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Wireless vs. Wireline for Voice Services Forecasts and Impacts Third Edition Ray L. Hodges & Lawrence K. Vanston Description Key findings Who should read in this report? Table of contents Exhibits Pricing/Ordering information

Description  [back to top]

This new report from Technology Futures provides an update to our 1993 and 1995 forecasts of growth in cellular/PCS subscribers and usage and their impact on the wireline operations of local exchange carriers.

To date, cellular service has primarily been a complementary service to wireline service in North America. This is expected to change as the new PCS providers bring ample capacity online to compete directly with the local exchange carriers, first for usage and ultimately for access. Some competition will come without apparent deliberate effort by wireless providers -- customers will simply use their wireless phones more at the expense of wireline.

The business case for competition with wireline is simple. Major wireless providers and any number of resellers and small providers will have digital technology, which will increase capacity, battery life, and quality -- at lower costs. More capacity, falling costs, and more competitors will result in lower prices -- which inevitably will result in more customers and higher usage. With more wireless customers and lower prices, usage and ultimately access will be diverted from wireline.

This comprehensive report:

• Analyzes the competitive threat to the local exchange carriers from the wireless alternative for voice communications.
• Reports the competitive threats in terms of key variables, including access lines lost and message and non-message revenue lost.
• Gives a view of the industry trends for the next 10 years and longer, including wireless subscribership and price.
• Includes TFI's latest life estimates of the LEC copper distribution infrastructure.

Key Findings From This Latest TFI Report  [back to top]

• 25% of LEC voice access lines could be lost by 2005; however, these market losses can be balanced by gains in data access lines.
• 50% of LEC usage-sensitive revenues may be lost by 2005 and are less likely to be made up for by data services.

Wireless vs. Wireline for Voice Services analyzes and forecasts:

• Wireless Access & Usage Growth
• Wireless & Wireline Price Trends
• Wireline Data Access Growth
• Wireless & Wireline Revenues

Who should read this report  [back to top]

• Local Exchange Carriers
• Competitive LECs
• Cellular Carriers
• PCS Carriers
• Wireless Suppliers
• Interexchange Carriers

Table of Contents  [back to top]

Chapter One: Introduction and Summary

 

Chapter Two: Cellular/PCS Subscriber and Price Forecasts

Cellular/PCS Subscriber Demand

Cellular/PCS Prices

Chapter Three: Competitive Impacts on the Wireline Network

Cellular/PCS Impact on Wireline Voice Minutes-of-Use

Cellular/PCS Impact on Wireline Access Lines

Cellular/PCS Impact on Wireline Revenue

Chapter Four: Impacts of Wireline Cash Flows on Depreciation Lives

Impact on Wireline Depreciation Lives

Summary

Appendix: Forecasts for Wireline Data Users

List of Exhibits  [back to top]

2.1	Exhibit U.S. Cellular/PCS Subscribers -- Percentage of U.S. Population Age 15 and Older
2.2	U.S. Cellular/PCS Subscribers
2.3	U.S. Cellular/PCS Subscribers (table)
2.4	Monthly Price for Cellular/PCS Service (250 Minutes)
2.5	Cellular/PCS Prices
3.1	Basic Model of Wireless/Wireline Competition
3.2	Cellular/PCS Penetration and the Percentage of Wireline Minutes by Customers
3.3A	Relationship Between Cellular/PCS Price and Remaining Wireline Minutes from Cellular/PCS Customers -- Unadjusted
3.3B	Relationship Between Cellular/PCS Price and Remaining Wireline Minutes from Cellular/PCS Customers
3.4	Cellular/PCS Impacts on Wireline Voice Usage
3.5	Wireline Voice Usage and Access Lines Remaining from Cellular/PCS Customers
3.6	Relationship Between Lost Minutes and Lost Access Lines
3.7	Cellular/PCS Impacts on Wireline Access Lines
3.8	Forecasting Logic -- Number of Wireline Access Lines
3.9	LEC Wireline Access Lines
3.10	Cellular/PCS Impacts on Wireline Revenue
3.11	Logic for Voice Usage Revenue Model
3.12	Voice Usage Revenue Remaining from Cellular/PCS Customers
3.13	Total Base Revenue Remaining
4.1	Wireline Cash Flow Projections
4.2	Wireline Cash Flow Depreciation Model
4.3	Cash Flow-Based Depreciation Model -- Percentage of Base Surviving
A.1	Wireline Data Users

Pricing Information  [back to top]

July 1998, 41 pages, Sponsored by the TTFG, ISBN 1-884154-10-7

US $45 Electronic Delivery

US $45 Hard Copy Mail Delivery

US $45 Hard Copy Mail Delivery Outside US, Canada

Texas residents add 7.25% (Austin, Texas 8.25%) sales tax.
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