Landlines disappearing near you soon
July 24, 2008 Leave a comment
Came across this article on dvorak.org/blog about the decline in landlines across the US:
With millions of Americans snapping up the iPhone, AT&T, the exclusive U.S. carrier for the popular phone, should be quite pleased with the stream of revenue it can expect from customers.
But AT&T, the biggest telecommunications company in the United States, has a problem: analysts say consumers are dropping traditional landlines faster than expected. The company, which still gets 32 percent of its revenue from its landline business, was scheduled to report its second-quarter financial results Wednesday and was expected to talk about how its traditional phone service is contracting.
AT&T is not the only company facing a changing environment in the communications business. All of the major U.S. telecommunications companies – AT&T, Verizon and Sprint Nextel – are figuring out how to make more money from customers as they spend more time sending text messages or browsing the Web on their cellphones, rather than talking.
I don’t think this has anything to do with the iPhone, but it has everything to do with the fact that cell phones have replaced landlines almost completely, making them completely redundant, and with the fact that Skype is so cheap. Consumers are using cell phones for the convenience and Skype (or whatever system) for the (lack of) cost. A landline costs and is inconvenient because you can’t take it with you.
And I don’t buy the argument that the cell phone companies are having a hard time making money, we pay for the minutes whether we use them or not, and the minimum cell phone plan costs four times what the minimum landline plan costs, not to mention the contract the penalties for early termination. Finally deploying cell phone infrastructure is a lot cheaper than deploying landlines, you only have to look at Europe and Asia to see that.
The business of telephony is changing, out with the old and in with the new.