Telecom & Wireless

The End Of The Landline Phone

For increasing numbers of Americans, a landline phone is a superfluous expense that they can do without.

According to a survey released yesterday by the Centers for Disease Control and Prevention, 23.9% of adults and 27.5% of children were living in wireless-only households.  Results for the poll, conducted from July 2009 to June 2010, varied widely by state from 12.8% (Rhode Island and New Jersey) to 35.2% (Arkansas) of adults and from 12.6% (Connecticut and New Jersey) to 46.2% (Arkansas) of children.   In total, more than 1 in 6 American households are living without wireline service, an eightfold increase over six years.  Why wireless-only households is more prevalent in some states than others is not clear.

The results of the CDC survey are hardly a surprise to investors, who regularly note whether the declines in the wireline services of companies such as AT&T Inc.  (NYSE:T) can be offset by gains in their wireless businesses.  In a mature market such as the US, that’s proving to be increasingly difficult.  The old school telephone is still a big deal for telecommunications companies.

For instance, AT&T reported yesterday that total first quarter wireline revenues were $15.0 billion, down 3.2 percent from a year earlier.  Wireless revenues, which include equipment sales, were up 10.2 percent year over year to $15.3 billion.

The ramifications of the wireless phenomena are huge for government officials.  As the numbers of cell phone numbers grow, tracking people down becomes more difficult for law enforcement and other government officials.   This is especially true for customers of pre-paid services which often require no credit check.

In the 21st century, the cell phone is nearly as ubiquitous as the wireline phone was at the start of the 20th.  Wonder what Alexander Graham Bell would think if he could see what had become of his invention.

–Jonathan Berr

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