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More Than Half of High-Tech Households Subscribing to an Internet-Based Phone Service Have Disconnected Their Traditional Landline Phone, According to Telephia

Posted on: Monday, 19 September 2005, 09:00 CDT

Domestic Call Savings and Integration of Communication Services

Drive Consumer Interest in Internet Telephony

Telephia, the leading provider of performance measurement information to the mobile industry, reveals that Internet-based telephone service or Internet telephony is replacing traditional landline phone service. Fifty-three percent of high-tech households subscribing to Internet telephony have completely replaced and disconnected their landline phones. Internet telephony is a technology that allows consumers to place telephone calls over the Internet.

According to the Telephia Emerging Personal Communications Options (EPCO) survey, when asked what the primary reasons were for subscribing or having interest in Internet-based telephone service, 59 percent of high-tech households surveyed said savings on calls within the United States was the top factor in making the switch. Among high-tech households surveyed who showed interest in adopting Internet telephony, but have not subscribed to a service, 30 percent noted that bundled package deals were a key reason for their interest. For these 'intenders,' interconnectivity across different communication services was also important, with seventeen percent citing the ability to use any device as a big attraction. Fifteen percent noted the ability to switch between telephone networks while 11 percent mentioned caller ID on TV as additional reasons for interest.

"Cost savings and seamless integration of different communication services provide a compelling one-two punch for Internet telephony," said Kanishka Agarwal, Vice President of New Products, Telephia. "As technologies evolve and consumers are able to use their services across their mobile devices, as well as their TVs and home computers, IP-based services will deliver big returns to the service providers."

Forty-three percent of high-tech households who continue to use traditional landline phone services, but are interested in adopting Internet-based telephone service, said that availability during a power outage was a reason for not replacing their landline phone service (see Table 1). More than one-third of the respondents also felt that keeping their current phone number was an important reason to stay with their current landline phone, while 31 percent mentioned the ability for 911 to locate the caller in an emergency prevents them from making the switch. Table 1: Reasons Consumers Do Not Replace Landline Phone Service with Internet-based Phone Service Percent Why Consumers Do Not Replace Wired Phone Service with VoIP Share Availability during power outage 43% Wanted to keep my current phone number 34% Ability for 911 to locate me in an emergency 31% Limited amount of savings over current provider 28% Uncertainty about how to establish a line 23% Equipment Expense 22% Call Quality 21% Computer Instability 19% Security/Privacy 16% Company instability 11% High Speed Internet connection is unavailable in my area 6% Other 10% Source: Telephia EPCO Survey, Q2 2005 (1) Note: Respondents in the EPCO survey were asked about "Internet-based telephone service (VoIP)" to capture their preferences around Internet telephony. In Table 1, respondents were asked to choose up to three reasons for not replacing landline phone service with Internet telephony. (2) Note: High-tech households are identified as those who currently subscribe to at least three bundled or emerging services (e.g., wireless data, video-on-demand, Internet-based telephony, satellite radio, broadband, DVR, etc.), or expressed an intent to purchase four or more services.

The Telephia Emerging Personal Communications Options (EPCO) Survey aims to understand the attitudes of high-tech households towards emerging services and bundled offerings, providing integrated insights into household use and preferences across emerging converged landline and wireless phone, Internet telephony, Internet and TV services. Conducted in Q2 2005, the survey consisted of a panel of 23,000 household decision-makers, providing key metrics at the local level including share-of-households, share-of-wallet, awareness, interest, and intent-to-purchase. Detailed findings on 6,500 high-tech households revealed additional insight into customer preferences around emerging services like Internet telephony and bundled offerings.

About Telephia

Founded in 1999, Telephia provides syndicated performance measurement information to the leaders of the mobile industry. Telephia serves more than 50 mobile industry clients, including carriers, device manufactures, content and application providers, retailers, infrastructure vendors and investment analysts. Telephia is the industry standard measure of subscriber share, customer satisfaction, device share, network quality, revenue share, advertising effectiveness, content audience and many other key performance indicators. Telephia helps clients use information to drive superior business results by providing high-quality measurement products and integrated analysis.

For further information, please visit our website at www.telephia.com or call 415-395-0500.

Sourcing guidelines: All Telephia charts, data tables and analysis must be cited as, "Source: Telephia Audience Metrics" or "According to Telephia ..."

Source: Business Wire

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