THE BLOG

The Death of the Fixed Landline Phone Call

08/12/2014 15:33 GMT | Updated 07/02/2015 10:59 GMT

UK telecoms companies are about to increase their fixed-line phone charges. Ten years ago this would have led to the technological equivalent of riots in the streets. It would have been front page news. But today? Nope. Hardly a squeak.

The meteoric fall of the fixed-line telephone is one of the 21st Century's great examples of the way technology can advance so quickly that it kills the old technology without us even noticing. Let's face it, when was the last time you even thought about making a real phone call from a telephone fixed to a cable in the wall of your house?

The latest figures from UK telecoms regulator Ofcom are startling. In the year to June 2014 we spent three billion fewer minutes on landline calls, a reduction of 12.7 per cent. That means operators lost out on £85m of revenue compared with the previous year. The situation has got so bad for landlines that according to research by RootMetrics, 95 per cent of us would not struggle without a fixed landline telephone.

This lack of landline calls has not gone unnoticed. In October, the EU Commission announced that it would no longer regulate fixed-line calls. So few people still use an old-fashioned telephone that it was just no longer worth their while bothering about them. With a large dose of understatement, Neelie Kroes, the outgoing VP for the European Commission overseeing communications and technology said: "There has been a decrease in volume of fixed calls as customers have turned to alternative solutions, such as voice-over-IP (VoIP) and mobile calls, but also to alternative providers, like Over-the-Top (OTT) players."

We've come a long way since the telephone sat, in pride of place, on a table in the hallway. When I was a kid, the home phone was a thing of mystery - still regarded by many of the older generation as new-fangled technology not to be touched or played with. As a teenager it had the ability to control my social life, dictating whether I'd manage to meet up with my mates and when Trim phones were invented we thought we'd all entered the space age!

These days of course, like approximately 61 per cent of UK adults, I have a smartphone that's with me 24/7 and I can't actually remember the last time I made a phone call from my home landline. This is fairly typical behaviour these days. We all want, and often because of work, need to be connected all the time, everywhere. And this accounts for the massive rise in popularity of mobile VoIP calling apps.

The global market for VoIP apps is exploding. Take one of the world's most popular calling apps: WeChat, or Weixin as it's called in its home territory of China. It has more than 600m users worldwide, more than a quarter of all global users, and its customers have increased 150 per cent in the last 18 months.

However, WeChat has competition, especially in the East. The Indian messaging app Nimbuzz has 200 million users in 210 countries and hit the headlines last week when it launched Holaa!, a free call management app for Android devices aimed at emerging markets. And that's really where the new growth is. Not in the western world but in China and India, the Middle East and Africa; in fact, anywhere outside of Western Europe and the USA. These developing countries are driving the surge towards mobile, often in-app, VoIP calling.

What killed the landline was not just its inflexibility but also cost. VoIP calling apps are free. There is generally no charge for calls that are peer-to-peer and no standing charge for line rental. When a great quality product is free, it's never going to be anything else other than incredibly popular. And if you live in a country where money is tight for the vast majority, then you're always going to choose the free option. It's not rocket science.

The Millennium generation have grown up with a mobile in their hand. In the future, triple and quad play will be replaced by Over-the-Top (OTT) services as more educated, tech savvy consumers opt for good data connectivity and add-on OTT services to complement the way they use the Internet, and in particular, view content.

This is one area where the big telecoms companies are increasingly going to struggle to compete. They're not necessarily as agile, flexible or tuned into the market. They're already behind in many areas and they know it. The next few years will see the inexorable rise of Eastern app developers and it's going to be fascinating for all of us.