Ma Bell and Its Vanishing Phone Lines

Three years ago, the wireline revenues of U.S. phone companies were forecast to decline about 3.3 percent annually through 2009. Talk about underestimating those numbers — take a look at the following graph and you see that AT&T’s (s T) consumer line business is evaporating faster than raindrops in the Sahara.


Roughly a year later, I pointed out that the phone companies would always be in a race against time — the more lines they lost, the less chance they’d have to able to convert their customers to faster broadband.

That is indeed a problem that continues to haunt the incumbent carriers — across the board. Cable companies have done a good job of snatching voice customers. Many, like me, have switched entirely to wireless. The down economy has only exacerbated these issues.

Verizon (s VZ) has countered with a better broadband proposition in the form of fiber and a better wireless network. It’s also getting rid of its wireline business as quickly as it can, fetching as much cash as possible for a business that is going nowhere fast.

In comparison, AT&T’s problems are reflected in the fact that it now likes to present itself as a “wireless company.” That’s the same line Sprint (s S) used to use before it got rid of Embarq.

What I find more surprising is that AT&T is slowing down its U-verse rollout. From the looks of it, people actually like this product (mostly because they hate their cable companies) and want Ma Bell to offer this higher-speed broadband and IPTV package. Heck, even I would sign up for AT&T U-verse…if it were available in my neighborhood, that is.