Landline Declines Flummox Phone Companies

Verizon has suffered such a sharp decline in its landline division it is considering drastic measures to preserve its market share.

The company could offer a plan that would cost customers $5 per month - at least that's what was reported last week in the Wall Street Journal.

"That was a bit premature," said Verizon spokesman Bob Elek of the story. "But it is an option being considered by many."

The company lost 3.7 million access lines in 2008, which translated to 9.3 percent of its base, Elek confirmed.

AT&T is the primary landline provider in Hernando County. Company spokeswoman Gretchen Schultz would not give any statistics, but conceded the gains in the wireless division were critical in making up the landline losses.

"Growth in these areas more than offset expected economic pressures primarily reflected in lower wireline voice revenues," she said.

There are several reasons as to why the landline market is in a freefall - the younger generation's preference and reliance on wireless devices and the added competition among cable providers.

Bright House Networks, DISH Network, Vonage and Direct TV all offer digital phone service, which includes unlimited long distance. As a result, the costs to the consumer have been driven down considerably.

Verizon and AT&T joined the cable and satellite companies when they introduced their FiOS and U-verse packages.

"We saw this coming," said Elek. "It's pretty well known when there is more competition, you're going to suffer losses ... What we experienced in 2008 was the same as what we experienced in 2007."

While the number of landline phones has gone down, the revenue amount per customer has increased, thanks to the "bundled services" offered by Verizon. The average jumped from $56.01 to $68.46 from 2007 to 2008, Elek said.

The FiOS package is available in Pasco and Hillsborough counties, but not Hernando County. There are no immediate plans to make it available.

Landline phones always will make up a large piece of the market, Schultz said.

"You find some people, possibly those who are constantly on the go, choose only to have a wireless phone," she said. "Others choose to have a landline phone, perhaps (because) they run a business out of the home or they have a family and want the security a landline brings."

AT&T remains the nation's leading local and long distance phone provider, according to its Web site.