Why are phone companies so keen on establishing service tiers for Internet data delivery? Some new data from TeleGeography provides a window into what's happening in their core business of landline telephone service.
The analysis by TeleGeography estimates that U.S. Regional Bell Operating Companies (RBBOCs) have been losing 150,000 subscriber lines per month so far this year, while Voice over IP (VoIP) service providers are adding about 100,000 subscribers per month. The balance of local service subscription losses - about 50,000 per month - are moving to wireless-only plans or canceling their secondary household lines.
TeleGeography predicts that VoIP service providers will capture 22 percent of all local exchange carriers' existing customers, contributing to a cumulative loss of $18.2 billion in local service revenues between 2006 and 2010. Loss of revenues from access charges and consumer long-distance services will result in several billions of dollars of additional damage to traditional telephone service providers. TeleGeography's analysis is based on data from its new U.S. VoIP Research Service.