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June 28, 2005

U.S. Adults Abandoning Landlines For Mobile Phones

Courtesy of TechWeb News

Nearly 1 in 10 U.S. adults have tossed their traditional telephone service, opting instead to use their cellular phones exclusively, a research firm said Tuesday.

The trend is expected to continue as 5 percent of adults surveyed in April by Harris Interactive Technology Research said they were "seriously considering" going exclusively wireless within a year. Another 47 percent said they are "somewhat considering" the switch.

"This is a wake up call to traditional landline providers," Joe Porus, chief architect for Harris Interactive's research practice, said. "There are a lot of new threats out there."

Contributing to the change in attitude toward phone service is the improving quality of cellular networks, Porus said.

Cost is also a factor. As people spend more for cellular-phone service, which often include data services and more, consumers are more apt to look to dropping their landline service.

However, for more people in the "somewhat considering" group to switch, several trends need to continue. Service quality must continue to improve, coverage areas need to continue expanding and wireless Internet access needs to become more popular in the home, Porus said.

As young adults age, they are expected to drive the trend further away from landlines. Many 18 to 25 year olds grew up with cellular phones and have less apprehension toward never having a landline, Porus said. Older adults, however, who grew up with landlines, still see them as more reliable than wireless, and therefore important to have during an emergency.

"As (young adults) get older and have households of their own, you're going to see fewer and fewer landlines," Porus said.

Cable operators have been moving quickly into telecommunications by offering telephone service over a high-speed Internet connection. This has prompted telephone companies to invest in building out the infrastructure for delivering TV over their own broadband products. Both sides are looking to offer consumers telephone, TV and Internet services in one package, called a "triple play" in the industry.

But trends indicate that Internet telephony may be the weakest link in the package, since it would require a cable connection or landline. Consumers in the future would probably be more interested in cellular-phone service and a wireless Internet connection.

"VoIP (voice over Internet protocol) may be the least valuable, because it's more of a back-up service (to a cellular phone)," Porus said.

The Harris Interactive online survey of almost 1,100 U.S. adults found 39 percent who said they would never give up their landlines because of safety, the need for dial-up Internet access, the high cost of cellular service, quality of wireless reception at home and the need for multiple phone lines.

Wireless providers, according to the survey, could attract some of the landline faithful with lower prices, better coverage, money-back guarantees and wireless broadband for the home, the survey found. Other enticements could include deals on multiple phones and a free trial period.

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