richardblundell.net | Telecom trends in 2011 - decline of SMS and landline, growth of mobile internet

2011: the year we ditched the landline, lost interest in SMS and adopted the smartphone

December 18, 2011 by Richard in Economics, Front Page Feature, Internet, Telecommunications with 3 Comments

We have become so used to rapid changes in technology that we can lose perspective on shifts and trends. Nearly every day we see a new app, every month a major new device is launched, and every few months many of us make another fundamental change in how we use technology.

Telecoms businesses bear the brunt of these changes in our behaviour with technology so they are a great place to look for data on trends. I’ve just taken a look through data from Telstra*, the former national telco of Australia, and from the Australian Bureau of Statistics and there are some very clear trends:

More phone calls are now made from mobiles than landlines
We are making around 12.5% fewer phone calls than five years ago
Texting is in decline, having peaked in 2010
The average mobile user is now downloading 260% more data than a year ago
Overall Australian internet data use is up 64% on last year

Australians are not usually early adopters so these findings are likely to be reflected the world over.

Phone usage: mobile overtakes fixed line

2011 was the year in which calls from mobiles overtook calls from landlines.

In 2011 an estimated 16.4 billion minutes of calls were made from landlines on Telstra’s network compared to 13.5 billion minutes from Telstra mobiles. On the face of it then, the landline still rules. However Telstra retails 80% of landlines (8.5 million of Australia’s 10.7 million fixed lines), but has a lower share of the mobile market at around 50% of subscribers. Assuming Telstra and non-Telstra customers behave the same way, we get the following phone call volume estimates

	2010	2011
Calls from landlines – minutes	22.6 billion	20.5 billion
Call from mobiles – minutes	22.9 billion	27.0 billion

In 2010 the two call formats were about equal, but in 2011 mobiles became the preferred calling device.

The UK seems to be seeing a similar tipping point according to a report a few months ago in The Daily Telegraph

Phone usage: we are calling less than five years ago

The overall call minutes from Telstra customers show a year on year decline but this is exaggerated by the shift from landline to mobile, where Telstra has a lower market share. Despite the exaggeration, overall call volumes are still declining.

On a five year basis Telstra landline call volumes have been falling by 9.9% a year while Telstra mobile call volumes have only been growing at 7.5% a year. This suggests an average decline in wider Australian phone usage of 2.4% a year, or 12.5% over five years.

2011 slightly skews the data as Telstra saw extra growth in mobile subscribers, and therefore absolute mobile call volumes. The five year story however remains consistent – call volumes through all devices are down.

Mobile usage: we are each sending 9% fewer texts but using 43% more internet data than last year

This data shows mobile usage for the average subscriber: call and text volumes are from Telstra, data volumes are from ABS and so are based on all networks.

Calls per phone have been flat – last year’s increase in mobile calls was on the back of more phones
SMS texting peaked in 2010 and started to decline in 2011 – the average user sent 810 texts in 2011 compared to 881 in 2010
Data use has mushroomed – in June 2011 the average phone was downloading data at the rate of 1601MB per year, up 260% in 12 months

Clearly the changes are been driven by the types of phone in use. Email and internet access on phones is now commonplace and its use is replacing the humble SMS.

Internet data: traffic has grown by 64% in 2011

Australian Bureau of Statistics data shows that by June 2011 the amount of data being downloaded through the internet was running at an average of 87.5 GB per subscriber per year, or 7.3 GB per month.

On a per subscriber basis this is 43% higher than in June 2010 when it was 61.1 GB per year. But because the number of internet subscribers has grown by nearly 15% in twelve months to 10.9 million, the overall amount of data being transferred in Australia is up 64% to 77,700 TB per month.

The surge in 2011 partially reflects Australia starting to get better infrastructure. I would expect the increase to have been less in the US where the infrastructure is of a much higher quality overall.

So, while some clear and not unsurprising shifts have occurred in the last five years, in 2011 several telecom trends reached an inflexion point

Mobiles overtook landlines for making calls
Texting went into decline
Accessing the internet through a mobile became mainstream

Notes

* Telstra’s data makes a good case study as it has retained its dominant position in the Australian market across fixed line, mobile and internet so it reflects Australian behaviour. It also publishes very detailed datasets compared to the likes of BT, Deutsche Telekom and AT&T. And since the Aussies are not known for being particularly quick adopters of technology, what is happening for them is likely to be reflected elsewhere in the world.

3 Comments

PeterJan 2, 2012 at 7:35 pmReply

While the Telstra data is relevant until recently this carrier was baised to business and older private customers and generally did not have significant SMS discounting. Other AS carriers had the bulk of prepay and capped plans where SMS was more widely used.
A second point is that as a population Australia is considered to be early adopters of many ICT initiatives at least by Telstra. That isn’t to say they are the first but in general if a technology takes off in Australia it can normally be expected to be sustained in the world market.
RichardJan 4, 2012 at 10:54 amReplyAuthor

Thanks for your comments Peter.
I would just say that the SMS data was from the ABS and so covers all networks – Optus, Voda, Virgin and Telstra. Most of the other data was only about Telstra which as you say is slightly biased towards:
- non-metro areas
- business users
- older users
JenniferFeb 8, 2012 at 10:41 amReply

Very few ppl use email on their phone. Texting is most common. email on a phone is to slow compared to texting. I would not 100% believe phone company stats . The eu provider Vodafone has been caught saying its usage is declining and people are not topping up their prepaid phones as often. What people are spending and what they declare to the tax man seem to be 2 different sets of facts. Landlines usage has falling across the board but with regards to mobile calls – Voice quality not reception is the biggest downfall. Over compressed voice is alot worse that the perfect off foke landlines . 3g/4g (kills battery quicker than 3g) is slowing down as more people are using wifi. The mobile phone networks are not able to cope with the demand. Its 2012 one base station of tower, whatever ppl say can hold 56calls at the same time. 56 calls in one cell in this day and are. The point in stating that is to show the whole system can manage only a certain amount. Biggest complaints about phone are still
RECEPTION
SLOW SPEED
VOICE QUALITY.