Dear Editor,
I read with interest your article on April 1 titled, “Research claims wireless not major threat to wireline,” and wanted to share some thoughts on a couple of points.
When the Phoenix Center claims that “Consumers do not generally consider wireless a good enough substitute for wireline,” they are probably comparing service on a mobile phone to traditional fixed-line service. But wireless phone service is not limited to mobile phones. Wireless service from your favorite wireless carrier is available as a fixed service using the existing telephone wiring in your home and existing telephone devices-even cordless phones and fax machines.
Consumers are, in fact, starting to learn that wireless is an acceptable substitute for wireline service, when you’re using a fixed-cellular terminal as opposed to a mobile phone. With a high-gain fixed antenna and a reliable power source, you don’t experience the fading and dropouts that plague mobile communications. By using a fixed-cellular terminal with ordinary telephone equipment, one quickly learns that many of the voice quality issues associated with mobile-phone service are the result of acoustic tradeoffs made to squeeze a telephone into a tiny mobile package using a tiny battery.
The remaining issue is cost. Cost analysis conducted by Telular in the Chicago area in January showed savings of at least $20 per month with a bundled wireless plan. A study conducted by PriMetrica in November 2003 indicated that between 42 percent and 58 percent of U.S. households would be willing to pay $50 per month for an all-wireless package and completely drop their fixed-line service.
I also take issue with the Phoenix Center’s findings that the structure of the wireless industry “abates the potential for meaningful intermodal competition.” The article notes that the major wireless carriers, including Verizon Wireless, Sprint PCS and Cingular Wireless, are owned by wireline incumbents.
Telular is in discussions with major wireless carriers, including those owned by wireline incumbents, about rolling out wireline replacement programs. These carriers understand that if they want to retain customers, they need to provide competitive service even if that does mean siphoning away minutes from their wireline parent companies. As a result, wireline incumbents are being forced to lower rates or bundle services in order to survive. In fact, the president of SBC Illinois recently credited competition from wireless phones for lowering rates to consumers. If that’s not meaningful competition, I’m not sure what is. In contrast to the Phoenix Center report, I believe wireline replacement is a real and current threat to established wireline businesses because of the significant benefits it offers consumers.
Jeffrey M. Krevitt
Telular Corp.
