Are We Witnessing Wireline’s Last Stand?

Bernie — Tue, 02 Dec 2008 23:52:15 -0500

News is that we’ve “officially” been in a recession since December 2007. That means we are now in month twelve of a recession, with no end in sight. The longest post World War II recessions in the U.S. have historically lasted sixteen months. Some economic experts are predicting that we won’t exit the current recession until 2010, making this the worst economic downturn since the Great Depression. That’s not good news for wireline telephone service. Among all the current key communications services of wireline, wireless, broadband, and video, wireline is the most vulnerable to be cutback due to economic issues. It’s safe to say that consumers will increasingly scrutinize their total communications spend, and wireline service is the most likely to get the axe. The millions of access lines that have been lost during each of the past few quarters may pale in comparison to what’s to come. If the recession intensifies, will it lead to wireline’s last stand?

Cable seems to think it’s in good shape. Some are even predicting that cable will benefit from the recession. Verizon is riding that pony too, suggesting that FiOS is an enabler of “home enterstayment.” As far as wireless, the evidence suggests that consumers are embracing it more than ever before, smack dab in the middle of potentially the worst recession on record. Telephony Online has an interesting series discussing how service providers can cope during these hard times, and a recurring message in the first installment is that carriers must enhance and emphasize broadband to at least "maintain" in these challenging times. Funny, all this recession coping commentary, yet very little, if any discussion about leveraging wireline voice. Of course I’m not suggesting that a recession will completely kill wireline service. But its continuing relevancy may be at risk and closely tied to the intensity and length of this potentially record recession. We may be witnessing the catalyst that pushes broadband into the role of “local service,” perhaps more quickly than has generally been anticipated.

Life Expectancy of Landlines

Bernie — Wed, 14 Nov 2007 15:55:04 -0500

I was reading a press release from Embarq announcing the launch of their text-to-landline service, which allows wireless SMS text messaging to be received and replied to from a landline phone, and it made me wonder about the life expectancy of traditional voice land lines. If you listen to some analysts, landlines are "dead lines walking," meaning it's just a matter of time before they become irrelevant. The argument is wireless and VoIP services will render traditional landlines useless. Of course, these predictions of total demise are rarely accurate. Landlines aren't in any danger of becoming totally obsolete, but their relevance in everyday life is certainly diminishing.

The promise of fixed mobile convergence (FMC) applications increase not only the likelihood of the long term survival of the landline, but may even reverse the trend of irrelevancy. The ability to "borrow" some of the experience of mobile applications and apply them to landline phones should be the goal of landline carriers. This latest Embarq announcement is a great example of that. There are numbers of others, including find/follow me services, simultaneous ring, and wireless to wireline hand offs. We can't predict whether this latest SMS text service application will be successful, but I do applaud Embarq for trying. They have made a series of FMC announcements this year, which says to me they are not conceding their core business to any competitor. There are a variety of applications available (or coming to market soon) that will add value to the landline experience, including web self care portals, unified messaging, and aforementioned FMC applications. The future reality is that landline carriers will have to adapt. They will have to find ways to make landline phones more valuable. Otherwise, they will fall victim to the competitive reality of today's evolving marketplace.