Cellphone spending likely to exceed wired lines

2007 is likely to be the first calendar year in which US households spend more on cellphone services than on landline telecommunications. The most recent government data show that households spent $524, on average, on cellphone bills in 2006, compared with $542 for residential and pay-phone services. By now, though, consumers almost certainly spend more on their cell phone bills, several telecom industry analysts and officials said.

"There's a huge move of people giving up their land line service altogether and using cellphones exclusively," said Allyn Hall, consumer research director for market research firm In-Stat.

As recently as 2001, US households spent three times as much on residential phone services as they did on cellphones. But the expansion of wireless networks has made cellphones more convenient, and a wider menu of services, including text messaging, video and music, has made it easier for consumers to spend money with a cellphone.

When corporate cellphone use is counted, overall US spending surpassed land line spending several years ago. While there are roughly 170 million land lines in use nationwide, industry officials estimate there are close to 250 million cell phones. (These figures include residential and corporate use.)

Eric Rabe, senior vice president for media relations at Verizon, said the company's wireless revenue has grown between 15 percent and 20 percent annually for the last five years, whereas its traditional land line business has been flat year to year, in large part because more than 90 percent of US households already have them.

"As a company that once made the vast, vast majority of its revenue on phone calls, for 10 years we've been moving away from that and trying to re-establish ourselves in other businesses because we could see the traditional telephone was a mature business, it was not going to grow and indeed might even shrink," he said. (info from The Associated Press)