Tuesday, August 31, 2010

Verizon Encourages Mobile Substitution, in Some Markets

You might it a bit jarring to see Verizon encouraging customers to replace their landline phone service with mobile service. But there's a good explanation. Verizon operates landline networks in only part of the country. It operates wireless networks nationwide.

So Verizon actually gains if it can convince a landline voice customer outside its wired network service area to switch to the Verizon wireless service. Sprint and T-Mobile USA have an even-easier position. Since neither firm owns any fixed access network assets, both firms likewise can encourage wireless substitution without risking any cannibalization of existing revenues or customer base.

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