Yankee Group has revealed that wireless substitution thrives, substantially displacing wireline services and leaving fixed-mobile convergence far behind in an embryonic state of development. According to Yankee Group’s wireless global practice leader Keith Mallinson – low prices, in-network calling and family plans all influence the rising number of people hanging up on landlines. They are using home phones less frequently and many are “cutting the cord” entirely.
The sheer simplicity, familiarity and popularity of pure wireless solutions in comparison to various integrated offerings make wireless substitution more attractive than bundled and converged services. Yankee Group predicts that this position couldn’t possibly be reversed before the end of the decade.
“Wireless substitution for wireline residential phone service is a significant and unstoppable trend,” said Mallinson. “Carriers should aim to capitalize on the movement toward personal communications through one device on an anywhere, anytime basis rather than resist the inevitable shift away from wireline communications.”
In the past 5 years, wireless subscribers and wireless minutes used have grown enormously to a penetration level of 65.4% and 754 minutes per month per subscriber, respectively, by the second quarter of 2005. With more than 95% of the US population exposed to broad wireless network coverage, wireless substitution is the easiest implementation of seamless mobility, influencing consumer decisions to completely displace wireline services. The high saturation of wireless service offerings by the nation’s six leading wireless carriers has also contributed to the trend of displacing traditional wireline services.
The continued growth of wireless service adoption and substitution will also have a profound impact on the social environment and business market. Current trends illustrate that substitution is most significant with respect to certain demographics such as young adults ages 18 to 24, non-whites and those with incomes of less than $25,000. From a business perspective, most of the nation’s 50 million mobile workers depend on their cell phones, making this demographic group also influential in this growing industry trend.