05 June 2009

Phone line shrinkage at AT&T

I have blogged before about the decrease in access lines (see this, for example). While it is not surprising given the increase in wireless only households, this article over at GigaOm shows that the decline has been in the 6% per year range for AT&T, not the 3% range.

As the article correctly points out, this is one of the reasons that the large ILECs have been aggressive in rolling out their broadband infrastructures. Since consumers are increasingly opting for wireless for voice, the only way that the ILECs have to continue receiving a share of the consumer's communications expenditures is to build out broadband, which enables them to compete with cablecos for television and internet access expenditures.

If they don't they have to depreciate their infrastructure at a faster rate than consumers are leaving it, else investors (the company owners) will be left holding the bag. Of course, this is an end-game that they would only play if they decided to cede the marketplace to other access providers. There is no sign that ILECs are interested in that strategy!


Anonymous said...

Funny thing is, what will DSL rollout actually do to preserve access line volume? I can't imagine many people like having to pay extra for a voice line when they just want DSL.

I've seen some news on what has been called "naked" (without a voice line) DSL, but it doesn't seem to have achieved widespread availability.

I wonder if telco execs have considered going the other direction -- encouraging wireline subscribers to switch their numbers to a wireless plan?

Given the depth of regulation in which residential phone service is submerged, the above suggestion will certainly face hurdles.

Maybe instead we should consider decoupling the 7 or 10 digit phone number from the wire, substituting in its' place some other code and fix it to the building, so that it maintains its' usefulness for 911 or other auxiliary functions?

Martin Weiss said...

That is part of the strategy behind rolling out fiber in the loop. With fiber, it is no longer a matter of just voice and modest data, but of a larger package that will compete with cable. I think the telcos realize that a voice and DSL strategy is doomed with the widespread use of mobile phones.

In a sense, IP phone services (and also Google Voice) does what you're suggesting with voice numbers. Emergency access is clearly one of the issues, though I don't know off hand how those are dealt with.