12 Million Americans Have Ditched the Landline

According to an updated forecast from SNL Kagan, the USA's cable industry is positioned to continue market share growth in the residential phone business, but the gains could prove tenuous in this increasingly dynamic segment.

The SNL Kagan analysis illustrates the telcos' loosening grip on the market and the opportunity created for alternative services. In the past two years, the telcos' share has dwindled from 90% to 74% of total connections, with the five-year outlook estimating another 23% drop. The main competition in the space has come from the increased availability of IP voice services from cable operators coinciding with the phase-out of older switched-circuit technology. SNL Kagan projects a steady increase in IP voice subscribers, reaching 31.4 million in 2012, putting cable's market share at 26%. The 10-year forecast shows cable penetration of homes passed stabilizing at 27%.

Concurrent with cable's advance, SNL Kagan sees wireless replacement services gaining momentum, perhaps posing an even greater threat to telco's hold on the market.

Approximately 12 million households currently opt for a wireless-only phone connection, with that number expected to increase to about 26 million in 2012 (equal to about 22% of market share.) "The maturing of the younger, more tech-savvy demographic combined with emerging technologies (such as femtocell) set to improve wireless coverage and reduce costs, will further promote the position of wireless services," says Ian Olgeirson, Senior Industry Analyst for SNL Kagan.

Posted to the site on 29th April 2008

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