The Slow Demise of the Land Line
The Telco landline is slowly retiring. A Jupiter research report surveying landline decline for 2006 and 2007 has landlines declining at 1% to 1.7% each quarter. Is this a good thing?
The Telco landline is slowly retiring. A Jupiter research report surveying landline decline for 2006 and 2007 has landlines declining at 1% to 1.7% each quarter. Is this a good thing?The Jupiter report found that 12% of the voice customers do not have a landline. Of this group, "nearly 2/3 of them are ages 18 to 34". Still, about 70% of voice customers have a landline even when they have cell phones. Further, 15% have voice service from a cable company and 3% have service from an ISP.
The actual number of landlines will be smaller with each decline and may start to level off in a few years. Will the landline completely disappear soon? No, there will be locations where the investment for cable or cell phone provisioning will be too expensive.
This is alarming to the traditional Telco fixed line provider. The report also found that 12% of the landline customers intend to replace their home voice service with cell phone service exclusively. As the customer base ages, the trend to cell service will increase, while the landline service will slowly decrease.
If you look at a map of the cell services in the U.S., you will see large territories with no cell service. The landline will continue to service these customers. The disadvantage to these remaining customers will be a lower revenue base for the Telcos that will still have support the landline services. The smaller the landline customer base, the higher the cost per customer. The Telcos will have to raise landline rates to acquire enough revenue to cover their costs. This will push more voice customers to look for cell service. The Telcos may then offer more landline packages with a fixed fee for all domestic calls. This will also raise the rates for the enterprise that needs to have landline access to the PSTN to retain the landline customers.
I think there are other factors that will also push the demise of the landline. The VoIP services from cable companies; Telcos like Verizon's FiOS voice service with TV and Internet access; and the ISP phone services will also push the landline to near extinction. The accelerating offering and use of SIP trunking for all sizes of enterprise and organization will further push down the use of traditional landlines. Recent announcements for SIP trunking from the Telcos offer 2 to 700 calls per SIP trunk. This makes SIP trunking available to the very small enterprise that is replacing their key system with IP based products.
What will we lose as the landline disappears? I for one expect the high availability of the PSTN for voice calls. The cell services still don't match it. I worry about 911 and E911 service being pervasive everywhere, which they are not today. I also want the consistent voice quality of the PSTN. Will the Telco revenue decrease also lead to poorer PSTN service quality and longer repair times? Probably.
A funny paradox is that when I speak on VoIP subjects for a webcast, I am instructed to not use a cell phone or VoIP service but must use a PSTN landline connection for the voice quality and reliability. The loss of the PSTN call will most likely lead to longer webcast recording times, for corrections, and more webcast editing.