Cellular Voice is now a Commodity

apple-watchAs has always happened with every major telco product, cellular voice has probably reached the point where we can consider it to be a commodity. In economic terms, a commodity is a basic good that is reasonably interchangeable with other goods or services.

A brief history of cellular voice is probably the best way to show how the product has changed over time. I remember when cellular voice was introduced. At first it was an extremely rare product and only rich people or those whose jobs demanded mobility at any cost had cellphones. The units were huge and heavy and mostly were used in cars. Users paid a steep price to gain mobility, which was the first value proposition of the cellphone.

Cellular voice became a mass market product when the size of the cellphones shrunk and the batteries got good enough that they could hold a charge for a reasonable amount of time. Various versions of flip phones became popular and millions were sold. These early cellphones had lots of innovations other than just being mobile. For instance, I remember seeing a coworker buy an early flip phone that had features that we now take for granted. The phone stored your whole rolodex of contacts. But even more impressively, the phone kept visual track of who had called you and when. And long distance largely disappeared when the cellphone companies started selling minute plans instead of long distance plans.

But then came smartphones and cellular voice started taking a back seat. Data became the rage but all of the market emphasis was on using your phone to surf the web and to take advantage of the burgeoning wireless data business. The telephone part of the product was still important, but this is about the time when we saw cellphone companies start to blend in the pricing of voice, text and data into one bundle. People became less willing to pay high prices for voice and texting, and so the price of those products was buried into the monthly rate.

Skip forward to today and it’s easy to see that voice has lost all cachet. I have a teenage daughter and using the voice capability of her phone is at the bottom of her list along with email. She much prefers to communicate with pictures, emojis, text messages and social media sites rather than actually talk to somebody on the phone. She’ll do it, but she clearly would rather communicate in some other way. In fact, she does the majority of her communications these days using an Apple smart watch, where she talks into the watch which then sends her message as text. She doesn’t even need a smartphone for most of her communications.

And the business world has also moved away from traditional voice. For instance, it’s routine for me to have conference calls using various web conference services that allow me to talk and listen through my computer.

One of the best indications that cellular voice is now a commodity is that there are now many willing to give away voice for free. Billionaire Mukesh Ambani in India is now giving away free voice to anyone buying a cellphone data plan. In this country there are a number of cellular providers allowing unlimited free calling using WiFi.

Cell phone companies are going to be offering voice as part of their products for a long time. But one has to wonder as we move to smartwatches, smart assistants like Amazon Alexa and a future of various wearables if we won’t soon stop using the word ‘phone’. My daughter’s smartphone is rarely used for the ‘phone’ features, and the time comes soon when she can ditch the phone completely I think she’ll gladly do so.

2 thoughts on “Cellular Voice is now a Commodity

  1. In the Heavy Reading study Migrating Service Provider Voice Infrastructure to the Cloud, 69% of service providers respondents said that fixed voice will eventually be a free application.

    But 81% of CSP respondents agree that voice helps drive adoption of other services in portfolio. So voice is still key (and can be profitable for some time).

    Read more on the study here: http://www.alianza.com/call-to-the-cloud/heavy-reading-cloud-defines-new-voice-strategy

    • I completely agree Kevin. What is becoming a commodity is residential voice. There is still a huge market for business voice services and those specialized products are not commodities.

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