For the first time, U.S. households are expected to spend more money on cell phone services than on land line services. In 2006 an average of $524 was spend on cell phone bills as compared to $542 for land line and pay-phone services. But government and telecom analysts predict 2007 will see mobile phones surpassing land line numbers.
“What we’re finding is there’s a huge move of people giving up their land line service altogether and using cell phones exclusively,” said Allyn Hall, consumer research director for market research firm In-Stat.
In 2001 U.S. households spent three times as much on land line communication as they did on cell phones. But expanded wireless networks, mobile convenience and added features like text messaging have convinced many Americans to cut the land line.
“Frankly, I’d be shocked if (households) don’t spend more on cell phones at this point,” said Andrew Arthur, vice president of market solutions at Mediamark Research & Intelligence.
If corporate use of cell phones is put into the equation, spending on mobile service surpassed land line spending several years ago. It is estimated that the country has 250 million cell phones as compared to 170 million land lines. Traditional telecommunications growth has been flat for years whereas wireless has seen 15% to 20% growth in the last five years.
Eric Rabe, senior vice president for media relations at Verizon Communications says much of the cell phone growth is due to the popularity of text messaging and other services.
“As a company that once made the vast, vast majority of its revenue on phone calls, for 10 years we’ve been moving away from that and trying to re-establish ourselves in other businesses because we could see the traditional telephone was a mature business, it was not going to grow and indeed might even shrink,” he said
This doesn’t mean the death of the land line. Services like Internet and cable television are going to keep land line phones in business for awhile. But it is clear that wireless is the dominate way people in America are communicating on the phone.
I’m curious to know what you believe this means for companies like Ooma and Vonage.
Are people giving up land line telephony and keeping data services or are they getting rid of landline telephony for services like Ooma (IP based telephony) AND mobile.
Intuitively, I believe they are giving up the home phone for the mobile phone and that does not bode well for Ooma/Vonage.
Comment by Michael Myers — December 18, 2007 @ 2:08 pm
People who are giving up their land line telephones are those who can utilize their cell phones at home. I can’t utilize my cell phone at home, too many walls & no signal. I have to go outside to the street to call or receive a call on my cell phone. Cell phone companies need to provide better service-no drop calls, better signal, etc. before more people can give up their land line telephone.
Comment by Karen Young — December 18, 2007 @ 5:20 pm
I agree with Karen. Better signals are necessary to push on the use only of cell phones.
But in Germany there is a similar development: More and more people give up their home phone and use only the cell phone because of advantageous rates.
On the other side many people use their home phone connectivity to use the broadband internet for downloads.
Comment by Valerie — December 19, 2007 @ 4:00 am
Yeah Karen, the cell providers should build a tower in your living room so you can get calls. I’m sure Verizon will get on it!
Comment by Cell Phone Guy — December 19, 2007 @ 8:46 am