Data on the rise as voice is relegated

IT’S the beginning of the end of voice as a means of communication by phone. In recent weeks, Vodacom announced in its interim results that, for the first time in its history, voice revenue had fallen. It was a paltry drop — a mere 2.6% — but it was enough to send shock waves through the industry.

At the same time, data revenue shot up by another 20%, after consecutive increases of 30% to 50% over previous equivalent periods.

This week, new research by World Wide Worx showed that the average adult spent 65% of their phone budget on voice, down from 73% in mid-2012. Data spend has gone up from 12% to 16% in the same period.

Most significantly, the Mobile Internet in South Africa 2014 report also shows that the shift has been greatest in the 19-24 years age group, where the average user now spends 23% of phone budget on data, up from 17% last year.

While the shift is not much lower in older age groups — each age segment up to 46-55 is spending at least 15% of budget on data — it is clear that, as the current younger market moves into the next age band, the shift will accelerate.

For the mobile networks, the move to data is a challenge in its own right. Voice had always been a cash cow. The problem with data is that competition comes from other mobile networks as well as from internet service providers, WiFi hotspots and even the internet connection at work.

But there is an even more formidable challenge on its way, and one that will not only change the industry, but could also herald a transformation of society.

Lurking within the spending and revenue change is a shift from verbal communication to textual or message-based communication.

One of the clear clues is the dramatic rise in uptake of instant messaging services. WhatsApp has increased its penetration of the adult market from 26% to 53%. Facebook Chat stands at 45%. Mxit remains steady at 25%. BlackBerry Messenger has increased from 17% to 21%.

Newcomers like 2GO and WeChat are used, respectively, by 8% and 5% of adults.

All of these services drive increased data use, directly at the expense of voice. But it gets worse, even in the good news for the networks that SMS spend remains constant.

It is telling that, in the breakdown of spending patterns, SMS has remained at the same level of average spend — between 12% and 13% — for the past three years. This is one of the clues that suggests the move to data is not only about data for its own sake; it is in fact

Younger users will embrace SMS as an option to keep away from voice

underpinned by a move from voice to text-based messaging in general.

SMS, even at its absurdly high cost, remains the most pervasive text messaging platform in the world.

So, when younger users stop talking and start messaging, SMS is part of that mix. Ironically, as older and more sophisticated users abandon SMS for the cheaper instant messaging services, younger users will embrace SMS as a necessary option to keep away from voice.

The next generation will be a messaging-oriented generation, possibly even forgetting the art of conversation, the way the current generation is forgetting the tradition of letter-writing.

The only surprise will be if the world is surprised that speech therapy is replaced by speaking therapy.

Arthur Goldstuck is founder of World Wide Worx and editorin-chief of Gadget.co.za. Follow him on Twitter on @art2gee