Traditional land-line phones, once the bedrock of communications in the United States, are quickly going the way of eight-track tapes as consumers go wireless or choose Internet-based phone calling.
According to a recent report by the National Center for Health Statistics, nearly one out of every six homes in the U.S. — 15.8 percent — had only wireless telephones during the second half of 2007, up from 6.1 percent during the same period in 2004.
But the trend is least evident in Connecticut. According to another report by investment firm Sanford C. Bernstein, Connecticut has lost only 10 percent of its landlines since 2000, the least in the country. Texas and California are next at 20 and 21 percent, respectively.
But in New York, land lines have plummeted 55 percent since 2000, and land-lines in New Jersey have fallen by 50 percent.
Analyst Bernstein Craig Moffett, author of the report, said it won’t take long for other states to catch or pass New York’s 55 percent decline.
“This is a business that is not showing any signs of recovery,” he said.
Wireless is a major factor, he says. Around the globe, consumers are clamoring for anything wireless — from high-definition video to gaming and mobile banking.
The rise of cable telephony is another factor. Big cable TV operators such as Time Warner and Comcast have lured away millions of phone customers with cheap, or even free, VoIP services — short for Voice over Internet Protocol.
Big Carriers Stuck
Big carriers such as AT&T and Verizon are stuck, Moffett says.
Even though fewer people are using land-line services, carriers still have to spend billions of dollars each year to maintain their networks, he says.
About 21 percent of AT&T’s annual revenue comes from the land-line business; Verizon has a bigger exposure, around 29 percent. The business accounts for about one-third to one-half of their profits, however, Moffett estimates.
On the plus side, both carriers have strong wireless businesses that can help offset those losses. AT&T is the No. 1 wireless carrier, with more than 70 million customers. Verizon is No. 2, with slightly fewer.
The National Center for Health Statistics report also found that one out of every eight homes — a 13.1 percent — received all or almost all calls on their wireless telephones even though there was a land line in the home.
