New Wireline Number Portability Rules Will Double The Number Of Households Dropping Traditional Phone Service for Wireless, According to Advanis Report.

Business Editors

EDMONTON, Toronto--(BUSINESS WIRE)--Jan. 14, 2004

Study Reveals 6 Million Households Will Displace Their Wireline

Service over the Next Two Years

New FCC-mandated rules that allow telephone numbers to be ported between wireline and wireless service will directly result in the displacement of 2 million wirelines by 2007, according to a report released today by Advanis. In all, 6 million U.S. households are likely to give up their wireline service over the next two years.

The report, based on a survey of 1000 household decision makers, explores the impacts of wireline number portability on both the wireline and wireless telephony markets.

"Local number portability makes it easier for those households that have already thought about it, to go ahead and cut the cord," says Dave Cosgrave, a Managing Analyst with Advanis and author of the report. "If LNP is implemented quickly and smoothly between wireline and wireless carriers - a big 'if' given what has happened so far with wireless to wireless portability - the historical rate of wireline displacement will likely double."

Still, the report points out that the majority of households remain unwilling to even consider displacing their wireline service, despite widespread awareness of LNP. They cite numerous reasons for keeping their regular phone service, such as concerns about call quality and reliability, and a reliance on wirelines for dial-up Internet and other services. Age, income, and prior wireless experience are also factors - older households with no wireless phone service are the least likely to consider giving up their wirelines.

While clearly a problem for wireline operators, the report cautions that wireline displacement is not necessarily a boon to the wireless industry either. The good news for wireless operators is that they won't have to match the wireline value proposition of unlimited calling for $42 per month to compete for high value customers. The bad news is that for every 100 wirelines displaced, the wireless industry may only gain 30 net-new subscribers. The rest will transfer their home numbers to an existing service, or, if they can get a better deal, replace an existing wireless service. The net result could be even more churn for the wireless industry, particularly if there is aggressive price competition for existing wireline business.

About this report:

Mobile Metrics: Wireline to Wireless Displacement Study is based on a telephone survey of 1000 randomly selected U.S. households in the top 100 Metropolitan Statistical Areas. It is part of Advanis' ongoing wireless and mobility research program, Mobile Metrics.

For more information on the contents of this report, please contact:

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t. 1.866.763.9224 x 4204

About Advanis:

Advanis is a marketing research and consulting services firm with over a decade of experience in the telecommunications, technology, and financial services sectors. The Advanis mission is to help organizations take the guesswork out of critical and complex business decisions, through fact based insight and advice.