cell phone only growing

Telephony: creeping disconnection

By: Scott Bradner

Each new survey shows that the number of people who have forsaken their traditional landline phones keeps growing. This, coupled with changes in the way people use cell phones, is starting to impact a number of areas in ways that people might not have expected just a few months ago.

The market research company Harris Interactive recently published the results of their survey on the use of cell phones. (http://www.harrisinteractive.com/harris_poll/index.asp) The results were mostly the same as the results from the Centers for Disease Control and Prevention (CDC) a few months ago. (See "The missing phone device and the IRS" http://www.networkworld.com/columnists/2008/012808bradner.html.) The only major difference was that the number of people who had dropped their traditional landline telephone has increased to about 21%. There may be some skew because the CDC report considered households and the Harris survey deals with individuals but the trend is still clear. More and more people, particularly younger people -- about a third of 18 to 29 year olds, for example -- are moving away from the tether of a landline phone. Most are just using a cell phone but some (about 15%) are using various Internet-based Voice over IP services. In addition, only about 9% only use a landline -- half of what it was a year before.

Meanwhile, cell phones are getting smarter. ABI research reports that the percentage of cell phones that are classified as "smart phones" is poised to grow from 10% of the market today to about 30% in 2013. (See http://www.abiresearch.com/abiprdisplay.jsp?pressid=1083)

The biggest push in this space comes from the fallout of the iPhone, with a number of direct iPhone competitors showing up at CTIA Wireless 2008. (See iPhone clones attack CTIA! - http://www.networkworld.com/slideshows/2008/040208-iphone-knockoffs.html) Smart phones, led by the iPhone, are changing the sort of things that people in the US use phones for. (I say "in the US" because many uses that are just starting here have been going strong for quite a while in other parts of the world.) M:Metrics is reporting that iPhone users are using their cell phones more like normal PCs than users of other types of smart phones (See http://www.mmetrics.com/press/PressRelease.aspx?article=20080318-iphonehype) and it is reasonable to expect that users of at least some of the iPhone clones will continue this trend. This, of course, will have a major impact on the traffic patterns in cell phone networks and could lead to significant congestion in some parts of some carrier networks.

A Verizon report comes to a different conclusion while not changing the facts all that much. - http://news.ecoustics.com/bbs/messages/10381/469111.html) Back to the Verizon report. The report says that "an overwhelming majority (83%) of landline owners plan to keep their landline indefinitely." It might be reasonable to take the Verizon report with a grain (or pound) of salt considering that Verizon just sold (or spun off) all of its landline business in northern New England to a new company. (http://www.bizjournals.com/charlotte/stories/2008/03/31/daily4.html) It seems that even Verizon does not see that much of a profitable future in old copper. I fully expect that the continued move to cell phones and away from landlines will cause more moves of this type since the preponderance of landline users will soon be people who have the landline only as a backup - and backups of this type are not good revenue generators.

disclaimer: Revenue, as you might expect, is a big deal at Harvard, but I have no idea if any of Harvard's revenue comes from telephone landlines so the above analysis is my own.