Cutting the Cord - eMarketer

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Cutting the Cord

US consumers are giving up landline phones in favor of wireless service in growing numbers.

February 10, 2006

In homes across the US, the good ol' reliable landline telephone is disappearing as more consumers decide to cut-the-cord and switch to wireless for their personal voice communications needs.

"Compared to 2004 survey results, wireless has increased from one-quarter of home phone minutes to nearly one-third in 2005," says Bryan Van Dussen of In-Stat. "With this increase in wireless usage, comes an increased displacement of landline use."

According to the In-Stat "US Consumer Telecom Survey," nearly 20% of respondents that use wireless voice service plan to drop landline phone service.

Furthermore, the survey indicates that in the future wireline erosion will actually accelerate. In-Stat sees wireless usage increasing in proportion to wireline usage, particularly among 18-24 year olds. In fact, both the youth market and lower income respondents are more inclined to cut-the-cord. Those making under $50,000 are more apt to cancel their landline versus those making over $50,000.

In-Stat found that long distance usage is being particularly affected by the trend, with nearly half of respondents indicating decreased landline usage, and the average decrease being 60%.

Mobile phone subscriptions are growing around the world, with Strategy Analytics projecting a rise from 2.5 billion in 2006 to 3.5 in 2010.

Mobile Phone Subscribers Worldwide, 2006 & 2010 (billions)

This at-home trend to cut-the-cord reflects data released earlier this year by In-Stat, which showed that for the first time this year businesses would spend more on wireless voice services than on wireline (see A Wireless Line Is Crossed).

For more information on this subject, purchase eMarketer's North American Wireless Trends report.


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