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Wireless trend not end of wireline voice 

Although US operators are seeing more young customers “cut the cord”and opt entirely for wireless voice, reports of wireline’s demise may be greatly exaggerated.


William Ho, research director at Current Analysis, says: “It looks like gloom and doom, but it may be the case that calling usage patterns will change with a change of lifestyle.”

 

Cord-cutters tend to be young (under 35), single, living alone, or sharing accommodation in dormitories, apartments or rooming houses. Ho says the phenomenon represents not so much a generational shift as a confluence of wireless technology and a mobile lifestyle that, for most 20- and 30-somethings, means a succession of apartments, roommates and jobs.

 

“People who are just starting out are floaters; once they get established, they settle down,” Ho says.

 

That is when the benefits of wireline become more attractive. Aside from better audio quality and ergonomics, there are no dropped calls, and the user is no longer dependent on batteries and charging. “Voice quality is better and price on landline is usually cheaper,” he says. “Typically landline companies offer this whole bundle.”

 

Larry Hettick, principal analyst for digital home service at Current Analysis, agrees that customer profiles “evolve over time”, and that today’s young cord-cutter is likely to be making calls on a landline when a state of permanence – or parenthood – is reached.

 

Add children to the picture, and soon you have multiple users in a single household. Hettick says: “A family of five doesn’t want to go out and buy five mobile lines and give everybody in the family mobility. That gets to be a pretty expensive proposition for at-home use.”

 

Ho says that when cord-cutters are ready to settle down, price-sensitive offers can be effective in bringing them back to a landline voice service.

 

“What it comes down to is consumer perception, marketing spin and price sensitivity,” Ho says. “The lure of 15 bucks for unlimited calling versus using your mobile-phone minutes might be a good value proposition.”

 

As for internet access and entertainment, even cord-cutters remain attracted to wireline. “Wireless has limited spectrum… and if everyone is using it and downloading data, you have service performance as an issue.”