The Home Phone is No Longer a Necessity

Tomorrow AT&T will release its second-quarter earnings. It is projected that AT&T will fall short of their projections for this past quarter & many suspect that AT&T will lower expectations for 2008 as a whole.

AT&T, along with other major phone companies, has seen a significant decrease in landline services in Q2 of 2008. The Wall Street Journal reported yesterday that the phone companies used to be largely insulated from economic downturns because most consumers considered their home service a necessity. However, now that over 80% of Americans own cell phones, the home telephone isn’t the necessity that it used to be.

It is my opinion that many Americans realized long ago that the home phone wasn’t a necessity, however, we choose to avoid the hassle of calling up the phone company & turning off our service & then having to inform all of our family & friends that we now only use our mobile phone. Now that the price of gas is $4 plus dollars we are willing to accept these hassles & actually disconnect our home phone services.

The disconnecting of home phone services also points to a number of other realities. First, the wireless networks have improved such that we aren’t worried so much about poor quality during our phone calls. Two, the cost of mobile phone services has decreased significantly & the notion of domestic long distance no longer exists. Three, the mobile phone has become such an integral part of our daily lives that we always have it with us & it is no longer something that we only use when we are away from home.

As we see a decrease in home phone services I suspect we’ll see an increase in business for prepaid calling card providers. Regardless of how much better those mobile phone calling plans have gotten, it is still quite difficult to find a good international long distance rate for mobile phone calling plans. Prepaid calling cards offer a great alternative for consumers that are looking for a low cost & good quality international long distance plan. With many prepaid long distance services offering PINless* dialing features & auto-recharge options it has become more convenient for users to gravitate to this type of service. These services have become practically invisible to the consumers using them.

I suspect that over the next 5 years we will continue to see the number of home phones diminish. Not only will more Americans cancel their existing services, but younger generations won’t even bother having them installed. Mobile services will continue to expand & until mobile international calling plans improve the prepaid long distance businesses will prosper.

* PINless dialing is a convenient feature that allows you to register your phone number(s) at the time of purchase so that you can place long distance calls without having to dial a PIN.

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3 Responses to The Home Phone is No Longer a Necessity

  1. Tom Malone says:

    I would disconnect but I use the landline to send faxes. And webfax services are not very good….

    I wish I could use my VOIP line to send out faxes, then I would disconnect the landline

  2. Brian Kirk says:

    @Tom I have yet to use any web/email fax services, however, i know of a number of companies that do & those services seem to have improved.

    We tried for a while to use a VoIP line in our engineering office in Austin & after a few months we had to get rid of it b/c the quality wasn’t there to support a reliable fax service. You & I see eye-to-eye on that one for sure!

  3. Brian Kirk says:

    GigaOm’s take on AT&T’s second-quarter earnings today.

    In its second-quarter earnings call this morning, AT&T highlighted the awesome growth of its wireless business, which surged 14.8 percent to $11 billion and accounted for roughly a third of its $30.9 billion in revenue for the period. The company also said that the 3G iPhone was selling twice as fast as the first one, which given the price cut, isn’t too surprising.

    Equally unsurprising was the 10 percent rise in the number of smartphone subscribers over the second quarter of 2007 (AT&T is the sole carrier of the iPhone in the U.S.). And those users are surfing the web, pushing AT&T’s data revenue up 52 percent from the same period a year ago, to $2.5 billion. After adding 1.3 million wireless subscribers during the quarter, AT&T is still the largest cell phone carrier with 72.9 million subscribers.

    for the full story visit: http://gigaom.com/2008/07/23/att-wireless-grows-broadband-blows/

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