The international voice market doesn't bring a lot of joy these days. (For that, may I suggest adopting a puppy?)
As we've written before, 2015 marked a turning point in the international voice market. It was the first time since the Great Depression that international call traffic declined, even if only by one half percent.
And it's been downhill ever since, as the slump in voice traffic has turned into a fact of life. Carriers’ traffic fell a further 9% in 2017 and then another 4% in 2018, to a total of 465 billion minutes.
The transition to mobile and social calling drove a 20-year boom in voice traffic, but it has also left the industry uniquely vulnerable to the rise of mobile social media.
While Skype was the dominant communications application for computers, a veritable menagerie of smartphone-based apps like WhatsApp, Facebook Messenger, WeChat (Weixin), Viber, Line, KakaoTalk, and Apple’s FaceTime, now pose a greater threat.
Both WhatsApp and Facebook Messenger topped 1.3 billion monthly active users in 2019, and WeChat is not far behind, with just over an estimated 1 billion active users in September 2019.
Both WhatsApp and Facebook Messenger topped 1.3 billion monthly active users in 2019, and WeChat is not far behind, with just over an estimated 1 billion active users in September 2019. TeleGeography estimates that just seven communications apps—WhatsApp, Facebook Messenger, WeChat, QQ, Viber, Line, and KakaoTalk—combined for over 5 billion monthly users in September 2019. These estimates exclude apps for which directly comparable data is unavailable, including Apple’s FaceTime, Google Hangouts, and Skype (the latter two of which have over 1 billion downloads from Google’s App Store).
It's hard to pin precise numbers on the volume of international OTT communications. However, a simple thought experiment helps to illuminate its likely scale.
Between 1983 and 2007, international phone traffic grew at a compounded annual growth rate (CAGR) of 15%, and traffic grew an even faster 21% CAGR between 1927 and 1983. It's hard to believe then that the recent decline in traffic means that people have lost interest in communicating with friends and family abroad. Rather, it suggests that they are turning to other means of keeping in touch.
TeleGeography has fairly reliable estimates of Skype’s traffic through 2013, when the company carried 214 billion minutes of on-net (Skype-to-Skype) international traffic. Telcos terminated 547 billion minutes of international traffic in 2013, and OTT plus carrier traffic totaled 761 billion minutes.
If we assume that total international traffic has continued to grow at a relatively modest 13% annually since 2013, the combined volume of carrier and OTT international traffic would have expanded to 1.35 trillion minutes in 2018, and to 1.47 trillion minutes in 2019.
If we assume that total international (carrier plus OTT) traffic has continued to grow at a relatively modest 13% annually since 2013 (with a drop to 9% in 2018 due to texting, video, and email), the combined volume of carrier and OTT international traffic would have expanded to 1.35 trillion minutes in 2018, and to 1.47 trillion minutes in 2019.
This calculation suggests that cross-border OTT traffic overtook international carrier traffic in 2016, and would top 1 trillion minutes in 2019, far exceeding the 432 billion minutes of carrier traffic projected by TeleGeography.
Paul Brodsky
Paul Brodsky is a Senior Research Manager at TeleGeography. He is part of the network, internet, cloud, and voice research team. His regional expertise includes Europe, Africa, and the Middle East.