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Twenty-Million U.S. Telephone Households are Wireless-Only

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A new study from The Nielsen Company says that more than 20 million USA telephone households (17%) are wireless substitutors homes without landlines that rely solely on a mobile phone for their home telecommunications.

The research is from Nielsen Mobile and suggests that one in five U.S. households could be wireless-only by the end of 2008.

As the U.S. economy tightens and consumers look for ways to cut household spending, many are eyeing that landline phone bill, which averages $40 per month per landline household.

In addition to the universe of U.S. wireless substitutors, Nielsen's study reports that:

  • U.S. cord cutters tend to have lower income-levels--59 percent have household incomes of $40,000 or less
  • Smaller households, with just one or two residents, are more likely to cut the cord than larger households
  • Moving or changing jobs are the biggest life events associated with cord cutting: 31 percent of cord cutters moved prior to cord cutting and 22 percent changed jobs
  • Wireless substitutors tend to use their mobile phones more than their landline peers, 45 percent more per phone, but still save an average $33 per month in a household of one subscriber, less $6.69 for each additional wireless resident, when they cut the cord

"As wireless network quality improves and unlimited calling becomes increasingly pervasive, we expect the trend toward wireless substitution to continue," said Alison LeBreton, vice president of client services for Nielsen Mobile. "In a tightening economy every dollar counts, and consumers are more and more comfortable with the idea of ditching their landline connection."

Wireless substitution doesn't work for everyone. Ten percent of landline phone customers have experimented with wireless-only in their household, but then returned to landline service. Nielsen reports that needing a landline for another service (security system, satellite TV, pay-per-view, fax machine, etc.) is the primary reason people mend the cord.

"Landline wireless substitution may just be the start," says LeBreton. "As wireless data networks improve and speeds become more and more competitive with broadband, some consumers may cut the Internet cord, as well, favoring wireless data cards and other access through carrier networks."

The full report (pdf file, 12 pages) is available on the Nielsen Mobile website.

Percentage of Wireless Only Households by Life Event

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