As cell phones continue to grow in popularity and cell phone prices and monthly service contracts continue to decrease, American consumers are ditching their landlines in favor of cell phones as their home phone.
In the last ten years, the impact that mobile phones have had on landline usage has been enormous. In June 2010, statistics from the National Center for Health reported that one in four Americans has given up their landline and now uses their cell phone exclusively.
There are several reasons why many consumers have ditched the landline in droves to rely solely on their cell phone. One reason is that, to some extent, many alternative means of communication have reduced the number of telephone calls that telephone users make. Many of these means of communication can be used through a mobile phone. For example, many use their cell phone to get and send emails, send messages on Facebook and other social networks, and send text messages to name a few.
In many ways, therefore, the decline of landlines and the rise of mobile phone usage is not just a transition from one type of phone to another. The decline of the landline is also a reflection of how individuals have changed in our preferred means of communication. As a culture, we have embraced new technologies, alternative ways of contacting each other, and even new ways of being marketed to by companies. The public has become more open to being contacted by mobile/web marketing companies. ABI conducted research in February 2010 which found that 45% of respondents were satisfied with the concept.
There is evidence that the decline in landline usage can also be attributed to the current economy. As more and more people started using mobile phones, households continued to pay for landlines because they were used to having them. With the decline of the labor market, many households had to choose between a fixed line and a mobile phone. Since a cell phone can be used almost anywhere, is often cheaper than a landline, and cell phones have additional features such as Internet access, a cell phone becomes the obvious choice.
In addition, the current economy has led to a huge increase in home foreclosures, which has led to the disconnection of landlines. Reportedly, in 2008, vacant homes in the United States were at a record three million. Additionally, within the telephone company industry, AT&T reported a 5.6% decline in landline usage in 2007. Verizon reported a 10.9% decline in 2009, while Qwest Communications reported a 17% decline in landline usage from March 2006 to March 2008.
While these numbers seem overwhelming for the current industry to find a reason to keep fixed phones afloat, AT&T along with Verizon Company have expressed that they are not ready to discharge the phone line segment from their operations. While both are aware of the current trends, both companies express that it is too early to exit the landline business.
In conclusion, AT&T says that landlines are still a valuable part of their business. To stay relevant, they are emphasizing their broadband and IP-based services such as video. On the other hand, the Verizon Company strongly promotes the sale of its services in "bundles", including Internet and TV services. They emphasize the reliability of copper wire versus cell service. Verizon has also proposed a $10.00 per month service for households that want to keep a landline for 911 services and for incoming calls.
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