U.S. consumers opt for DSL instead of second voice phone line

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Some U.S. households are getting rid of additional phone line, to buy higher-priced forms of communication equipment, according to a survey* by the Dataquest unit of Gartner.

The survey showed that since January of this year, nearly six percent of U.S. households had replaced a traditional telephone access line with alternative communications modalities.

"A significant segment of the additional residence lines were never used for voice communications but rather for dial-up Internet access and faxing, so they were a natural market for upward migration to newly available and affordable forms of data communications," said Peggy Schoener, senior analyst for Dataquest's telecommunications and networking group.

"Additionally, the increasing mobile nature of society together with competitively priced, technologically viable wireless offerings have diminished the requirement for multiple wired access lines for voice communications."

The survey reported that of all residence access lines replaced since January, 55% migrated to high-speed broadband access. The impact of the migration of almost 4 million dial-up lines to higher-priced broadband Internet access has significant revenue implications for those service providers capturing the broadband customer.

The majority (70%) of these voice lines replaced by broadband migrated to one of the incumbent local exchange carrier (ILEC) high-speed residential services.

With DSL the most popular migration choice, analysts say that the ILECs are capturing a significant portion of the displaced voice access lines. For other market players offering competitive services the ILEC losses are their gains.

The presence of wireless phones in U.S. households has reached a critical mass and continues to grow. Dataquest's June survey reports that 64.3 million households have at least one wireless phone available to the household. This represents nearly 61% of all households, increasing from 50% reported 16 months earlier. Of all households reporting residence access line replacement over the past six months, 2.3 million or 33% of lines were replaced with a cellular/PCS phone.

"The attractive per-minute bundled pricing plans, free minutes and other promotions offered by the highly competitive wireless industry have made wireless calling prices competitive with, and in some cases better than, wireline calling rates," Schoener said. "Add the attractiveness of the mobility factor to pricing considerations, and household voice communications contention among family members is being solved by wireless as opposed to wireline calling.

* U.S Residential Wireline Voice Access Lines Head South, Revenue Heads North." This report examines the trend of replacing a traditional telephony access line with alternative communications modalities and the near-term and long-term implications to the telecommunications industry.

About Gartner Dataquest
Dataquest provides the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software and services sectors of the global information technology industry.
Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients understand technology and drive business growth. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut, and consists of 4,600 associates, including 1,400 research analysts and consultants, in more than 80 locations worldwide.

Gartner Dataquest

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