Industries

Copper-line networks disappear as customers rely on wireless phones

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Print this page by Richard Foster
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The percentage of households with
landlines in Virginia had dropped to
71 percent by 2011.

Like the telegram, movie rental stores and phone books, the landline phone is fast heading for technological extinction.

Just consider the numbers: Back in 2001, about 3.1 million Virginians — not even half of the state’s population — subscribed to cellular phone service. Smartphones, tablets and wireless data connections still were limited to the realm of science fiction.

By the end of 2011, according to the Federal Communications Commission, the number of wireless subscribers in Virginia had jumped to roughly 7.8 million. Since Virginia has about 8.2 million residents, the large number of cellphones suggests that many people own more than one.

During roughly the same time period, the Census Bureau says the number of homes with landline phone connections dropped by 25 percentage points — from 96 percent in 1998 to 71 percent in 2011. Millennials (the generation born between the early 1980s to 2000) are driving the trend, with two-thirds of them using wireless mobile devices instead of landlines.

The 2000s were a pivotal time of change for telecommunications, and in many ways the industry still is catching up to the technological wave of innovative smart mobile devices that has been swelling exponentially since the introduction of the iPhone in 2007.

As part of that change, the traditional copper-line analog voice telephone networks — affectionately known in the industry as POTS for “Plain Old Telephone Service” — likely soon will be relegated to history’s dustbin, along with other outdated technologies such as the telegram. AT&T and Verizon are in discussions with the FCC and federal authorities on how to eventually shut down the copper-line system first introduced in the 1870s and replace it entirely with a high-speed fiber-optic and broadband network.

Many consumers with landlines already are using a broadband or fiber-optic network. Only 25 percent of U.S. households will have a traditional copper phone landline by the end of this year, according to industry trade group U.S. Telecom. And even that estimate may prove to be overly optimistic.

In 2000, at the peak of landline usage, more than 186 million American homes had landline phone accounts. As of 2013, AT&T and Verizon reported to the Securities and Exchange Commission  that they have just 21.1 million copper POTS landline accounts still in use.

“The vital fact is that the world has changed,” says AT&T spokesman Dan Langan. “In order to meet consumer demand today and in the future, we must move … from a voice network to [an Internet-based] broadband network where voice is just one of many applications riding on that infrastructure. This transition is already happening, and consumers are leading the way — they want more, they want it everywhere, and they want it all the time.”

“Voice is not dead; just using wires … [for] voice is somewhat dead,” says Craig Drinkhall, vice president of product management and engineering for Waynesboro-based Lumos Networks. “The way it’s delivered is changing a lot.”

Wireless-only homes
The industry predicts that half of U.S. homes will be wireless-only by the end of this year, eschewing landlines entirely, says Vince Apruzzese, regional vice president of external legislative affairs for AT&T in Virginia. “At AT&T we’ve experienced a 30,000 percent increase in mobile data traffic over the last six years. That’s an amazing statistic,” he says.

For example, in October 2012 Apple CEO Tim Cook announced that users of Apple’s iMessage platform had sent more than 300 billion texts — some 28,000 texts per second.

“The way we communicate has changed so much,” says Harry Mitchell of Verizon Communications. “It used to be that [voice telephone] was the only way you could communicate short of writing a letter or sending a telegram if you needed to get it there fast. Now there’s email, there’s texting, IM, Facebook, Twitter, so the whole way in which we communicate today is vastly different than we did five years and certainly 10 years ago.”

Businesses also are moving more and more to mobile communications, particularly startups run by young entrepreneurs.

“We do see businesses are increasingly turning to wireless to meet their workplace needs, and we’re hoping to accelerate that trend,” says Melanie Ortel of Verizon Wireless. It offers small businesses a 4G LTE Jetpack service, a mobile hotspot that can allow 10 or more users to share a wireless connection without speed degradation.

Despite the increasing adoption of wireless, telecommunications industry experts say there still will be a place for wired connections — at least for the foreseeable future. But those wired connections will have less to do with voice and more with moving data.

For starters, all cellphone towers are fed by wired, fiber-optic connections. And mobile communications also can’t replace the speeds and data that wired fiber-optic lines provide for transferring large files, including videos and images. (Multimedia and video services such as Netflix or ESPN on demand are major bandwidth hogs, Apruzzese says.)

Landlines in the office
In a traditional office setting, Mitchell says, “a landline-based phone system can make sense for a number of reasons. … The vast majority of our business customers still have landline connections for voice and/or Internet connectivity.” In fact it’s common, he adds, for Verizon’s wired and wireless businesses to work together to offer companies packages offering both wired and wireless solutions. (Verizon Communications is acquiring the 45 percent interest Vodafone has in Verizon Wireless for $130 billion.)

If a business does have a wired infrastructure, however, it’s more likely these days that its voice telephone service will be just one of several applications on that wired system.

For instance, Drinkhall says, broadband and fiber-optic communications providers may bundle in Internet-based voice services that can include a whole suite of applications such as instant messaging, video conferencing, voice messages and “virtual presence” — the ability to answer a business call from anywhere to any device. Other services include the ability to choose a different area code for your business phone.

The goal, he says, is to make all of your business communications appear “like one big, seamless communication network” to customers, no matter where you’re taking the call from or how you’re interacting with them.

As for the future, if advances in wireless technology continue, AT&T’s Apruzzese says, it’s possible that even high-tech, fiber-optic wired systems could become completely obsolete.

“If you think about it, there may be a day when all people don’t have wire-line connectivity, and everything’s in the cloud,” he says. “With technology the way it’s going, I could never say never to tell you the truth. It’s conceivable. … The iPhone just came out in 2007. That’s less than 10 years ago and it’s just exploded since then. Who would have thought we’d be at this stage with the saturation of smartphones? Almost everyone has one now and they use it for everything.”


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