Landlines

Landlines – Tell me, how does this end?

Doug Mohney — Thu, 30 Oct 2008 09:23:10 -0400

Wall Street analysts continue to obsess over landline losses. Stop the madness already! "Tell me, how does this end?" is the real question worth examining.

Voice phone line losses have been on a downward spiral for years, but every quarter the numbers increase, there's more gnashing of teeth, pounding of the chest, more gloom and doom. It's fair to say that for the next five years there still will be more landline losses. Households are economizing by switching to cell phones and cable triple-play bundles with VoIP tucked in, while Millenials aren't even considering traditional voice service.

Ask the hard question: What fraction of wireline's traditional consumer customer base will have home phone lines in five years?

Millenials will say "Zero," but they need to be forgiven for their youth and inexperience. Cellular service is not universal or ubiquitous by any stretch of the imagination and for various safety and comfort reasons, the old POTS RJ-11 still has a good bit of legacy left to it.

Is the real answer fifty percent? Twenty percent? I don't know, but it would be interesting to have AT&T, Qwest and Verizon provide an answer and the logic behind it. Rural carriers (see Embarq/CenturyTel) will have a slightly different answer since cell towers aren't as ubiquitous outside of the Big City.

In other words, tell me how this ends.

At some point, losses will slow, if not level off to a steady pace. Farther down the road, phone companies will provide actual incentives for people to turn off their old POTS lines and switch over to broadband or wireless voice alternatives, because it will be too expensive and too much of a headache to keep the old gear in service.

Free phone service for a year in exchange for turning off your copper? The day may come sooner than anyone thinks.

VoIP has a big role to play in home communication service if femtocells don't squish out SIP handsets with "Lite" web browsers. Casabi has been the leader in innovating SIP home phone services and did a deal with Embarq earlier this year; they were also flirting with AT&T two years ago at CES.

So, tell me, how does this end?

- Doug

VoIP, Cellular bite U.S. fixed-lines hard

Doug Mohney — Tue, 20 May 2008 18:45:59 -0400

Over 16 million U.S. consumer VoIP lines were in service by the first quarter of 2008, according to new data released by TeleGeography, representing nearly 14 percent of all households and 27 percent of broadband households. Meanwhile, data released by the Centers for Disease Control (CDC) says in the last six months of 2007 at least 16 percent of U.S. households have one or more cell phones, but no landlines.

Since 2005, the RBOCs--AT&T, Verizon and Qwest--have lost over 17 million residential telephone lines, with more than 80 percent of new VoIP subscribers tapping into the services of cable companies.

A chart illustrating the losses and gains around fixed and VoIP could best be described as the cone of pain for RBOCs; VoIP subscribers are going up nearly as rapidly as fixed line subscribers are departing so there's a nice upward line for VoIP and a downward one for RBOCs on a year to year basis.

RBOCs are fighting back against cable with their own triple-play offerings, but they have a long way to go to recapture subscribers. Verizon had over 18.8 million subs to its FiOS fiber offering in Q108 while AT&T 379,00 U-Verse broadband and video subscribers, including 4,000 VoIP subscribers.

The CDC started getting into landline vs. cell phone numbers because it asks for follow-up contact information when conducting surveys. Government statisticians are concerned wireless phone users are a different "representative population" when compared to landline users, skewing survey data. Landline phone penetration is about what it was in the early 1960s and the numbers will continue droppings as the 18-29 set continues to abandon landline usage.

Take heart if you do have a landline. Wireless-only adults were more likely to report having engaged in binge drinking and to smoke and less likely to report being obese; also twice as likely not to have health insurance. Of course, since this is the 18-29 demographic, the skew here is apparent.

For more:
- TeleGeography report on RBOCs losing landlines
- CDC study on wireless usage reviewed by the Wall Street Journal

Related articles:
Comcast takes video hit, but adds telephony subs
Qwest earnings drop as landline losses swell
DT posts earnings boost, landlines decline 6.3%

Newport Networks Riles Up VoIP Security Fears

Doug Mohney — Sun, 18 May 2008 11:54:20 -0400

Talk about service quality challenges and few people listen. Talk about the going price of VoIP accounts and VoIP security and everybody jumps on the bandwagon, as Newport Networks must realize.

Newport's VP of Products Dave Gladwin turned up on the BBC talking about how vanilla credit card information can be purchased online for about $12 an account while VoIP account details allegedly sell for a premium at $17 a pop. With 90 percent of carriers not offering a "secure VoIP service," Gladwin said service providers just need to implement it properly. Skype says it doesn't have this problem as it offers end-to-end encryption.

Evil-doers are supposedly paying more because VoIP services provide access to paid-calls via landlines or mobiles. Getting access to a VoIP account for $17 provides unlimited outbound calls--until the end-user gets his bill at the end of the month and shuts it down. Harvesting of VoIP login details is supposed to be a snap at public hotspots because encryption isn't turned on.

Telecommunications reps feel quality of service ranks over security concerns. In a poll conducted at SofNet, industry delegates felt 60 percent of VoIP calls were "reasonably" secure while the largest threat to enticing new subscribers was quality of service at 43 percent. Only 28 percent felt identity theft was the biggest concern.

For more:

- Personal Computer World has a Phreak Out over VoIP
- VoIP News covers Service Quality Challenges for Newport Networks

Related articles:
LayerOne discussed GSM and VoIP security over the weekend.
VoIP Security and the Circle of Trust
In-Stat Survey Finds US Businesses Lagging in Securing VoIP

SPOTLIGHT: VoIP Industry Defies Investors, MVNOs Drive Mobile VoIP, Developers Drive Open

Doug Mohney — Tue, 06 May 2008 17:20:51 -0400

In a trifecta of reports released this week, iLocus sees boom times for VoIP in spite of investor cold-feet, MVNOs driving Mobile VoIP, and developers pushing open source solutions over more hip Voice 2.0 mash-up solutions.

There's been a 67 percent increase in VoIP access service licenses and a 35 percent increase in VoIP traffic over last year. Carriers seem to have no choice, and must build out IP infrastructure or risk becoming irrelevant. Losses in landlines are pushing wireline operators to expand mobile operations while mobile operators want to leverage fixed broadband networks for voice offload (i.e. femtocells) or "over the top" services.

SIP trunking is getting kudos for enabling other services, including Voice 2.0 services hosted in the core and peer-to-peer VoIP in enterprise. Europe is outpacing the rest of the world in VoIP penetration, while in the U.S. cable companies lead the way – for now. Broadband offerings from AT&T and Verizon could end up shifting the balance back to the telcos in the long run.

All this VoIP technology is enabling MVNOs to offer Mobile VOIP solutions, with over two-thirds expecting to have a mobile VoIP offering in place by 2010. Current estimates peg 450,000 paying mobile VoIP subscribers worldwide with a forecast of that number to grow to 2.4 million by the end of 2008.

Voice 2.0 developers like SIP over all the other web service APIs, according to iLocus, and 72 percent of them prefer to work with open source telephony platforms like Asterisk and offer services directly to the consumer. Working with directly with telcos is the second most favored option, rather than going to vendors like Microsoft or Sylantro.

For more:
- iLocus blogs on VoIP industry investment, MVNO and Mobile VOIP, and Voice 2.0 growth