Demise of the Landline? A Bit Premature!
The eventual
death of landlines has been predicted for decades now, by both inside and outside the wireless community. News wires are replete with story after story of a future nirvana when we won’t need tethered connections to communicate.
Pundits of this theory add credence to their beliefs by looking to the abysmal landline loss numbers sustained over the past two decades by the major U.S. and European telecommunications carriers.
There is no question that the number of U.S. households using only wireless telephone service is increasing.
Neilson recently reported that one out of five households could be wirelines by year end 2008!
But this doesn’t tell the whole story. The flip side of these numbers demonstrates that more than 80% of US households still maintain a wired telephone service. Worldwide, broadband
DSL wireline deployments continue to set the pace for all broadband service options and remain the most cost effective method of deploying broadband connections.
On the surface, the net worldwide landline gain and simultaneous landline loss in the U.S. appear to work in contradiction. A deeper look at the broadband phenomenon, however, reveals a very significant paradigm shift.
At NXTcomm 2008, Randall Stephenson CEO of AT&T, began his keynote speech asking a very poignant question:
What business are we in? While the answer may seem obvious coming from the head of a major telco, Mr. Stephenson’s question prodded the audience to ponder the future of telecommunications.
He saw ever increasing demand for bandwidth, video file sharing and conferencing over both wired and wireless networks, email, video gaming and cell phone text messaging all combined, threatening network capacitances worldwide.
One network executive noted that if 5% of a neighborhood simultaneously logged onto U-tube, local DSL node capacity would be taxed beyond capacity. No one foresaw how quickly network capacities would be threatened.
Mr. Stephenson rhetorically answered his own question by stating that AT&T and others in the telecom industry are, “in the business of velocity.”
In a sentence, Mr. Stephenson redefined the future of modern telephony as the supplier of the consumer’s ever increasing demand for bandwidth.
Another way of looking at the telecom paradigm shift is noting that carriers are moving from narrowband to broadband and from telephony to video and data delivery. The copper wires that carry the telephone signal are quickly becoming large pipes of bandwidth delivery, relegating the telephone portion of that pipe’s content to a small seat in the back row, at least for now.
Telecom professionals and consumers both realize that the landline remains the most reliable and cost-effective method of providing this broadband capability. Again, in its current form, plain old telephone service (POTS) is becoming a smaller and smaller portion of the broadband pie.
Those who predict the future death of landline telephone service are a bit myopic.
In my opinion, no amount of wireless arrogance will discourage the embedded wireline asset as it lays awaiting innovation.
Once sufficient broadband capability is provided to the last mile, whole new worlds of home entertainment and communications capabilities are born.
One only has to recall the recent presidential election where we saw networks unveiling virtual imaging and wall-sized interactive touch screen monitors.
A recent Yellow Pages commercial depicted a young man in real time interaction with his karate teacher, again utilizing interactive virtual imaging.
We have achieved George Orwell’s 1984 prediction, with interactive television walls becoming reality. All these advances and many more become available to the home once sufficient bandwidth is available. This includes real time video home telephony!
Follow the popular rhetoric and prognosticate the death of wired telephony if you must but understand this, in 2007 a full 80%* or about 198 billion dollars of total equipment
CAPEX (capital expenditures) by the telecommunications industry worldwide was spent
outside the mobile arena.
*Note: The Fierce Wireless article is a bit misleading. If 20% CAPEX in wireless represents the “bulk,” of expenditures doesn’t that mean the vast majority or 80% was allocated elsewhere? Referencing the Broadband Forum data we understand the majority of broadband deployments for 2007 went toward copper wireline and DSL deployment/upkeep.
No matter how one interprets the data, worldwide landline spending far outweighed wireless spending many time over in 2007.
As we await Rim Semi news of the finalization of this next round of funding, we are heartened to know the world eagerly awaits the CupriaTM solution.
D1
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