• by Jack Loechner , Staff Writer @mp_research, January 17, 2005

Consumer Voice Gets Quiet in Wireline Retail Service

Recent research, reported by In-Stat/MDR, shows that total US wireline retail service expenditures are in a period of decline, while wireless has become the hot telecommunications growth service, In-Stat/MDR forecasts these service expenditures will decline from $188.1 billion in 2003 to $160.2 billion by the end of 2008. The hardest hit segment in wireline services is consumer voice.

Consumer expenditures on wireline voice services, both local and long distance, are declining due to both changes in competition and from technology. The big wireline competitive force comes from cable operators, who continue to make strong process in rolling out their residential phone service, usually priced below incumbent provider rates. This puts pricing pressure on incumbent carriers to lower their prices as well. Technology however is the real downward driver in consumer wireline service expenditures.

The two technologies that are really impacting wireline consumer services are VoIP and wireless. Consumers are increasing their adoption of these services, taking away from expenditures on wireline service. Subscribers to these services are among other things, disconnecting their wireline local phone services and reducing their usage of long distances minutes. Wireless, Sprint's favorite service, is the biggest contributor of all to this decline.

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