What's the point of a home landline phone?

Nick Thomas/Informa Telecoms and Media
01 Nov 2012

Forgive me if I’m grumpy but I had a bad night. At 5.30 this morning our home phone went. Assuming it was some family emergency my wife ran to pick up to be met with a recorded message telling her about an opportunity to review her personal pension.

And so the home telephone, the great liberating technology of the 20th century, continues its decline into irrelevance. Moreover, it’s not just irrelevant, it’s becoming an active nuisance.

Where the mobile phone is like a sparkly new shopping mall full of the latest must-have goodies, the landline is, by comparison, the flyblown high street where most of the shops are boarded up. Forgive the anecdotal evidence, but among my friends and acquaintances, all important conversations now happen on the mobile device.

UK regulator Ofcom’s data supports this idea of a mass migration, in the UK market at least. Even elderly relatives (my mother-in-law) are now able to buy for a modest cost, a monthly allowance of minutes that enables them to indulge in long conversations with family members (my wife) without fear of bill shock.

The landline, on the other hand, is now abandoned, (for millions of users in the UK at least) and monopolized by ambulance-chasing chancers peddling unwanted financial products. At 5.30 in the bloody morning.

Mobile devices and packages evolve at an impressive rate, as anyone who has upgraded their phone at the end of a 24 month contract will have noticed. Within the connected home, broadband speeds have increased, while pay-TV providers have also been upgrading and improving their services, adding multi-screen services, apps and catch-up services to ensure they remain competitive. In that period, landlines have barely evolved at all, yet in some cases still account for 30%, 40% or even 50% of the total triple-play bill. That is simply unsustainable.

Other colleagues at Informa are better placed to advise and comment on Telco strategy. My wider interest is in finding business models within the telecom and media space that are broken, and to see how companies are reinventing themselves to remain relevant and profitable.

With the home phone becoming increasingly marginal to consumers’ lives, a huge hole could yet be blown in operators’ businesses. This is not in itself a surprise. What may yet surprise Telcos, however, is the rate at which this change is happening.

Nick Thomas is a principal analyst for TV and digital media at Informa Telecoms and Media. For more information, visit www.informatandm.com/

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