The End of Home Phones

TECHNOLOGY - Its coming... a day when traditional home phones (aka landlines) become extinct. Probably within the next 10 or 20 years.

According to a poll by research firm IDC Canada 12% of Canadians no longer have landlines and have switched solely to cellphones, up 4% from 2009.

And in the USA the statistic is even higher, 25% of Americans [in 2009)only use a cellphone.

Meanwhile the Convergence Consulting Group is predicting 26% of Canadians will have ditched landlines by 2014.

The reason Canada is lagging behind the USA is because wireless is still a bit expensive and Canadians (especially in rural society) have been cautious about switching. In the USA however there has been low priced and unlimited wireless cellphone plans since 2005... whereas Canada's cellphone market has been slow to respond to the technology available.

But that is changing as we speak. New wireless companies like Mobilicity, Public Mobile, WIND Mobile and Quebec's Videotron are playing a David Vs Goliath game against Canada's big cellphone companies (Bell Canada, Fido, Telus and Rogers). The older/bigger companies have been deliberately slow to react and have been gouging consumers for the past decade.

FACT: Canada currently has the most expensive wireless companies on the planet. Proof that we're being overcharged.

Unlimited talk and text packages (that are cheap) are here to stay and its about time the older companies started dropping their rates. Rogers has even introduced a smaller company Chatr just so they could try and defeat the new upstart competition (which is technically illegal because it breaks fair competition laws.

But this attempt to stifle the competition isn't likely to succeed. Canadians are fed up with being overcharged by the Big Four wireless companies, ridiculous 3-year contracts and overpriced cellphone plans. The era of getting ripped off is close to extinction.

“In 2007, we had three wireless providers, we had system access fees, and we were paying maybe $2,500 for a gigabyte of data on a wireless phone,” he says. “Now, we have lot of choice,” says SeaBoard Group research analyst Amit Kaminer.

“Their plans are cheaper, there's more value in them and they're actually much easier to understand,” says Kaminer. “You really don't have to worry about your minutes. You're always comfortable that you won't have surprises with your bill at the end of the month.”

Kaminer says Canadians are heading into “a new dawn of wireless. What's not to love?”

And lest we forget that Google is entering the cellphone market... so that should prove interesting to see the kinds of pricing plans they unleash.

Meanwhile its not just cellphones that are a threat to home phones. There is also Google Phone, Skype, VOIP, Vonage and other internet-based phone lines which allow for unlimited phone access for either free or so cheap its ridiculous.

According to Telus their long distance revenue has dropped from 72% of their overall income in 2000 to just 28% in 2009 we can see the effect internet based phone lines is having.

“You could see these trends coming,” says Telus spokesperson Jim Johansson.

However don't expect landlines to become extinct overnight. Businesses and the older/more rural generations are slower to try cellphones and try the new technology. It may be 20 or 30 years before landlines disappear entirely.

“Most people are creatures of habit,” says SeaBoard's Kaminer. “They've known the phone company for years. It's not the easiest thing for them to leave or consider other options out there. The land line has been with us for over 100 years. It won't happen overnight. But it will happen.”

NOTE FOR THE FUTURE: WE ARE PLANNING A BIG ARTICLE ABOUT COMPETING CELL PHONE PLANS IN CANADA AND WHICH ONES WE THINK IS BEST. STAY TUNED.

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