BOSTON-New all-inclusive wireless rate plans are signalling the beginning of landline
replacement, according to the third in a series of pricing studies conducted by the Yankee Group.
Wireless rates
have dropped an average of 40 percent between early 1995 and the third quarter of 1998, triggering average per-month
usage levels of 300 minutes to 400 minutes for digital cellular and personal communications services, said the report.
That is more than triple the historic industry average usage of 100 minutes per month.
Average monthly landline
usage is about 1,000 minutes per month, said the report.
“Landline displacement stories are becoming more
than an occasional anecdote, as these roam-and long-distance-free price plans compare quite favorably to some pay
phone, calling card and even landline intraLATA long-distance rates-especially considering the added convenience of
mobility,” said Mark Lowenstein, senior vice president at the Yankee Group, Boston.
The Yankee Group
predicts displacement from wireline to wireless begins to occur when the wireless to wireline price ratio is 3-to-1 or
less.
In order to benchmark wireless to wireline pricing, the Yankee Group modified its pricing model to compare
the all-inclusive and standard wireless rate plans to local and long-distance wireline rates in eight U.S.
cities.
Landline migrations begin between 500 and 750 minutes of use for users on all-inclusive plans, said the
study. Displacement also can occur at even lower usage levels, such as when wireless long-distance usage is high or
when subscribers make use of the large home calling areas for wireless compared with wireline service.
