Contributed by, Keith Perry.
Consumers are cutting from their homes phone service at an astounding rate forcing AT&T to confront and embrace new technologies.
Is it the end of the Plain Old Telephone System or a communications reality check for AT&T?
A recent government report finds that more than 700,000 households monthly dump their telephones lines!
The fact is that AT&T is losing “loyal” customers at an astounding rate. AT&T themselves called it “hemorrhaging.”
Perhaps AT&T could probably take a hint from the Pink Floyd song “Comfortably Numb”
Is there anybody in there?
Just nod if you can hear me
Is there anyone home?
So has everyone gone mobile and is AT&T to comfortably numb to adapt to change
People are cutting their Plain Old Telephone Systems (POTS) for wireless and broadband connections opting for speed and flexibility, and dumping their redundant land line telephone system to save money.
Legacy = Relic
When the US Government recently asked AT&T to comment on transitioning their legacy phone system to an all internet network, AT&T replied that if broadband and IP based services represent the future of telecommunications, then their legacy network and POTS systems are relics of an earlier era.
Relics indeed. AT&T continued quoting numbers you would expect from a broadband competitor – not from them:
The numbers in this government report speak for themselves:
- There are more US broadband connections than telephone lines.
- Approximately 25% of households have abandoned POTS altogether
- Less than 20% of Americans rely exclusively on POTS (home phones)
for voice service.
- About 700,000 lines are being cut every month.
- From 2000 to 2008, the number of residential switched access lines fell by almost 50%.
- Minutes have fallen by a staggering 42% from 2000 through 2008.
AT&Ts 27% revenue decline from 2000 to 2008 prompted phrases such as: “irreversible trend”, “hemorrhaging customers and revenue”, “collapsing POTS business model” and “this a death sentence.” Again, all their words.
But this is only half of the picture, as perhaps more than any other business in the world, the wireline TelCo is a fixed cost business.
The Bottom Line
So what does this mean for you and me? The end result is that anytime a household or business cuts its land-line, the fixed costs must be spread over a smaller customer base and thus increasing the average cost per customer.
By being “loyal” (or perhaps a land line Luddite) your costs can only go up as others save money jumping on the IP bandwagon.
Yes, they are listening. AT&T has its ear to the ground here. It is us users who are hearing the final bell.
700,000 lines are being cut every month and getting rid of their plain old telephone system.
What are your January 2010 resolutions to start saving money?
Amos White is a Social Media Marketing Evangelist and public speaker.
Follow Amos on Twitter @Mos42