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17% of U.S. Households Now Use Cell Phones Only, Says Nielsen

5:45 am on October 10, 2008 | Category: Telecom Services, Telephone, Wireless

About 20.2 million American households (representing some 17.1% of the U.S. telecom market) have now ditched their landline telephones and rely exclusively on wireless for their residential calling needs, according to a recent study by The Nielsen Company.

As the U.S. economy tightens and the vast majority of Americans see their mobile phones as indispensable, more and more people are looking at landline telephones (which cost an average of $40 per month) as an unnecessary extravagance. At the current rate of “cord cutting,” around 20% of households will be wireless-only by the end of this year, research suggests.

“As wireless network quality improves and unlimited calling becomes increasingly pervasive, we expect the trend toward wireless substitution to continue,” commented Nielsen Mobile’s vice president of client services, Alison LeBreton. “In a tightening economy every dollar counts, and consumers are more and more comfortable with the idea of ditching their landline connection.”

Nielsen reports that cord cutters in the U.S. usually come from smaller households (with just one or two residents), and tend to have lower-than-average household incomes (59% earn less than $40,000).

It is clear that wireless substitution does not work for everybody, however, with 10% of landline customers having experimented with cord cutting, only to return to their fixed-line service.

Nielsen’s full 12-page report on wireless substitution is available at http://www.nielsenmobile.com/documents/WirelessSubstitution.pdf.

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