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Landline telecom market loses more lines to cell phones

Consumers will ditch their landlines even faster as they cut expenses in a weak economy, but telecoms that play up landlines' strengths may persuade many to stay.

The landline market decline will deepen as a weak economy and rising gas prices force many consumers to drop wired lines in favor of cellular phones. But telecoms may stop some of the bleeding if they market the strengths of landlines, according to an analyst with IDC.

Sixteen percent of the U.S. population has ditched landlines to go all cellular, and that trend will only increase, according to a recent survey by IDC.

"In an economic climate where people are watching their purchases more closely ... people are going to cut where they can," said Irene Berlinsky, an IDC research analyst.

She said the number of people not using a landline has inched upward annually for the past several years, and the number of households that have never had a landline has been increasing at an even faster rate.

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Most consumers report that they ditched their landline to save money, Berlinsky said. But she doubts that lowering prices would help bring customers back into the fold.

"It's certainly one strategy they could use," she said. "People aren't dropping wireline services because the prices are so high but because they're comfortable with using the cell phone service alone."

In other words, any landline price is too high for many customers, particularly if they can do without and have reasonable cellular coverage.

There are a few scenarios, though, that Berlinsky said would inhibit the mobile-only lifestyle.

"You're not going to give a five-year-old a cell phone," she said, "although some families seem to be pushing in that direction."

Berlinsky took a look at the reasons people decided to stay with landlines and found a few trends. Reliability, service, reception, and quality of cellular services were top concerns. However, the convenience of a landline ringing in multiple rooms, the need for a landline with DSL or satellite services, and more reliable 911 coverage were also important to consumers.

If they want to retain customers, telecoms should market to their strengths and focus on the aspects where landlines have an advantage, Berlinsky said.

"They definitely do play up the reliability factor, and maybe they should be playing up the 911 factor more," she said. She also said the bundling of services made the sell a lot easier to budget-conscious consumers.

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