Broadband Gains Don't Necessarily Mean Landline Losses - AT&T and Verizon's take

AT&T and Verizon executives gave the impression that there really are only two viable options: high-speed fiber-based broadband (FiOS) and broadband wireless (AT&T). 

"It's not whether you can get from 10 to 12 megabits but whether it's mobile or not," said Randall Stephenson, chairman/CEO/president of AT&T. "Can you access WiFi hotspots all over? Can you get 3G connectivity and have a mobile experience? As we're trying to get more bandwidth we're also wanting to ensure it's a mobile experience to our broadband customers." 

Mobile needn't be the end game, said Mastrangelo. 

"Operators can stem the loss of lines if they were to make them more valuable, which they've done zero to make happen," she said. "They've done nothing to take advantage of Unified Communications applications and different things you can do to make your fixed line more valuable. They just fail to do that in this country. It's almost like they don't care; it's arrogance." 

Like cable operators talking about customer service, however, the carriers spin a good line. 

"We've long since reached the conclusion that if we're unable to convince a customer to hold onto their fixed wireline phone, we still want to have some revenue stream coming in for voice service," said Bill Kula, a Verizon spokesman. "We're able to do that by offering a range of bundles that allow a customer to mix and match; combine wireless voice with wired Internet and TV service." 

Kula was basically re-stating what Doreen Tobin, the carrier's executive vice president and CFO said during the company's earnings call: Bundles hold wireline voice customers, but FiOS, not copper and not DSL, is the glue that holds the bundles together. 

"On the traditional access line side of the business, we saw some sequential improvement in retail residential primary lines, which were down by 460,000. Total switched access lines declined by 911,000. We continue to see an increasing correlation between our triple-play availability and line retention," she said. 

Those line loss numbers would choke a dragon, but they left Tobin undaunted. 

"As FiOS continues to scale and we expand triple-play coverage, we are optimistic ... and we see a more meaningful improvement in overall line loss trends," she said. 

The landline business continues to slide more precariously than a novice driver in a Dallas ice storm, and "it is not at the point where we as an industry think things have bottomed out; we have further to go," said Alcazar. "What the bottom looks like is unclear and will be determined by what the economy holds ... and what features and relevant technology either wireline or wireless companies can bring to the table." 

Bonded copper might be the safety net that at least softens the fall. 

"Carriers recognize that they have to stem their line loss, and they also recognize that their broadband customers are going to be where the lifeline's going to be in the future," said Martin. "Bonded copper technology is absolutely something that every one of our customers is talking to us about."

 

 

Broadband Gains Don't Necessarily Mean Landline Losses - AT&T and Verizon's take
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