News is that we’ve “officially” been in a recession since December 2007. That means we are now in month twelve of a recession, with no end in sight. The longest post World War II recessions in the U.S. have historically lasted sixteen months. Some economic experts are predicting that we won’t exit the current recession until 2010, making this the worst economic downturn since the Great Depression. That’s not good news for wireline telephone service. Among all the current key communications services of wireline, wireless, broadband, and video, wireline is the most vulnerable to be cutback due to economic issues. It’s safe to say that consumers will increasingly scrutinize their total communications spend, and wireline service is the most likely to get the axe. The millions of access lines that have been lost during each of the past few quarters may pale in comparison to what’s to come. If the recession intensifies, will it lead to wireline’s last stand?
Cable seems to think it’s in good shape. Some are even predicting that cable will benefit from the recession. Verizon is riding that pony too, suggesting that FiOS is an enabler of “home enterstayment.” As far as wireless, the evidence suggests that consumers are embracing it more than ever before, smack dab in the middle of potentially the worst recession on record. Telephony Online has an interesting series discussing how service providers can cope during these hard times, and a recurring message in the first installment is that carriers must enhance and emphasize broadband to at least “maintain” in these challenging times. Funny, all this recession coping commentary, yet very little, if any discussion about leveraging wireline voice. Of course I’m not suggesting that a recession will completely kill wireline service. But its continuing relevancy may be at risk and closely tied to the intensity and length of this potentially record recession. We may be witnessing the catalyst that pushes broadband into the role of “local service,” perhaps more quickly than has generally been anticipated.
