Tuesday, April 8, 2014

Cutting The Telephone Cord

With all the discussion centered around households cutting the cord to their cable service in favor of OTT services, we sometimes overlook the fact that households are cutting the proverbial telephone cord as well.  In fact, the drop in landline phones is huge.  "Nearly 40% of U.S. households now have no landline phone, and there are more wireless devices than people."  With the rise of cellular, there is no reason to share a house phone when people can call or text or email you directly on your mobile device.

Verizon and AT&T have both moved faster into the wireless space especially as they manage the competition from cable with IP enabled landline phone sevice.  No longer is copper the backbone of the house; most likely it is coaxial cable or fiber.  And as the WSJ indicates, the push is on by these telco heavyweights to "cut the cord" from copper and embrace an IP driven world.  "The new technology also is far less regulated."  That brings up a whole new set of issues in connectivity between platforms. 

And AT&T envisions a whole new way to connect customers.  "AT&T wants new and existing customers to eventually use broadband service, mobile phones or a conventional phone that connects to a router-like box. The box plugs into an electrical outlet and zaps signals to a cellphone tower."  No more copper, no more switching technology.  But change is not always easy to accomplish and many are naturally wary.  Ultimately, the challenges mentioned in the article will be managed. 

We are moving in an IP direction with mobile and wireless key elements in this change.  Government regulation may be behind but it will surely catch up.  And given the cost efficiencies, there seems nothing to stop AT&T, Verizon and other telcos to move away from wired copper to the home in favor of new communication platforms.