Wireless Spending Outpaces Landlines

October 21, 2004
If there's any doubt that cell phones are replacing so-called wired line phones, a study from TNS Telecoms should dispel it. The market research firm found that total U.S. household spending on wireless services now represents the largest share of dollars spent on telecommunications services.

Another study finds that younger males are the Americans most likely to rely solely on a cell phone, doing without a wired-line phone.

In the second quarter of 2004, 30% of spending on telecommunications services was dedicated to wireless service while wired line service represented 29% of spending, a drop of three percent from the previous quarter.

The average U.S. household spends $47.87 on wireless service each month and a total of $158.88 on all telecom services. At the same time, the second quarter results also show that growth in total telecom spending has stalled with a decline of one percent from the spending in the previous quarter.

"These results represent the nature of the hyper-dynamic telecommunications market today," says Charles White, vice president of TNS Telecoms. "As the total size of the market stalls service providers will increasingly be battling against other telecom services for growth."

As of the second quarter of this year, 70% of households have at least one wireless phone with the average household with a wireless phone spending $69.94 each month, an amount which continues to grow. Alternatively, 96% of households have a wired line in their home with an average spending of $54.78.

The Young and the Wireless

Young males are the most likely to forgo a landline telephone, according to Mediamark Research, which found that 8.1% of U.S. households do not have landline telephones, up from 4.2% in the spring of 2000.

"After years of coexistence between cells and landlines, cell phones have recently begun to contribute to the desertion of landline service, "said Andy Arthur of Mediamark. "While non-landline households traditionally have been characterized by downscale and less-educated consumers, this is clearly no longer the case."

The median household income for the non-landline population rose from 63% below that of the general population to 49% below. And the college graduation rate for non-landline consumers has more than quadrupled, to 11.8%. And, the non-landline consumers of 2004 are increasingly younger.

The research shows that while males represent 48.0% of the total adult population, they account for 57.6% of the cell-only population. "If the traditional patterns hold, these young males may be the leading edge of a larger, more mainstream group of cell-only consumers," said Arthur.

In the current presidential campaign, some pundits have suggested this trend might be skewing polls, since pollsters only call voters who have a landline.

A full 7.9% of single-person households are now cell-only, compared to 5.5% of households in general. That means that 16.7% of single-person households in which a cell phone exists are now cell-only. And, according to the 2004 study, the number of cell phones is equal to or greater than the number of household members in at least 26.3% of U.S. households.

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