The displacement of landline phones seems to be gaining momentum. In a new report by Instat/MDR, the research firm found that 14.4% of U.S. consumers are using a wireless phone as their primary phone. Of the 85.6% still using a landline as their primary phone, 26.4% said they would consider canceling their landline.
By analyzing the demographics of the group that goes wireless only, it's apparent that this trend should continue to grow. This consumer is most likely to be single and in between the ages of 18 and 24. As this group ages, it will be replaced by another generation with similar views on this issue. In fact, the report estimates that 29.8% of wireless users will not have a landline by 2008.
Aside from the wonderful opportunities to purchase goods and services from telemarketers during dinnertime, there may be very few reasons to have both wireless and landline phones. Unless you spend countless hours on the phone each weekday, the low long-distance rates and free local service may not be worth the monthly fees your landline carrier charges.
This looks like bad news for your landline provider, but great news for wireless providers such as Sprint (NYSE:PCS), Nextel (NASDAQ:NXTL), Verizon (NYSE:VZ), Cingular, which is a joint venture between BellSouth (NYSE:BLS) and SBC Communications (NYSE:SBC), AT&T Wireless (NYSE:AWE), which was just purchased by Cingular, and T-Mobile, a subsidiary of Deutsche Telekom AG (NYSE:DT). It remains to be seen which company will take this trend and make the most of it.
The reasons cited for using wireless as a primary phone include better pricing, improving coverage, more functionality, and greater flexibility. Those who stay with their landline listed reliability as a key issue. As wireless carriers improve their coverage and minimize dropped calls, more people will leave the ranks of the landline-lubbers.
As consumers say goodbye to two numbers, two voice mails, and too many telemarketers, Verizon may be best suited to take advantage. Many studies show that its coverage and service are rated very highly. In addition, it also has landline customers. If these customers already plan to make the transition, at least Verizon will have first crack at them. With the advent of number portability, cannibalization may be a better option than losing a customer altogether.
You can find more information on wireless trends in the Wireless World discussion board.
Motley Fool contributor Sasha Sobol does not own a landline or any of the stocks mentioned here.
