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Buyers heed the call of wireless

The number of cell phone subscribers climbs as landlines in Florida drop.

By MADHUSMITA BORA
Published March 27, 2007


For Rachana Dinkar, her cell phone and BlackBerry are more than just a way of staying in touch with friends and family.

They wake her up, help her keep all of her business appointments, and play navigator when she loses her way in a new city.

"I can't imagine my life without them," said the 23-year-old St. Petersburg resident who works on corporate diversity issues for Outback Steakhouse parent OSI Restaurant Partners Inc.

The ranks of wireless devotees like Dinkar are not just growing; they're exploding. The number of wireless subscribers jumped more than 25-million last year to 233-million, according to a survey to be unveiled Wednesday by CTIA-The Wireless Association at its annual show in Orlando.

Even more dramatically, monthly text messaging traffic catapulted 92 percent year over year, the wireless association determined. Consider it solid evidence that America is catching up with the texting frenzy that captured Asia years ago.

"The time frame between us and others in the world is shrinking," added Chuck Hamby, a spokesman for Verizon Wireless.

Subscribers use sleek hand-held devices to manage their office work, listen to music, swap videos and pictures, and even surf the Internet. Many are ditching traditional landlines that once tethered them to the four walls of their homes.

In December, wireless service providers rang in $8.4-billion in revenues for services other than voice, a 29.5 percent jump from six months prior and up 72.7 percent from a year ago.

"There's convergence taking hold," said Joe Farren, director of public affairs at CTIA. "Wireless is now the hottest consumer product."

Farren and others agree the new numbers bode well for an industry that already is anticipating new services and products such as the iPhone this summer.

"We are now running out of people who want a cell phone and have good credit," said Roger Entner, senior vice president of communications sector at IAG Research, a TV ad effectiveness ratings company. "Basically ... you don't need a landline anymore."

A 2006 National Center for Health Statistics report found that one out of eight American homes did not have a home telephone during the first six months of 2006. Of those homes, 84 percent had at least one working wireless telephone.

In Florida, landlines slipped 7 percent from 2003 to 2006, according to a Florida Public Service Commission report. The number of residential lines has declined each year since 2003.

Sam Miller, a 47-year-old lawyer, ditched his traditional phone three years ago.

"Everyone I wanted to talk to called my cell phone," he said. "I was only getting sales calls at the home phone. It was annoying."

And it was definitely not worth the $80 monthly bill that arrived in the mail.

"If you look around you can get a good deal with cell phones, but with landlines they don't offer any," he said.

Service providers eager to retain or enlarge their turf were quick to read consumers' minds, offering deals to cell phone converts.

The price war is so intense that you now pay less while using more minutes and features.

"What's happening is the dynamics are changing," said Michael J O'Brien, vice president marketing and business development at Syniverse Technologies in Tampa, a global communications company.

The average revenue per subscriber for voice services has been on a downward spiral, O'Brien said. That's forcing service providers to get creative with other offerings. Hence the proliferation of BlackBerries and features such as messaging, gaming and custom ring tones, along with some video and television.

"I am wowed by what it the industry will continue to be," he said. "The BlackBerry now lets you clip your office to the belt. Throw in the video capability and you will see the data usage climb even further."

Madhusmita Bora can be reached at mbora@sptimes.com