By Rhonda Wickham
Wednesday, September 17, 2008
More than 20 million U.S. telephone households now use wireless only, according to Nielsen Mobile, a service of Nielsen Company. The research firm says that 17% of households are now “wireless substitutors.”
As consumers look for ways to cut household expenses in the face of a tightening economy, many see the $40 a month for landline service as expendable.
Nielsen points out that many households cutting the cord have incomes of $40,000 or less, and usually have only one or two residents versus many. Finally, moving or changing jobs usually provides the impetus for individuals to cut the cord.
“When you consider the economy, the growth in unlimited voice packages and the overall improvement of wireless networks – the trend toward wireless substitution is not itself surprising,” said Alison LeBreton, vice president of client services for Nielsen Mobile. “What’s more surprising now is the diversification of the cord-cutting population – the expansion of this practice beyond young, single, lower-income individuals and into a broader universe of households.”
LeBreton said Nielsen Mobile expects a more aggressive spike in cord-cutting activities in the second half of this year.
“Tightened pocketbooks leave households looking for ways to cut recurring costs such as landline phones,” she said. “Even in a stronger economy, consumers would realize the cost-saving opportunity, but in today’s market that extra $30 or $40 a month in your pocket has a certain appeal, offsetting things such as rising gas costs.”
However, wireless substitution isn’t for everyone. Roughly 10% of landline phone customers that have experimented with wireless-only have returned to landline service. The motivators for going back are usually tied to needing landline for security systems, satellite TV, pay-per-view and fax machines.