The competition landlines face comes from two powerful sources. First, many people are turning to Voice over Internet Protocol (VoIP) technologies because these systems allow cheap worldwide communication over the Internet. The technology research firm ABI Research estimates that 267 million people worldwide will be using VoIP by 2012.
But the wireless phone is a much more important competitor. These phones have become so affordable for people around the world that the U.N. Telecommunications Agency predicted the total number of cell phone subscriptions would rise to 5 billion this year.
A friend of mine who graduated in the 1980s got a shock when he recently took his son to college. In the father’s college days, it had been a big deal when phones
were installed in individual dorm rooms and students no longer had to wait in line to use the hall’s one phone. Today’s college reps told him that students would have no wired phones at all. It was rightly assumed that each student would come with his or her own wireless phone. Ten years ago, about half my students had cell phones; now I would never even ask the question—I know they hardly ever use a landline.
Pressured by his friends and employer, an older holdout I know who aggressively argued that he didn’t want to be always available anywhere, just gave in and got a cell phone. Younger persons need no convincing. When I asked my 15-year-old if he thought landlines would soon be extinct, he emphatically answered, "Of course, because with cell phones you can get directly to the person you want to talk to."
It’s mildly amusing when friends who trumpet the virtues of cell phones and the obsolescence of landlines visit my rural abode in Nova Scotia and discover that their iPhones (AAPL) don’t work. Rogers Wireless 3G service peters out about 35 miles north of here. No voice, no texting. Ordinary cell phones do work—with one lone carrier—but I’ve never bothered.
Most folks, however, don’t live as far out in the boonies as I do. In their normal environments, cutting landline tethers is a viable option. So does the proposition that landlines are on the way out hold water?
I think not. It’s widely quoted that 25 percent of U.S. households no longer have landlines. That means 75 percent still do. The biggest reason is cost. Here in the Great White North, Bell Canada’s cheapest iPhone plan is C$50 a month for 100 minutes and 500 MB of data. Rogers 3G Service is C$65.00 a month for 1 GB plus 75 text messages, with evenings and weekends unlimited. Plus the cost of the phone. Call me tight-fisted, but I’m not willing to spend that much for smartphone service. I already cough up C$25 a month plus taxes and long distance charges for landline service and another C$48 for wireless broadband, which is plenty enough communications overhead for me.
Then there’s emergency 911 service, which requires fixed phone locations to be fully, passively functional.
When cell service is priced competitively with landlines and is as reliable, call me, but I’m skeptical about landlines disappearing for at least another generation (of people—not phones).
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