The real estate slump in the United States has foreclosures and evictions occurring faster than ever before. These, in turn, are accelerating changes in the way people use telephone service.
These days, home telephone service is just for those who have a permanent home. The hours of administrative hurdles and $100 installation fee that go with establishing a wireline, also called a land line, usually make economic sense only if you plan to stay in the same place for years. When you are not sure of your plans, it makes more sense to rely on a wireless service and other forms of telecommunications.
The real estate slump is affecting both homeowners and renters. Politicians have been talking a lot this year about homeowners losing their homes in foreclosure, but according to the people who keep track of such things, at least as many tenants are being evicted as real estate owners get squeezed. For many tenants, there is no advance warning that the eviction notice is coming, so they have to move with little time to plan anything. This almost always means moving somewhere temporarily, and with all the costs of moving, a new wireline may be out of the question. This is one scenario by which millions of people have given up their wireline service this year.
In the third quarter, according to its report issued Monday, Verizon added 1.5 million wireless subscribers while losing 1.2 million wireline customers. These numbers are larger than industry observers had expected but make sense when you consider the effect of foreclosures and evictions.
The accelerating decline in wireline service also led to a merger this week, with CenturyTel acquiring Embarq (the spinoff of Sprint’s wireline business) in a stock swap. Both companies were profitable before the merger, but want to cut costs as the volume of business declines.
There was already a trend from wireline to wireless, and the turmoil in real estate is just making some of the transition happen sooner. This is in keeping with evolutionary theory, which holds that the most rapid change occurs in times of high stress.