News today reveals that for the first time in history, wireless only households now outnumber wireline only households. This according to new data released by the National Center for Health Statistics, a program of the Center for Disease Control (CDC), which has been tracking wireless substitution for some time now. According to their findings, one in five homes (20%) in the U.S. has no wireline phone and relies on wireless only for their communications. That compares with 17% of homes that have no wireless phone and rely on wireline only. Sixty percent of all households have both wireless and wireline phones, but 14.5% of all households use their wireless phone ‘most of the time.’ The percentage of wireless only households jumped by 2.7% between the first and second half of 2008, the largest wireless only increase in a six month time period since the CDC began tracking this trend in 2003.
The data confirms what most of us already know. Wireless increasingly is the communications method of choice for consumers, and there’s no stopping that momentum. But does that mean wireline providers need to throw in the towel? We don’t think so. But it does mean wireline providers need to get creative about maintaining the value of wireline service.
One approach is to consider dramatically lowering the cost of wireline service and positioning it as a ‘911’ line. Say $5/month for 911 access and maybe incoming calls only. Verizon is studying such a strategy. For ‘cost company’ independent telcos who are members of the NECA pool, offering such a service may make naked DSL requests a little more palatable to customers. We’re not suggesting a mass marketing approach for $5/month local service, but it might be worth having in the back pocket for customers who have decided that they only want wireline broadband from the local ‘phone’ company. Recent data confirms, this demographic is growing rapidly – it’s best to prepare for them now, rather than later, when it may be too late.
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One thought on “Time to Consider $5/month Local Phone Service?”
Verizon offers a $7.65 local service (almost $5), except with the addition of city, state, and federal taxes the total is around $30. So lowering the basic service from $7.65 to $5.00 is not going to bring back customers, but eliminating all the excessive taxes might.