TMCnet News
Six Million Access Lines Switched Off in 2005By ROBERT LIU
TMCnet Wireless and Technology Columnist The Public Switched Telephone Network (PSTN) lost more than 6 million access lines in 2005, with the consumer/residential segment of the market leading the declines, according to statistics compiled by TMCnet.
For the year ended December 31, 2005, the four remaining regional Bell operating companies (RBOCs) reported total business and residential lines dropped 5.7 million, or 4.4 percent, from 2004 levels to 124.1 million switched access lines. The figures exclude wholesale totals as well as lines attributed to the Unbundled Network Element-Platform (UNE-P) rules, which require incumbent carriers to sell their lines to its competitors.
Churn (line losses) in the RBOCs’ consumer segments outpaced retail business and small- to medium-sized business (SMB) segments. Together, Verizon, AT&T, BellSouth and Qwest recorded 78.8 million consumer lines, a drop of 5.7 percent, compared with 45.3 million lines in the business segment, which only declined 2 percent from year-ago levels.
Including Sprint (which will soon spin off its local telephone operations into a new company dubbed “Embarq”), the nation’s top five local exchange carriers (LEC) reported plain old telephone service (POTS) lines decreased by 6 million in 2005 to a total of 131.2 million residential and business access lines. Of that total, consumer/residential access lines accounted for 83.9 million, or 64 percent of their total business. The business segment totaled 47.3 million lines for the Big 5 carriers.
“While the declines can be mainly attributed to churn to wireless operators as one customer after another is choosing to cut the cord, it is also a sign that voice-over-IP (VoIP) is having a greater impact on the RBOCs’ remaining business. And this trend is showing absolutely no signs of abating as nearly every new survey reinforces the notion that wireline erosion will accelerate for the rest of the decade,” said Rich Tehrani, President of Technology Marketing Corp. and Editor-in-Chief at TMCnet.
Consumer Access Lines*
*All figures in thousands Despite their losses, however, the Big 5 carriers (Sprint and the remaining RBOCs) still hold a lion’s share of the residential market, according to an analysis of TMCnet figures. Overall, the North American consumer/residential market totaled 107 million access lines in 2005, compared with 112.7 million in 2004. The RBOCs’ share of that market dropped to 73.7 percent in 2005 compared with 74.2 percent in 2004. But when combined with Sprint, the Big 5 carriers accounted for 78.4 percent, or nearly 8 out of 10 customers.
The figures compiled by TMCnet support the industry statistics recently released by the Telecommunications Industry Association (TIA). In its year-end recap, the TIA reported total landline revenue dropped 1.4 percent in 2005 to $192.3 billion due to the erosion in landline subscribers. During the same period, wireless services revenue surged 14.8 percent. TIA said landline subscriptions will continue to fall but the rate of decline will moderate as new services such as VoIP and broadband video help landline carriers retain subscribers. Meanwhile, a recent report by Sanford Bernstein said VoIP subscribers increased by 2.8 million in 2005, with 1.7 million of that coming from cable competitors.
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Robert Liu is Executive Editor at TMCnet. Previously, he was Executive Editor at Jupitermedia and has also written for CNN, A&E, Dow Jones and Bloomberg. For more articles, please visit Robert Liu's columnist page.
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