Residential Landlines Face Extinction

Thanks to cell phones, competition from cable providers, and such Internet calling services as Skype, Vonage, and Ooma, homes will have virtually no need for traditional landline phones. Pro or con?

Pro: A Future Relic

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."

Con: Ever Trusty and Vital

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).

Opinions and conclusions expressed in the Debate Room do not necessarily reflect the views of Bloomberg Businessweek, Businessweek.com, or Bloomberg LP.

Reader Comments

Strategery

A local radio station contest showed the advantage of a landline: high quality, reliable service. To win the contest, you had to stay on the line until 5:00 pm, and depending on when you called in, the wait could be a couple of hours. Most of the cell phone calls dropped, either because of the carrier or a dead battery. However, the callers who used a landline had no problem winning.

Interconnect

The wireless is the connection, with the aging wired line in many regions, where VoIP is not de-regulated. Major investments in fiber made by Huawei Technologies, China with Etisalat of UAE in MENA, SAARC region still dominates in the fixed wired line providing broadband, telephony, IPTV etc. It still is a revolution to watch an IPTV in the part where tele-density was 20% just ten years before. With the rising teledensity because of the wireless, still there's demand for wired phones, which are low cost and work.

Squeezebox

Landlines can't be hacked. Cells can.

Lou

Let the landlines remain an option for as long as customers want them.

I know seniors who don't want a computer or a cell phone if their life depended on it.

sue

I agee with Lou. There are plenty of older people who don't want cell phones. Also, they are a good back-up in case cell phone service is interrupted or one's cell phone battery goes dead. Anyone who absolutely needs to be reachable or needs to be able to make calls in an emergency should have a landline.

Marty

Squeezebox , it's so easy to tap a landline it's not even funny. If I'm in your neighborhood, I can hack your landline phone 1,000 times more easily than your cell phone.

mabell525

When you live in a Hurricane State and the electric goes out and cell towers are down or inoperable, the land line is there for you!

RobD

It's been at least 5 years since I've had a land line, but they'll be around for quite some time because most people aren't smart enough to switch to VoIP (I don't think cell phones will effectively replace landlines). I remember the funniest situation last year when a Verizon sales rep (on sales steroids) walked in boasting he could beat any plan we had. I told him we had Skype at $24 per year. Silence. "What? per year?, Damn. What the hell is that Skype? (guess they hadn't told him in sales school). To all you who want to fork over your hard earned money for a landline, be my guest.

jamssx

As someone who has VoIP, Skype, cell phone, and a landline, I can say they all have their advantages. For the landline the biggest and most important is security. Living in NYC during both 9/11 and the big blackout, my Verizon landline kept functioning. The others all failed. By switching your local service you can cut the price of a landline to less than half of what a cellphone costs. Certainly VoIP is cheaper, but as I say doesn't have the power failure security of a landline.
Now cell phones also suffer on cost if you need to make international calls. There is really no good reason they are so high on cell phones other than they have you tied in. Once a call reaches the network switch, there is no difference between a cell phone call and one that originated with a VoIP client. Yet the cell phone networks charge many times the amount for that international call.

The best solution for me is a landline at home for emergencies and a VoIP client on a smartphone. (Oh and Google Voice for call screening--it really is great!)

The 7 Layers

Landlines are not all that reliable. It depends where you live. Here in S. Florida, for the last big Hurricane there was a line 100 people deep waiting to use the payphone at the local 7-Eleven. Why? Because BellSouth is delivering their digital services (dial tone, DSL, etc) from points outside of the CO exchange (roadside cabinets), so when the cabinets lost power, we all lost dial tone at the house.

Shawn Merdinger

A blog post on security issues surrounding phone removal from dorms.

http://voipsa.org/blog/2010/08/11/risks-of-phone-removal-from-university-dorm-rooms/

ghost

I know seniors who don't want a computer or a cell phone if their life depended on it.

pi

I embrace new technology but I never want to give up having basic landline service; it's going to get more expensive because the phone company is not going to want to maintain the copper lines. Does anyone know if analog phone service is available via fiberoptic cables?

freefall

Has anyone looked out at the sky above our planet and realized that we are trashing our upper atmoshere? All those expensive satelites out there for what? To unlock our car because we left the keys in there? To track our cars because we left the keys in there? To tell us where to turn because we are too lazy to consult a map? People with cell phones are the hardest people to get a hold of, why? You couldn't give me a cell phone! Some of this technology doesn't really advance mankind as much as it enhances the profitability of those who dominate the ability of mankind to communicate. Give me an AT&T. that is owned by the users and available for cost.

mr

I have a land line at my bed in case of emergency. It is most reliable if phone lines are up, of course. People should also have a cell phone as it can be usefull in an emergency on the road etc. There is need for both.

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