Fixed Mobile Substitution and Voice over Wi-Fi

Getting rid of your land-line phone and relying on your cell phone instead is called Fixed Mobile Substitution (FMS).

A report from the National Center for Health Statistics of the Centers for Disease Control (CDC) shows a linear increase in the number of households that have a cell phone but no land-line, starting at 4.4% in 2004 and reaching 16.1% in the first half of 2008.
US Fixed Mobile Substitution 2005-2008 - source: CDC

These numbers match those in a recent Nielsen report on FMS.

FMS will most likely accelerate in 2009 because of the recession. It will be interesting to see by how much. We will reach a tipping point soon. 13% of households have a landline that they don’t use.

There are about 112 million occupied housing units in the US, and about 71 million broadband subscribers.

So what does this mean for Wi-Fi VoIP? One of the primary reasons for FMS is to save money; it is more prevalent in lower income households. There are two kinds of phone that do VoWi-Fi, smartphones and UMA phones. Smartphones are expensive, and probably less common among the cord-cutting demographic – except that that demographic is also younger and better educated as well as having a modest income – many are students.

Wi-Fi VoIP in smart phones is still negligible, but the seeds are planted: vigorous growth of smart phones, Wi-Fi attach rate to smart phones trending to 100%, a slow but steady opening up of smart phones to third party applications, broadband in most homes, Wi-Fi growing in all markets.

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