Sunday, August 05, 2012

Fixed line decline: real but over-stated

This post arises because of a Twitter conversation, in which people were speculating about whether political polls have become skewed because of the decline in the landline. If the pollster can’t call you, you’re left out of the sample, and there’s so many no-landline homes now it must destroy the accuracy of the poll, right?

Wrong, I suspect.

Because it’s a Sunday morning, and because nobody’s paying for this, I don’t propose even trying to start crunching the numbers. But I believe that the “landline decline” is frequently overstated. So here are some thoughts on the factors that are left out of the story.

Telstra’s PSTN decline

There has been a fairly dramatic loss of basic PSTN services revealed in a decade’s worth of Telstra annual reports – but that’s not a reliable guide to the number of “no home phone” households. Most of the services disconnected since 2002 represent the consolidation of multiple lines down to a single service. The drivers for this are outlined below.

Broadband – once ADSL became widely available, nobody needed a second line for dial-up Internet any more. That drove a five-year drift in the number of services, starting about 2001-2002.

Faxes – there are still more fax machines out there than the people think, but they have been declining steadily for a decade. A business that disconnects a dedicated fax line contributes to the loss of basic PSTN services.

Business IP telephony – SMEs routinely bought multiple incoming phone lines (I suppose many still do). However, each time a business buys a data service connecting to its IP telephony server, it eliminates an unknown number of individual PSTN services.

Naked DSL – if someone abandons their Telstra landline service and buys a naked ADSL and home phone combo from iiNet, TPG or whoever, they fall out of the Telstra data. However: they might still have a phone number visible to the PSTN.

Cable telephone services – Consumers who connect a PSTN phone to their (say) Optus HFC service don’t count as using a basic telephone service, so there’s a few hundred thousand services that are often forgotten by analysts prepping numbers for the media.

The Naked DSL and HFC services exemplify another difficulty: if you have no Telstra fixed line service, but you do have a PSTN-visible phone number, how should you be counted?

With all of these factors coinciding, it’s quite feasible that Telstra could shed a couple of million basic PSTN services without a single household opting to abandon the fixed phone completely.

The all-mobile individual

Most surveys I have seen identify all-mobile individuals – and there’s a fundamental problem with using this to estimate the number of households without a PSTN service: the individual isn’t the household.

It’s quite feasible for someone to say “I don’t use a fixed line” while still living in a home that has a fixed line – because they’re not the person paying the bill. This is especially true in a world in which young adults no longer leave home at the first opportunity.

The reason I can’t be bothered properly crunching the numbers on a Sunday morning should now be clear: anyone who wants to work this out properly needs a week or a month.

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