Why triple play offers won't save the telcos

Another week, another gloomy forecast for the telecoms industry. UK-based tech consultancy Analysys has forecast that Western Europe's fixed-line telecoms providers like BT Group and Telecom Italia will see a further decline in what it calls "legacy voice revenue", a business that up until the consumer internet age was a solid money spinner. Revenues from such mainstays as voice calls and leased lines will decline by 53 per cent between now and 2012, Analysis says. The same business has already dipped 12 per cent since 2004.

The culprit is a combination of things. Voice over IP (VoIP) is taking off, seriously cutting into the fixed-line providers' cosy margins on voice calls. Secondly, regulators are opening up the telecoms market, country-by-country. In France, a more competitive market has spawned a new generation of rivals to France Telecom such as Free which offers the triple play of voice calls, broadband and TV for roughly €30 (£21) per month.

Analysys says triple play offers will not make up for the declining "legacy voice revenues". In other words, the continued growth of broadband subscriptions and the rollout of IPTV is not going to save their eroding revenue base, says Rupert Wood, a principle analyst. Wood adds broadband and data services will eventually account for nearly two-thirds of the fixed-line telcos' retail revenue. But with the dubious margins attached to such offerings, the overall picture is looking increasingly murky.