27 Feb 04

While some significant barriers still exist to the widespread displacement of landlines by wireless phones, consumer attitudes clearly illustrate the potential for wireless substitution as the wireline subscriber base and value proposition continue to deteriorate, reports In-Stat/MDR.

The high-tech market research firm finds that 14.4% of USA consumers currently use a wireless phone as their primary phone, with the remaining 85.6% still using a landline as their primary phone.

However, among those consumers still using a landline as their primary phone, 26.4% would consider replacing it with a wireless phone, demonstrating a significant potential for wireline displacement over the next five years.

"Mobile wireless services have quickly become a viable alternative to traditional landline service for a large number of consumers in the U.S.," said Clint Wheelock, director of In-Stat/MDR's wireless research.

"With wireline-to-wireless number portability introduced as part of the FCC's Wireless Local Number Portability (WLNP) mandate, which was implemented by wireless carriers in November 2003, consumers now have an unprecedented degree of flexibility and convenience in cutting the cord on their landlines."

In-Stat/MDR has also found that consumers using a wireless phone as their primary phone are most likely to be young (ages 18 to 24), single, residing in an urban area, subscribers to Sprint and T-Mobile, and mobile data users.

Factors that would influence consumers to drop their landline phone in favor of wireless include better prices, improved network coverage and quality-of-service, and richer mobile phone functionality. Factors that would prevent consumers from replacing their landline with a wireless phone include lack of reliability and cost of service.

It is most likely that 29.8% of wireless subscribers will not have a landline by 2008 concludes the report.