Data demand soars as consumers drop landline phones


Data demand soars as consumers drop landline phones

Ohio wireless by the numbers

90 - Percentage of Ohio residents with a wireless phone

80 - Average monthly wireless bill, in dollars

50 - Percentage of Ohio residents who own a smartphone that connects wirelessly to the Internet

41.3 - Percentage of Ohio homes that are wireless-only

40 - Additional monthly cost per phone for Internet access, in dollars

Source: Ohio Telecom Association

Demand for mobile and broadband data in Ohio is skyrocketing as more consumers switch from traditional landline phones to wireless communications.

Ohio’s local phone companies have lost 64 percent of their lines since peaking in 2000, and continue to lose lines at a rate of 6 to 10 percent annually, according to a new Ohio Telecom Association report. Those companies range from large service providers such as AT&T Ohio and Cincinnati Bell, with 50,000 or more phone lines, to small locally owned and operated companies with 300 to 25,000 lines.

Experts said the migration to smartphones is forcing phone line companies to diversify into new technologies such as wireless, video and broadband. It also is requiring companies that include large wireless providers to invest billions of dollars to update their networks to meet rising demand for data.

The study found that Ohio’s 11.5 million residents are using an estimated 11.8 million wireless phones, with an increasing number using different phones for home and work.

“As much as the landline market is decreasing, the broadband market is exponentially increasing,” said Stu Johnson, executive director of Connect Ohio, a nonprofit working to expand access and use of broadband Internet statewide. The challenge for telecommunications companies is to manage the transition financially while coordinating the delivery of reliable service to consumers, he said.

The average household consumes 52 gigabytes of data per month — the equivalent of more than 5 million emails or surfing the Internet for about 100 hours monthly — up from 28 GB in 2012. Part of that increase is driven by smartphones, which now account for half of all cell phones in Ohio.

“When you almost double the amount of data over your network in a year, that is a significant issue to engineer,” said Charles R. Moses, Ohio Telecom Association president. The trade group represents the state’s $20 billion telecommunications industry, which includes 42 local phone companies, three wireless carriers and more than 100 associated industry product and service providers.

Officials said the association’s member companies employ more than 20,000 Ohio residents and invest an average of $1 billion annually in the state’s telecommunications infrastructure.

Copper-wire landlines don’t offer multiple uses like broadband — an optic fiber, coaxial cable or wireless medium that has wide bandwidth characteristics and can deliver voice, video and Internet services. However, copper landlines are reliable and can serve customers in rural areas that are costly or difficult to reach with broadband technologies, Johnson said.

Ohio’s wireless-only residents are 81 percent urban or suburban; 84 percent are under age 44; 58 percent have a college education; and 63 percent earn more than $25,000 annually, according to Connect Ohio.

“The least likely to convert to a wireless-only solution would be an older, rural, less educated, lower income individual,” Johnson said. “Those are probably also the most expensive copper customers.”

Federal regulations require local phone companies to supply and maintain a phone line to every residence, business or organization that requests one.

Copper landlines also deliver services that include home health care monitoring, ATM networks and elevator emergency telephones that won’t easily transition to wireless, Johnson said.

The Department of Defense in a July 8 letter to the Federal Communications Commission warned that a rush to transition from copper landlines to wireless and Internet protocol (IP) broadband communications could disrupt the functions of important military and federal agencies, including Federal Aviation Authority air traffic communications.

These agencies continue to rely on wireline networks and services that are “critical to public safety and security — and will do so for the foreseeable future,” wrote Terrance A. Spann, general attorney for the U.S. Army Legal Services Agency.

Wireless is now a $6.8 billion industry in Ohio, according to the Ohio Telecom Association. An estimated 41.3 percent of homes in the state have eliminated local phone service and rely exclusively on wireless communications. Data plans account for 50 percent of wireless revenues.

Last week, AT&T expanded its 4G LTE (fourth generation long-term evolution) wireless network to the Dayton region to provide area customers with greater mobile Internet speeds. Verizon Wireless launched a 4G LTE network in Dayton in June 2011.

Verizon Wireless has seen “geometric growth” in wireless data demand, said Don Caretta, executive director for Verizon’s network in Ohio, West Virginia and Pennsylvania. The company has invested more than $2.5 billion in its Ohio wireless network from 2001 through 2012 to increase capacity to meet demand, he said.

New wireless applications from online movie services to so-called “smart” electric and gas meters will continue to grow data demand, Caretta said.

Similarly, AT&T has invested $1.5 billion from 2010 to 2012 into its Ohio wireline and wireless networks, said Mark Romito, the company’s director of external affairs for southwest Ohio.

In November, AT&T announced a $14 billion project to upgrade much of its wireline network to high-speed IP broadband and convert some of its harder-to-reach copper customers to 4G LTE wireless services by the end of 2015. “We are trying to address customers’ demand for data and the transition to an IP environment,” Romito said.

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