Telecoms offering wireless and wireline service are cashing in as a new Federal Communications Commission report reveals around 90 percent of U.S. residents own a cell phone and nearly a quarter have axed their landline service.
The shift is bad news for landline-only services, but double-duty companies like AT&T and Verizon stand to turn a profit from the changeover.
A family of four, for example, can share a Verizon or AT&T landline for as little as $20 a month. Those same companies can charge upwards of $200 for that same family to get cell phones. Verizon currently leads the wireless pack in profit margins, followed by AT&T.
Consumers aren't just moving away from landlines, they're also demanding more than just voice service, and wireless companies are cashing in. Voice service charges declined to around $33 a month in 2009, from over $47 in 2004, but data and text costs jumped to $12 from just $2 over the same period.
The disappearance of landlines may also mean the extinction of phone books, or a move to putting cell numbers in them. That may also force cable, Internet and phone companies to increasingly focus on wireless service and broadband arms of their businesses.
In addition, some may shift to offering home phone service only through broadband Internet, such as what Vonage offers.
But these potential developments could spell trouble for rural areas, where it can be hard to find Internet or cell service. Less than seven out of 10 rural Americans have a choice of two or more wireless carriers and less than four out of 10 can pick from three or more, according to FCC Commissioner Robert McDowell.
"For 2008, these numbers were 62 and 29 percent respectively," McDowell wrote. "That said, we can and we must do better."
The FCC report is supposed to decide whether there is much competition in the wireless market in the U.S. Commissioners said that is unclear, and they want to see more competition so prices stay competitive, service gets better, and more people can have more options.
That competition will become increasingly important in areas that currently have one or no wireless carriers to choose from, especially as the need for wireless in those areas grows and landlines die, or in these instances, become the last places in the U.S. to find landlines.
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