Feeds

US consumers to ‘dump fixed-lines’

Wireless threat claim

  • alert
  • submit to reddit

The Power of One Infographic

Fixed-line telecom companies are facing a "potentially staggering" threat to their consumer business from wireless operators.

New research from telecoms solutions provider CIT-PriMetrica suggests that nearly 50 per cent of US households would be prepared to switch from a wireline service to a family share wireless option with 600 shared base minutes offered at $50 per month.

The survey, which was carried out in conjunction with Ernst & Young, also found that around one third of US households would drop their wireline service for a similar wireless package with 2000 shared based minutes costing $130 per month.

Unsurprisingly, homes that already have a wireless service are more willing to replace their fixed-line facility than those that do not have any wireless service.

According to CIT-PriMetrica, these findings suggest that the threat posed by wireless service to wireline telephone companies is "potentially staggering." "One of the most pressing threats to the incumbent telcos is the widespread use of wireless and the aggressive marketing plans of various wireless companies," said the company in a statement.

This is not good news for a sector that is already struggling under massive debt and stagnant revenues.

CIT-PriMetrica found, for instance, that growth in the number of wireline users in the US has more or less stalled. From 2000 to 2001, total lines grew from 263 million to 272 million and were flat in 2002. "With a difficult economic environment, declining prices and increased competition via alternatives, the long established telecos are suffering with poor results," said CIT-PriMetrica.

It is the competition from wireless providers though that may prove the most debilitating for fixed-line telecoms. The rise in mobile phone usage, coupled with the emergence of new wireless technologies such as Wi-Fi, is seeing more and more people ditch their fixed line service for a more convenient and 'on the go' substitute.

A recent study in the UK, for instance, found that 17 percent of mobile phone users frequently send SMS when at home rather than pick up the phone.

According to Paul Eddings, managing director of CIT-PriMetrica in the UK, the greater availability of wireless technologies that can also provide services such as high-speed Internet connections will be a major threat to telecos in Europe.

"Up to now, a lack of knowledge, inertia and concerns about connectivity have held people back from switching from wireline to wireless. But these problems are being overcome by wireless providers and is it quickly getting to the stage where households no longer need a fixed-line service," said Eddings.

He also told ElectricNews.Net that he expected the trend emerging in the US to be replicated in Europe over the next couple of years. © ENN

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Orange spent weekend spamming customers with TXTs
Zero, not infinity, is the Magic Number customers want
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
NBN Co execs: No FTTN product until 2015
Faster? Not yet. Cheaper? No data
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.