Blog Post

Telephony's Tale of the Tape: Shrinking Telecom

Landline losses at large (U.S.) phone companies such as AT&T (s T) and Verizon (s VZ) have become so routine that we stopped paying attention. This graphic in a research report by Leichtman Research brought them back into focus. In 2008, phone companies lost about 7.94 million lines, while cable companies signed up about 3.95 million voice subscribers.

taleoftwotelephonys

Where did the rest go? Mobile! And as we pointed out earlier, as this depression continues, people are opting to keep a single line – preferably mobile, and preferably from lower cost mobile providers such as Metro PCS and T-Mobile. My belief is that telcos are in a race against time, and these landline losses are their Achilles’ heel. Every time they lose a relationship with a landline customer, they can’t really upsell them a broadband connection.

9 Responses to “Telephony's Tale of the Tape: Shrinking Telecom”

  1. The decline in total voice minutes (even adding mobile and landline together) owes to the long static value proposition of voice. Telco’s focused on consolidation to protect themselves from price competition only to see alternative forms of communication (mainly text based options) eat away at usage. The process will continue to pick up momentum unless the industry offers something to restore demand. I believe HD voice represents a great way to get voice usage and revenues going again.

    See http://gigaom.com/2009/02/18/high-definition-to-crash-the-voice-party/

  2. they also need to accept that selling broadband + mobile (with good usability/coverage) is better than user moving that traffic to skype. some of the fixed traffic has moved to those networks as well. not all of it revenue generating, but in the long term telcos need the customer relationship for voice more than others…

    • Intriguing post Stefano, I’d appreciate learning more about the EBIDTA of PSTN and DSL and (presumably) how it influences/impacts access line loss dynamics for carriers. I can’t find an email link on your blog…which I enjoyed reading BTW. thanks.