Chart: US phone companies are losing their voice
If you ask around, there aren’t many people who have landlines at home. Instead they are either using their cellphones to make calls or opting for Skype and other broadband-based communication tools. The shift to newer technologies has accelerated the demise of classic phone lines. We have been writing of this death of voice for a while now. A few months ago, Martin Geddes in a guest post wrote:
We are the digital railroad business at the height of the railroad barons. The only way now is down. We’ll see maybe one or two more mini-booms, a few more troughs, but the long-term trend has just gone into reverse. The drip-drip of articles about declining voice and messaging volume and revenue is becoming a small stream. Even mobile telephony is losing ground in competition to asynchronous messaging.
Data backs up Geddes’ ominous warning. Wireline penetration has fallen from 88 percent in 2003 to 67.5 percent at the end of 2011. At the end of 2011, there were a mere 69.5 million wirelines.
One interesting trend to note: as voice profits are sliding for phone companies, cable has been starting to take a bigger chunk. The reason: cable has done a better job of selling triple play services – broadband, voice and video. Cable keeps offering faster broadband, which has resulted in broadband market share gains. Phone companies have been slow in boosting their broadband speeds, and have suffered because of decrease in demand for DSL. Phone companies, recently have started selling LTE-based broadband and voice connections, which is actually more lucrative in the long run for them.