The US Bureau of Labor Statistics reported that the wallet share of landline dialtone service is shrinking. Let's explore this trend. What is getting more walletshare? Wireless services.

Why is that happening?

First of all this is an aggregate calculation since for many all-wireless households, the landline spend is $0. See our other blog posts on the Nielsen's Report, CDC's complaints about non-landline households and CDC Mobile Users Report.

It's a case of what the competition has and what landline services don't have.

Wireless services offer inexpensive family bundles for active families. In my case, we have a family plan with all you can text. We can call each other and other T-Mobile users at no cost. I spend about what 2 telephone lines in TX used to cost, but get huge benefits from having the phone in my pocket. More value deserves more walletshare.

Landline services face competition from VoIP services and mobile services. Landline services are flat price, have borne the full weight of FCC taxation (e-rate for schools, the subsidy for rural telecom) and zero innovation in features since Caller ID (first patented in 1968).

What should landline service providers do?

This is the equivalent of a war of attrition. Fight for every customer. The goal must be to slow any inevitable and beef up the reasons to keep the landline:

  • Get some strategic help
  • Get customer insights – learn everything you can about your customers, including why those who quit the service, quit the service.
  • Lower prices to reflect lower value, or bundle more features in.
  • Work for tax relief on the service.
  • Package features that complement faster growing, higher value services. Maybe home security and dialtone?
  • Implement a home landline service using wireless networks.
  • Discount landline service for wireless customers since these customers are at greatest risk of dropping the landline service
  • Implement complementary features (one voicemail service, no charge calls between the home line and the mobile phones for example).

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