Ma Bell's landline telephone service is definitely not a growth industry these days. In the first quarter of this year, AT&T lost 1.6 million landline phone customers. That's nearly 18,000 AT&T customers who are canceling the phone company's core product offering every day. Although investors seem to believe that phone companies can absorb this decline because the lost customers are simply moving to wireless, many are becoming customers of a cable operator's phone service.
GigaOM raises an interesting question -- whether the shrinking of the landline customer base will eventually catch up to phone company's maintenance of their phone lines. If the lines are not generating the revenue to offset the costs of keeping them up, how will phone companies cope with providing reliable service for their remaining phone customers? One analyst quoted in the GigaOM post indicates that the per line cost of maintaining Ma Bell's phone infrastructure increased from $43 in 2003 to $52 in 2007, driven up mainly from the decline of customers. And while AT&T and Verizon have wireless revenues to offset their losses in the landline business, I wonder how smaller phone companies that don't have these offsetting revenues plan to provide the same levels of maintenance on their phone lines while customers continue dropping their service?