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Report: Baby Bells Continue To Lose Wireline Subscribers

Expect an 8% drop in the number of access lines for the four former Regional Bell Operating Companies through the remainder of this year, due mostly to competition from cable and wireless providers, a new study says.
Wireless and cable providers continue to press wireline telecommunications and there is no sign of relaxation in the near future, according to a report released Wednesday by investment researcher Standard & Poor’s.

S&P said access lines for the four former Regional Operating Companies (RBOCs) – BellSouth, Qwest, SBC, and Verizon – were all down at least 4 percent in the year ending in June; the report expects an additional 4 percent decline through the end of the year.

“Competition from cable, wireless and, to a lesser extent, wholesale local services (are) putting pressure on the traditional local voice businesses of the nation’s four RBOCs,” said Todd Rosenbluth, analyst with S&P’s Equity Research Services, in a statement.

S&P noted that wireless growth in 2004 and 2005 began overtaking wireline voice services as the preferred means of communication as wireless subscribers totaled 181 million at the end of 2004. The wireless figure is about 3 million more than the number of wireline subscribers.

The report observes that traditional wireline carriers are mounting bundling marketing campaigns with discount packaging of DSL, satellite, video and wireless as the RBOCs attempt to regain their momentum.