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AT&T faces dropped landlines

Posted Jul 23 2008, 12:42 PM by Kim Peterson
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People are ditching landlines faster than expected, analysts tell the New York Times. But AT&T gets about a third of its revenue from the landline business. Uh oh.

It's a problem that all the big telcos face right now, as people get so reliant on cell phones they find no need for a traditional landline phone. That leaves investors feeling "slightly queasy" about the telecom sector these days, according to a Sanford Bernstein analyst. 

In its earnings report today, AT&T said its landline count dropped 2.6% in the last three months to 58.9 million -- a surprisingly fast decline. So why are AT&T shares up 5% to $33.45 today? Mainly because people are happy the company didn't do worse.

AT&T matched analyst estimates on profit but whiffed on revenue. The company's profit was 63 cents a share in the second quarter, up 30% from a year ago. Revenue increased 4.7% to $30.9 billion, but analysts had been looking for $31.1 billion.

Experts say that in hard economic times, people will drop their landline before their cell phone. But that doesn't mean that wireless carriers are immune. Companies like Verizon are seeing slower growth as well.

There are about 262 million wireless users in the U.S., and 163 million landlines (and that includes the business landlines, too).

Related reading:

Teens and cell phones: a saturated market

Verizon to become largest wireless carrier

Unhappy with Sprint? You're not alone

Cable companies eyeing nationwide wireless network

Would you pay $100 a month for wireless?

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Comments

 

We had to go back to getting a land line after not having one fo 5 years for two reasons - A security system and to have DSL - Sorry to say it but DSL is much better than cable and in our neighborhood a security system is a must - Other than that, we don't touch our land line at all. AT&T is smart enough to figure something else out to get revenue.. oh yeah... providing new service to all the millions of iPhone that are required to use AT&T for their service!  Thats the ticket!

Jeff (Posted 07.23.08 3:36 PM) Report Abuse

We still use our real(landline) phone because we can get a flat-rate unlimited service including long distance and have soemthing that works when the electricity is out. The cell phone we have is for emergencies only, the only useful reason for having one.

Dave (Posted 07.23.08 4:39 PM) Report Abuse

I dropped ATT like a bad habit, but not my landline.   Went with a cheaper and just as reliable company.

rhonda (Posted 07.23.08 8:20 PM) Report Abuse

Having to pay $25 in fees and misc charges for a phone I never used was why I got rid of my landline.

Greg (Posted 07.23.08 8:41 PM) Report Abuse

I kept a landline for internet use, until sattalite, I was soohappy to cancel that landMINE OF MONEY

priscilla (Posted 07.24.08 4:05 AM) Report Abuse

We should all keep landline phones and have a simple plug in phone that uses no power. They're forcing us to go to digital from analog. I trust analog to still be useable rather than digital in emergency situations.

Galen (Posted 07.24.08 5:26 AM) Report Abuse

I got rid of my landline and got a video phone through ACN. The phone was free and I only pay $30.00 a month for all including long distance to other countries. I will NEVER go back to a landline. Also I think there is a converter box you can get for security alarms. ADT offers one. gaffneydo@hotmail.com

Donna (Posted 07.24.08 4:07 PM) Report Abuse

I am a loyal Sprint customer. I have been with them for over 8 years and just today ordered a new phone. All of my friends have ATT or Verizon and they always complain of bad signal issues. I never have any problems with signal and have never had a serious equipoment issue. I use my cell phone as my primary contact besides email. I have a landline, but never give out the number. I can't remember the last time that I actually used the landline other than for my tivo service.

Wayne (Posted 07.24.08 5:14 PM) Report Abuse

I am dropping att land line this week due to another 4 dollar increase in their monthly bill.  the cost of long distance was 7.49 and I never used it once.

When the total bill hit 49 doolars and I use the land line no more than 5 times a month I said enough is enough.  

Thye are begging people to drop them,  maybe they make more on other ventures.

diane (Posted 07.25.08 8:14 AM) Report Abuse

I haven't had a landline in years and am only contemplating getting one because I work in customer care at home and a lot of my clients are requiring that I get one. But I dislike AT&T enough to think about going back to riding the train to work. It is only $13 dollars a week and would still be cheaper than getting a Landline.

Michelle (Posted 08.13.08 9:13 AM) Report Abuse

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