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Report: Wireless substitution, VoIP overtake ILEC landline dominance

Convergence & VoIP Alert By , Network World
April 19, 2013 01:22 PM ET
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VoIP, unified messaging, products and services

Network World - We have long followed the trend of wireless substitution for landlines and the growing market share for VoIP as an alternative to traditional telco service. In a report released earlier this month, USTelecom said that, according to its estimates, more households now use wireless only than those that use an incumbent local exchange carrier (ILEC) phone service. The trade association's analysis and projections suggests that at the end of 2012 ILECs were no longer the dominant provider of residential voice services as more consumers "cut the cord" and as they transitioned to VoIP.

[ OPINION: Bring back the landline phone ]

The analysis and projections are based on various sources, including the Federal Communications Commission, the Centers for Disease Control, U.S. Census data and a variety of financial reports. According to the report, 39% of households were "wireless only" in 2012, and 43% are expected to have cut the cord by the end of 2013. The analysis estimates that 32% of households in 2013 will use a landline for voice services from someone other than an ILEC, leaving ILECs with 25% of the residential voice market by the end of 2013. (The ILEC share also includes VoIP services that the ILECs offer, estimated to be 6%).

As a reference point, ILECs had 42% market share in 2011, while cable operators had about 20%. Cable operators who provide VoIP services make up the biggest group of landline voice providers who have taken ILEC market, accruing a projected 26.7% share by the end of 2013. "Over the top" (OTT) VoIP providers account for about 3% of the residential voice market.

More information from this report, including more data and a discussion of the methodology, can be found here. Out thanks to USTelecom for releasing this data and analysis.

Read more about voip & convergence in Network World's VoIP & Convergence section.

Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. Larry Hettick, an independent analyst and consultant, is a 30-year industry veteran. He has covered VoIP and UC at Network World for 12 years.

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