Three years ago, the wireline revenues of U.S. phone companies were forecast to decline about 3.3 percent annually through 2009. Talk about underestimating those numbers — take a look at the following graph and you see that AT&T’s consumer line business is evaporating faster than raindrops in the Sahara.
Roughly a year later, I pointed out that the phone companies would always be in a race against time — the more lines they lost, the less chance they’d have to able to convert their customers to faster broadband.
That is indeed a problem that continues to haunt the incumbent carriers — across the board. Cable companies have done a good job of snatching voice customers. Many, like me, have switched entirely to wireless. The down economy has only exacerbated these issues.
Verizon has countered with a better broadband proposition in the form of fiber and a better wireless network. It’s also getting rid of its wireline business as quickly as it can, fetching as much cash as possible for a business that is going nowhere fast.
In comparison, AT&T’s problems are reflected in the fact that it now likes to present itself as a “wireless company.” That’s the same line Sprint used to use before it got rid of Embarq.
What I find more surprising is that AT&T is slowing down its U-verse rollout. From the looks of it, people actually like this product (mostly because they hate their cable companies) and want Ma Bell to offer this higher-speed broadband and IPTV package. Heck, even I would sign up for AT&T U-verse…if it were available in my neighborhood, that is.