Local phone companies say there's room in the market for wireless and wired to coexist

As early as 1915, the American Telephone & Telegraph Company — now AT&T — discussed developing a wireless phone.

According to the company's internal memos, the plan was scrapped out of fear the technology would undermine its monopoly on landline telephones in the U.S. Nearly 100 years later, their prediction may be coming true.

At the end of 2007, there were some 3.3 billion subscriptions worldwide to mobile phone service, and only 1.3 billion for landlines. But local phone service providers say there's still a place for wired in today's world.

"I think there will always be a valid place to have land service," says Tyrone Garrett, president of SEMO Communications in Sikeston, Mo. He says that because of tough economic times, people may be weighing their options and choosing either landline or cell phone service, but it's not enough to damage business for either service.

"We see a small trend that way, but it's not significant," says Garrett.

There are advantages and disadvantages to both services; for cell phones, obviously, a big draw is the mobility. However, Garrett says that cell phones may actually be more expensive because their basic infrastructure and nationwide networks naturally drive costs up.

"Our landline packages are competitively priced and economic to have because they come in bundles with cable and Internet," he says.

"There's a trend toward bundles, and discounts are offered with those," says Garrett. He says that the increasing popularity of cell phones has contributed to this emphasis on packages and has also driven down the prices for landline service.

In addition, SEMO Communications serves many of the rural communities of Southeast Missouri, where it's hard to find reliable cell phone service. Here, landlines become essential.

"I do think both services will coexist," says Garrett. "I think 99 percent of it is the mobility factor. People want to be reached at all times. I think there will be an integration of all services, wireless and wired. The company with the best combination will be the most successful."

Chris Simmons, general manager at Big River Telephone in Cape Girardeau, says that he has seen some customers dropping landline service, especially those in the "younger market," but the change is not a big one. Like Garrett at SEMO Communications, Simmons is confident that the market is big enough for both landlines and cell phones.

"Cell phone reception is not very good in some areas, and the only option is a landline for quality service," says Simmons. He adds that there is probably "stiffer competition" between the two services in metropolitan areas. Still, Big River continues to add innovative options to compete with other companies and communication methods.

"We're always working to develop better business applications," says Simmons. "We understand that it's not the device, but the applications that drive revenue and business."

One of the latest applications is Sim Ring. Customers signed up for this service have one phone number for up to 25 lines. Every time they receive a call, their cell phone, landline, office phone and vacation home phone, for example, will all ring at once, and they can answer the call from any of those locations.

"It's been very successful because a lot of people have landlines and cell phones," says Simmons of the service, which was launched about a year ago. "If they're on their way into the house from the grocery store and they get a call on their cell phone, they might not want to burn up minutes so they'll answer the call on their landline. People don't want to miss important phone calls, so this is really helpful."

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Wireless Quick Facts

U.S. subscribers: 262.7 million (June 2008) | 194.4 million (June 2005)

Penetration (Percent of total population with cell phones): 84% (June 2008) | 66% (June 2005)

Annualized total wireless revenues $143.7 billion (June 2008) | $110.3 billion (June 2005)

Annual text messages sent: 600.5 billion (June 2008) | 57.2 billion (June 2005)

Source: International Association for Wireless Telecommunications Industry.