Welcome to my old blog, which I no longer maintain.

For details of my current professional services and activities see www.martingeddes.com.

November 6, 2003

Holy ****

I was just doing some computations today on my fingers and toes on the scale of the problem of replacing voice revenue at a hypothetical telco totally unrelated to my employer:

  • Revenue of said hypothetical telco: $25bn
  • Proportion that is voice: 80%
  • Voice revenue: $20bn
  • Proportion of voice revenue that is service rather than access: 50% (e.g. $35/month for DSL and $35/month for Vonage - OK, it's probably more like 20:1 in favour of access, but we're only trying for order of magnitude).
  • Gartner prediction for last circuit-switched PSTN call: 2020
  • Today: 2003 (i.e. 17 years to go)

Assume you retain 100% of access fees, lose 100% of service fees. Assume wireless and wireline go 100% IP-based.

Some numeric prestidigitation means that on average you need to find $600m of new business EVERY YEAR for the next 17 years. This needs to be conjured up from completely new intermediary roles and new services: access revenue is already factored in. And this is just to stand still. Oh, and it's front-loaded since most of the people who are motivated to leave because they're paying a lot will leave in the early years. The last person with a pure circuit PSTN line will be a sad case indeed. So you're probably looking at having to invent a new billion dollar business every year. Without fail.

Holy schmoly.

Posted by Martin Geddes at 12:13 AM
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