Fixed-line Phones Set For Extinction
The Age
Friday February 24, 2006
THE days of Telstra's circuit-switched telephone network that has served Australia for a century may be numbered.
According to research commissioned by Vodafone, the largest mobile phone company in the world and one of the "big four" mobile operators in Australia, 1.4 million Australians are likely to ditch their fixed-line phones in the next two years.At the same time, while most of Australia's 18 million mobile phone users still maintain their fixed-line phones at home, the shift of call traffic away from the terrestrial network and on to mobiles continues to increase.Closure of fixed line connections simply adds to the erosion of revenue from the public switched telephone network (PSTN) that Telstra has been suffering for several years.That supports Telstra's strategy, announced by chief executive Sol Trujillo last November, of moving its entire network system to internet protocol.It wants to improve its terrestrial network by extending its fibre optic cables to street corner nodes (fibre to the node or FTTN) but has not gained assurance that this investment would receive regulatory protection.Telstra says for that reason it has FTTN on hold and is now concentrating on building a high speed wirelesss "third generation" (3G) mobile network to cover all of Australia, from crowded central city business districts to rural remoteness.In his half-yearly financial report, issued on February 9, Mr Trujillo said PSTN revenue had dropped 7.6 per cent, or $313 million in the half year, compared with a decline of 3.4 per cent across the full 2005 year.The decline in fixed-line revenue is forecast to continue and to accelerate to above 12 per cent per annum over the next 12 months.About four in every 10 Australians now say their mobile phone is their main point of contact, the Newspoll survey commissioned by Vodafone shows. About 40 per cent of respondents said they had friends who had ditched their fixed-line phones and 22 per cent more said they would not continue with a fixed-line if they moved house.More than 80 per cent of Victorians now have mobile phones and 36 per cent of them say their mobile phone is their principal point of contact.Edward Goff, general manager of Vodafone for Victoria and Tasmania, said yesterday that the affordability of capped mobile plans was a major factor in the switch and the addition of special interstate and international rates within the capped plans was accelerating the trend.The survey found the shift away from fixed lines is likely to accelerate as Australians move to third generation mobile broadband, or 3G.
© 2006 The Age
