Can new Telecom owner halt decline in number of fixed line telephones?

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Over the last half decade or so there has been a dramatic fall in the number of old-fashioned, fixed line telephones here in the Czech Republic. Telefonica O2 (formerly Cesky Telecom) says there are now 2.84 million fixed line phones in this country - that's close to a million less than in the year 2000. What has led to this sharp decline? And will services like TV over the phone persuade Czechs to keep their fixed lines? I spoke to Emir Halilovic, senior analyst at communications group IDC CEMA.

"Simply, the first reason is the huge uptake of mobile services, and the migration of voice services to mobile. You have had probably a growth of...from less than 10 percent to over 100 percent penetration of SIM cards in the population.

"That's a huge amount of voice traffic that actually was exclusively fixed before, let's say, 1998. Right now you have most of voice traffic routed over mobile lines."

There's been about a 25 percent fall in the number of fixed lines here in the Czech Republic - how does that compare to other countries, either in the region or in Europe as a whole?

"Western Europe and eastern Europe basically follow the same trend, more or less. The differences are first in the starting level of penetration. Western European countries have had [fixed line] penetration of more than 50 percent, in general.

"In central and eastern Europe only a couple of countries are over 40 percent and most of them are between 25 and 35 - including the Czech Republic. The Czech Republic is more or less in the middle of that trend.

"You had countries where you had a much higher decrease, like Lithuania for example. Lithuania lost I think thirty percent in about two years, three years."

Telefonica - previously Czech Telecom - say they want to halt this decline in the number of fixed line phones in this country by introducing new services, such as for example television. What is TV over the phone?

"In general it's video content distribution over high-speed broadband lines - it's more or less video streaming technology. Whether this is going to decrease the fall, or the drop in the number of fixed lines...I don't think so.

"Actually, let me put it this way - it may slow the drop but it's not going to stop it altogether, not in the mid term, which in our lingo is two years.

"The reason why is that the number of people who disconnect their fixed lines, because their main and primary need for communication services is still voice, is going to remain stable."