Wired Broadband Going the Way of the Landline?

According to Parks Associates, 10% of U.S. broadband households are likely to cancel their fixed broadband service over the next 12 months ...

OTT Churn Rate Holds Steady at 19%
OTT Churn Rate Holds Steady at 19%

According to Parks Associates, 10% of U.S. broadband households are likely to cancel their fixed broadband service over the next 12 months. The research house says these consumers would use wireless or mobile data services as a replacement for their traditional broadband service. The trend is an extension of the current migration away from fixed-line telephone services in favor of cellular, with 8% of U.S. broadband households planning to cancel this service in the next 12 months. Currently 51% of U.S. broadband households have fixed-line phone service.

"The diminishing use of fixed-line voice services may foreshadow the decline of fixed-broadband Internet services as the mobile data capabilities of smartphones increase and mobile carriers in the U.S. re-introduce their unlimited data plans," said Harry Wang, Parks' senior director of research. "Not surprisingly, younger consumers are more likely to go completely mobile for their Internet needs; 15% of heads-of-household ages 25-34 are likely to cancel their fixed broadband service in the next 12 months."

Parks says a growing number of value-added mobile services, such as T-Mobile's zero-rated HD video streaming offer, AT&T's zero-rated DirecTV Now service, Sprint's Amazon Prime service, or Verizon's Go90 video service, may have emboldened broadband cord-cutters.

"Subscribers to value-added mobile data services are substantially more likely to cancel their fixed broadband service," Wang said. "This suggests that the use of a mobile phone for entertainment purposes contributes to the consumer perception that they can substitute mobile for fixed-data service with little or no pain."

Other findings indicate:

  • Subscribers who use larger amounts of 3G, 4G or LTE data are slightly more likely to cancel their broadband service.
  • Upcoming movers are substantially more likely to cancel their broadband service because of mobile data services.

"For frequent movers, mobile data services offer greater convenience as these consumers don't have to repeatedly subscribe to and cancel fixed-line services," Wang said. "Mobile carriers could target these consumers in particular with value-added services that make it easier for them to secure a full complement of services even as they change addresses."

More in Wireless