Telecoms seek ways to save landlines

Published 5:00 am Sunday, July 1, 2007

Kristin Larson hasn’t had a landline telephone in her home since she moved to Bend in 2003.

“And I have no intentions of getting a landline,” said Larson, a lawyer by trade, adding that most cell phone service plans include free long-distance calls. “(Cell phones) are cheaper, especially when you factor in the long-distance part. It definitely helps.”

Larson isn’t alone. Local industry officials say more consumers are forgoing getting a landline at their place of residence every day, instead relying on cell phones as their chief means of telephone communication.

“Anecdotally, what we do see is that a large number of people are telling us that (going cellular) is their plan,” said Kipp Meleen, the Bend-based Northwest territory sales director with Unicel, a cell phone service provider. “And that number continues to increase. Month after month, we are seeing more and more people going that route (versus landline phones).”

Meleen said Unicel doesn’t track the number of Central Oregonians switching from landlines to cell phones but noted that a report from research firm Harris Interactive Inc. showed that up to 43 percent of phone consumers nationwide were considering making the switch as of last December.

But the trend of cell phones eroding the conventional landline telephone market hasn’t stopped a number of companies’ ventures into wired phone services locally, mostly through Voice-over-Internet Protocol, or VoIP, a technology that uses Internet fibers rather than copper lines to transfer phone signals.

One of those companies is BendBroadband, the main player in the local cable television and Internet market. BendBroadband introduced its phone service about 18 months ago, and officials said demand remains strong.

“So far, the service is meeting all of our targets,” said John Farwell, vice president of business operations with BendBroadband, who said figures were unavailable. “It’s matching what we’re seeing from other cable companies offering phone services in other markets.”

The factors have proved challenging for Qwest Communications International Inc., the main conventional phone service provider in Central Oregon, one official said.

“Not only do we have an increasing number of people going to cell phones, but the amount of competition (among landline providers) is growing,” said Bob Gravely, media manager of Qwest in Idaho and Oregon. “So we have to be very adaptive, and it’s very important for us to provide the best service we can.”

Qwest’s way of dealing with the competition outside conventional copper phone lines, Gravely said, is simple: If you can’t beat them, join them. But he also added the company continues to see support for conventional lines, noting that many customers still value the reliability of landline signals versus wireless ones.

“We deal with (increasing cell phone usage) primarily by offering cell phone services ourselves,” he said, noting his company offers both wireless phone and VoIP services. “We want to offer the services people want. So with us, if you want a cell phone, you can get it. If you want a landline, you can get that. But landlines aren’t going anywhere anytime soon.”

BendBroadband has no plans to add a wireless option to its phone service, said Vice President Farwell. He added that his company has made adjustments — such as offering a low-cost, local-only phone service — aimed at providing backup phone service for cellular users.

“That’s one of the responses we have made for people with cellular phones,” Farwell said. “But at any given time, there are up to 25 percent of people (in Central Oregon) who don’t watch television, and we’re not aiming our cable television services toward them. The phone market is no different. We’re not going after the percentage of people not interested in (land- line) phone service. We’re after the people who do, and there’s still a huge market for that out there.”

But that market won’t include lawyer Larson.

“I’m never home,” so a land- line to her place of residence isn’t practical, she said. “The only thing (about the cell phone) is that people can expect to reach me and for me to be available 24/7. But that isn’t really a complaint.”

Unicel’s Meleen said his company has focused on phone industry trends, where the lines of communication are increasingly expected to be person-to-person rather than location-to-location.

“I think wireless is definitely the way to the future,” he said, adding that as cellular bandwidths expand, it may be possible for cell phones to further erode the markets of phone and cable companies by offering extended video and Internet services. “It may take some time, but if people can develop the technology and make it work, why not?”

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