Thursday, December 3, 2015

2016 Might be the Year Half of U.S. Households are "Mobile Only"

Some trends--such as abandonment of fixed network voice connections--has happened in slow motion, which has a useful thing for service providers coping with the negative trends.

More than 47 percent of U.S. homes were “mobile only” for voice service in the first half of 2015, up 3.4 percentage points since the first half of 2014, according to the U.S. National Center for Health Statistics.

At current growth rates, it is conceivable that half of U.S. homes will have "cut the cord" by the end of 2016.

Fully 71 percent of  adults aged 25 to 29, and 68 percent of adults 30 to 34 were mobile mobile only.

In the 18 to 24 bracket, 59 percent are mobile only, while in the 35 to 44 age bracket, 57 percent were mobile only.

In the 45 to 64 age cohort, 41 percent were mobile only and even in the 65 or older cohort some 19 percent were mobile only.

Perhaps the only unanswered question is whether such behaviors will change as younger cohorts age. Once upon a time, some observers argued that younger consumers who did not buy cable TV subscriptions would do so as they got older and had children.

There is less certainty about that change, anymore. So it is unclear whether present habits will change as younger consumers get older.

Also, fully 85 percent of adults living only with unrelated adult roommates were mobile only. And 67 percent of renters were mobile only. Some 37 percent of homeowners also were mobile only.

As you might also guess, 59 percent of adults living in poverty and 54 percent of adults living in near poverty were mobile only. But even 46 percent of higher income adults were mobile only.

One might argue that, were it not for triple play packages, fixed network voice adoption would be even lower than it is.

The good news is that the steady and long-standing declining trend has occurred so predictably slowly that service providers have had time to create replacement revenue streams, an effort that continues as the remaining “legacy services (entertainment video and high speed access) remain under pressure.

The former suffers from declining demand, the latter from higher levels of competition, despite a slow upward trend in revenues primarily driven by a shift of demand to higher-speed services.

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