Decline of the landline

Smart Consumer: Why going mobile is the best way to save on your phone bill

Connected: Emma Louise Ryan left Eircom for a line-free broadband cable provider. Photo by Dave Meehan

By John Cradden

Thursday February 17 2011

If you really want to save money on your telecom bills, it’s time to cut the cord.In these difficult times, more households in Ireland are heeding this advice and dropping their telephone lines in favour of going ‘mobile-only’.

The rationale is simple. Ireland‘s telephone line-rental cost remains among the highest in Europe. At an average monthly charge of €25, line rental is more than three times that of Finland, according to the European Commission.

Another spur to ditch the landline may be because you are an Eircom customer seething with rage at the company’s new decision to hike call charges by up to 60%.

Call connection fees for calls made outside Eircom packages will rise from 5.95c to 9.5c from March 11.

In addition, in moves the Consumers Association of Ireland described as sneaky, the charges per call will also be rounded up to the nearest cent, while the evening start time for making cheaper off-peak calls has been moved to 7pm from 6pm.

So it’s really no surprise that many users are now figuring that a mobile phone is a perfectly OK substitute for a landline and that paying for the two services is an unnecessary duplication of costs.

Indeed, the decline in landline use, which has been under way for several years, has been picking up speed.

A 2009 EU ‘barometer’ survey showed that the proportion of mobile-only households in Ireland rose sharply from 20% in late 2007 to 28% in late 2009.

‘It’s likely that this has gone up by a few percentage points over the last year,” said Tom Butler, spokesman for the telecoms regulator ComReg.

In addition, the rate at which telephone lines are being ditched is accelerating, according to figures from ComReg.

In the year to September 2010, the number of active landline connections fell by over 4% — more than in the previous four years combined. Roughly 75% of these lines are residential.

It might not surprise you to learn that — as with a lot of consumer technology — a bit of an age gap is opening up in this area.

According to the EU study, folk over the age of 55 are far less likely to be living in a mobile-only household than those under 55, especially those living alone.

Indeed, for many young people, the idea of paying for a landline telephone is positively old-school.

“The idea of a phone ringing in an empty house is amusing,” says Jack McDermot (27), who has never paid for a fixed-line telephone service. McDermot lives alone and uses cable firm UPC for his broadband and TV service.

“Most of my friends are similar to me in that they never had a fixed line since they moved away from home.”

“I actually feel that there’s a generational issue here. People from their late thirties upwards have probably had a landline for years and are reluctant, or perhaps haven’t even thought, to give it up.”

One of the most cited problems with relying on a mobile phone is the high cost of making international calls, but that’s not an issue for Jack and his friends.

“My twenty-something friends know that their friends and family abroad are easily contactable — for free — over the web, with the added bonus of video as well as voice.”

But there is plenty of evidence that older citizens are becoming wise to the cheaper alternatives to using landlines.

One of the six winners of Age Action’s Silver Surfer Awards last year was Daniel Hoare, a 102-year-old man from Cork who uses Skype to regularly call up his son in Fiji.

Eircom still holds by far the biggest market share in fixed line telephony because of its status as the former state TELCO, says Niall Kitson, editor of digital media magazine PC Live!.

But of course, fixed line telephony is no longer where it’s at in the consumer telecommunications market, he says.

“As the population ages this will change and broadband will become the primary factor in choosing a service provider. The variation between service providers has created a really open market.”

“It will be the battle of the broadband connection speeds and services, not fixed lines, that will define the future of telecommunications,” says Kitson.

“Assuming you have the freedom of choice in the first place.”

But most broadband services are delivered via ‘DSL’ technology, which is piped through a traditional telephone line. And for that, you still need to pay the €25 a month line rental, even if you have no intention of using it to make telephone calls.

This means that to avoid paying expensive line rental, you’ll need to switch to a non-DSL provider, such as cable firm UPC, a fixed wireless provider like Digiweb, or use a 3G mobile broadband service, such as those offered by the mobile operators.

Cable is probably the most reliable and fastest choice, but of course, its availability throughout the country is limited, so what about the other alternatives?

‘The anecdotal evidence so far is that fixed-line (DSL) broadband remains a superior solution to wireless services,” says Kitson. “Mobile may be, well, mobile, but the kind of connection speeds advertised are optimistic.”

“Dongles (the 3G modems that you plug into your PC) are fine for students, road warriors or single-PC households in urban areas,” he says.

If moving to a reliable non-DSL provider is not possible, you could always see about switching DSL providers in your area.

“There are plenty of alternatives for just-voice service, such as Vodafone, O2, UTV and a number of other resellers,” says Eamon Wallace of broadband lobby group IrelandOffline.

But the savings made possible may not be as good as ditching the landline. “Price reductions are restricted by the insanely high line rental of €25, which is certainly the highest in the EU, if not the world,” says Wallace.

Maria Maguire from Cavan recently switched from Eircom to Vodafone at Home for her landline service. She is on a ‘Talk Anytime’ package bundled with a basic broadband service.

As well as finding it a very easy switch, Maria says she is saving between 10% and 15% on her telecom bills. “Because I’m also a Vodafone mobile customer, I get a discount on my Vodafone at Home package and I also get free UK landline calls,” she says.

Vodafone is offering VAH services at half price for the first two months until March 11, although only if you already have a modem from your previous provider.

– John Cradden

THis article first appeared in the Irish Independent

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