Oct 25, 2004 (12:10 PM EDT)
Consumers Dropping Fixed-Line Phones, Says Nokia Study

Read the Original Article at InformationWeek

Upwards of 45 million consumers in the United States, Great Britain, Germany and South Korea now make all their voice calls from their mobile phone, and this substitution of fixed lines for mobile service is a consumer trend. That's the topline conclusion of a research study that also says consumers think mobile service could challenge fixed-line connections for data access in the home, too.

The study, released last week, was based on consumer market research conducted in the four countries for Nokia, the mobile telephony manufacturer.

People interviewed for the study who said they are certain or very likely to adopt a wireless service for data expect this to happen in 1 to 2 years. Interest is greatest among the young and those who already have broadband Internet access at home.

The landline remains the connection of choice for longer calls from the home, says the study, Among the rationales cited motivation for maintaining a landline subscription focused on price perceptions. For example, 69 percent of respondents in Britain considered cost to be the key reason for choosing fixed calls ahead of mobile calls, more than any other country. But, the need for a landline for data and greater perceived reliability of the landline phone are important criteria in the minds of US and German consumers.

In many instances respondents were unaware of the actual price differential between their landline and mobile phone. Several anticipated that, on comparing the total cost of their mobile subscription with the overall cost of their landline subscription, the price differential would be minimal and might actually favour the mobile.

Emotional reasons to keep a landline phone exert a strong force on consumers, especially the association of the landline phone with the home and the "cosiness" of the call experience, said the study.

Respondents generally indicated they felt the future would inevitably be wireless. The perception was that wireless technology will improve, the quality and reliability issues will become less important and that data will be available through a wireless network for home Internet users. For these reasons the perceived value of the landline subscription is decreasing.

A significant number, in particular in South Korea, say they would not take out a landline subscription if they moved from their current house or apartment. The South Koreans in the study made the highest proportion of their voice calls from mobile phones -- some 65 percent of the respondents said they make all or most of their voice calls from a mobile phone.

There are other demographic differences, as well. Women, for example, are more likely to use landlines for the majority of their calls. Two groups can be identified: those who predominantly used landlines rather than mobiles were more likely to be women 35 or over and homeowners. Those who use landlines exclusively were more likely to be women over 50.

Young professionals are most likely to substitute mobile service for a fixed-line phone. This group, who use their mobile phone for most of their voice calls, are more likely to be male, middle- to high-income, and make a high volume of voice calls.

The study, designed to provide consumer behaviour data, was conducted earlier this year for Nokia by MORI, a British market and public opinion research agency.