Growing, growing...gone

The Telecommunications Industry Association released numbers this week indicating that spending on wireless services in 2003 ($89 billion) surpassed spending on landline long-distance ($78 billion) for the first time. The TIA's annual Telecommunications Market Review and Forecast predicts that those numbers will continue to spread apart over the next several years, with wireline local and long-distance services combined experiencing a compound annual growth rate of 2% for the period of 2004 through 2007. Wireless, meanwhile, is expected to have a 10.7% CAGR over the same period.

Presumably, part of the TIA's purpose in issuing those numbers is to make sure wireline carriers are aware of the threat posed by wireless growth, much of which represents voice usage that displaces its wireline equivalent. A statement from TIA President Matthew Flanigan reads, in part, "...carriers hope to limit defections to wireless services by bundling landline local/long-distance services with high-speed Internet access and television programming."

Flanigan's line of reasoning makes perfect sense: Wireline carriers should do everything in their ample power to make their bundles as attractive as possible, leveraging high-speed access and transport technologies to offer their customers an expanding array of data and video options. I'm afraid, however, that there's little those carriers can do to stem the tide that's rapidly eroding their voice revenues. It's going to happen (maybe not today, maybe not tomorrow, but soon--and for the rest of your life): Wireless is going to rule the roost of both local and long-distance voice.

That dominance doesn't even take into account the additional revenue that wireless carriers are rapidly generating thanks to the broadening acceptance of enhanced messaging, premium content and other mobile data applications. Granted, those services don't necessarily compete with wireline, but they certainly strengthen wireless service providers' positions, not to mention their customers' satisfaction and loyalty.

What does that mean for wireline carriers? Two things, in my opinion: Kill cable by investing in your networks to ensure that the long-established, ever-reliable telco network becomes the predominant pipe for any kind of data and video applications consumers will ever want. And if you aren't already, get into the wireless business--immediately.

E-mail me at jmeyers@primediabusiness.com