Wireline Customer Erosion?
According to the 2006 annual reports of AT&T and Verizon, the two largest US carriers, 7.4 million customers disconnected their wireline service in 2006. AT&T (including BellSouth) lost 6.3% of its wireline connections while Verizon lost 10% of its installed base. Of course, this trend is what led to the $86 billion acquisition of BellSouth by AT&T – to completely own the wireless unit (you may recall that Cingular had been a joint venture between AT&T and BellSouth), and thereby be more on the receiving end of this market transition.
This is a $5 billion/year problem for these two companies.
According to TMCnet.com, the average monthly phone bill in America is $54/month. JD Powers reports that the average mobile telephone bill is $66/month. Of course, because of the roaming and minutes counting dimensions of mobile phone service, the variability in mobile bills must be higher too. Nevertheless, the ideal customer for a wireline carrier has got to be the one who is also a mobile customer.
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