Landline free homes increasingly young, upscale

Landline free homes increasingly young, upscale
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October 14, 2004 After years of coexistence between cells and landlines, cellphones have recently begun to contribute to the desertion of the landline service according to research from the United States.According to a new analysis from Mediamark Research Inc. (MRI), 8.1% of U.S. households do not have landline telephones, up sharply from just 4.2% in the spring of 2000.

In the not-too-distant past, non-landline consumers simply didn't have a phone at all, and research showed the characteristics to be downmarket, indicating that the decision to avoid telephony was a financial decision.

The make-up of this segment is changing. The non-landline consumers of 2004 are increasingly younger and more upscale, according to MRI. In the spring of 2000, the median age for the non-landline population was 23% below that of the general adult population. By the spring of 2004, it was 30% lower.

Meanwhile, the median household income for the non-landline population rose from 63% below that of the general population to 49% below. And the college graduation rate for non-landline consumers has more than quadrupled, to 11.8%.

Cellphone Growth

When MRI began to measure cellphones in 2001, one or more cellphones were in 51.6% of U.S. households. However, despite such widespread use of cellular technology, only 1.4% of households were "cell-only," meaning that no landline phone was present.

Since 2001, cellphones have continued to proliferate: according to the 2004 MRI study, 68.9% of households have at least one cellphone, up from 63.8% in spring 2003. Most households (63.1%) have both a cellphone and a landline, and only 28.6% of households are using landlines exclusively.

The percentage of cell-only households has risen nearly fourfold in just three years, from 1.4% in spring 2001 to 5.5% in spring 2004. Cell-only households now account for 69% of all households without landline phones, compared to 30% in spring 2001.

Of the 8.1% of U.S. households that do not have landlines, more than 3 in 10 (31%) are truly "phoneless," having neither a cell nor a landline, down from 70% in spring 2001. Since cell-only households have significantly higher incomes than phoneless households (median HHI $32,948 v. $16,058), and since cell-only consumers are younger (median age 28.8 v. 38.7), it's clear that the growth of the cell-only segment explains the recent tilts in the profile of the non-landline population.

Households Without Landlines Cell-only Profile

MRI research shows that young males are often early adopters of new technologies; and the data indicate that, under the right conditions, they can also be "early deserters" of old technologies. While males represent 48.0% of the total adult population, they account for 57.6% of the cell-only population. If the traditional patterns hold, these young males may be the leading edge of a larger, more mainstream group of cell-only consumers.

A full 7.9% of single-person households are now cell-only, compared to 5.5% of households in general. More to the point, 16.7% of single-person households in which a cellphone exists are now cell-only.

According to the 2004 spring MRI study, in at least 26.3% of U.S. households (up from 15.3% in spring 2001), the number of cell phones is equal to or greater than the number of household members (the percentage is likely higher, but MRI currently caps the maximum number of cellphones in its survey at "3 or more"). Such households account for 56.6% of cell-only households; they are more than twice as likely as households in general to be cell-only. While 88% of them still have landline phones, that percentage is down 3.1% from a year ago.

Future Growth

MRI data show that the percentage of households with cellphones is still rising, as is the percentage of households with multiple cellphones. Young, tech-savvy consumers-particularly those who live in single-person households-are abandoning fixed, landline phones in favor of a new cell-only lifestyle.

All indicators point to continued increases in the cell-only population. Whether or not the current advantages of landline phone service, such as clarity, reliability, and data use (fax machines, DSL and dial-up Internet) will be addressed adequately by advancements in cellphone technology will be crucial for establishing a ceiling to the trend.

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