearing fastest in North America and China, due to the move to fixed-to-mobile substitutions, the switch from copper to fiber lines, and the recession, during which many people ditch their landlines and keep only their mobile or smartphone.

- The number of worldwide mobile subscribers will reach 5.9 billion by 2013.

- The number of fiber access (PON FTTH) subscribers worldwide is expected to soar at a compound annual growth rate of 32 percent from 2008 to 2013.

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