Is the landline market dead because of wireless cell phones?

The answer would be ‘Yes almost’

The advent of cell phones and wireless are so aggressive that the traditional phones have now become almost useless.

You can just access the web via high speed DSL which uses a landline telephone company or a landline cable company to access the Internet. But even that has become out of date in some places.

Loss of landlines

Previously the call rate of landlines was Rs. 2 per call- landline to landline and Rs. 3 per call- for landline to mobile phones (in India). Today it is decreased to one rupee for all calls- both landlines and cell phones. Most of the BSNL and MTNL subscribers have given up landlines and switched on to cell phones because of its mobility and affordability.

Cell and broadband internet card

The only reason why people till now bore landlines was for the accessibility of internet through DSL modem. But today even broadband internet card is available which lets you access World Wide Web by just plugging in the USB device with the broadband internet card inserted.

Online VoIP applications

Along with Incumbent Local Exchange Carriers (ILECs) losing long distance minutes to cheaper, wholesale providers, the overall landline subscriber base in most parts of the U.S. and Canada is declining at an alarming rate. Even in India the Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), have witnessed the surrender of landline connections, with close to two million subscribers in the first seven months of the current fiscal. The latest estimates report the figures to 17.9 lakh BSNL subscribers across the country.

Cell phones are largely responsible for this, as the cost of wireless voice minutes sinks to more reasonable levels.

Strong competition from the cable sector

This is another major factor, as incumbent cable giants equip their networks to handle IP-based digital telephone calls. These companies are having a much more profound effect on the telephone market than standalone VoIP providers like Vonage, since most cable providers have the built-in advantage of an existing subscriber base.

A study by TRAI

In India the sharp decline in tariffs is evident from the exercise carried out by the Telecom Regulatory Authority of India (TRAI) recently, which proves that the spread of the cellular services across the country has shaken up the landline market.

The overall cellular mobile tariff (effective amount per minute including all fixed and variable costs dpaid by the subscriber) for 100 minutes/month of usage has declined from a level of Rs 6.32/month for the quarter ended December 2000 to Rs 1.77/month for the quarter ended September 2003, showing thereby a decline of about 72 per cent. Likewise in the case of tariff offered by WLL operators, it has declined from a level of Rs 4.27/minute in the quarter ended March 2001 to Rs 2.08/minute for the quarter ended September 2003 (51 per cent decline). Reason enough for a landline subscriber to shift to the more convenient wireless service

Hence it is evident that the landline market is almost dead because of wireless cell phones.