IM, Other Technologies Displacing Long Distance

Even as residential long-distance prices fall to ridiculously low levels, technologies like wireless phones, email and instant messaging (IM) are further cutting into its dominance as a communications medium, a study from J.D. Power and Associates says.

The survey covers consumer long-distance use in the U.S. It says 57 percent of all respondents indicated they use some alternative to making a wireline long distance phone call, including email/IM, wireless phones and Internet-based calling. That’s up from 50 percent in 2000.

Within that 57 percent, wireless usage increased the most dramatically, with a displacement of 38 percent of long-distance calls to wireless – up from 33 percent in 2001, the research group also says. In addition, use of wireless phones as an alternative to long distance was mentioned by 58 percent of this group, up dramatically from the 40 percent of 2001. Plus, 59 percent of wireless users are using their cell phones instead of traditional long distance more often than in the past

In that same 57 percent group, 52 percent of consumers use email and/or instant messaging as an alternative to long distance, up slightly from 2001. Those who use email/IM employ that method 58 percent more often than in the past, J.D. Power also says. However, the displacement rate of those who used to call long distance but now use email/IM is at 27 percent, down from 31 percent in 2001 – depending on the total number of calls being made and whether email/IM keeps pace with that change. Additionally, head-of-household email/IM users are younger, better educated, and have higher annual incomes than the average alternative user.

A J.D. Power spokesperson says the company did not differentiate between email and IM this year because of sample-size difficulties. The research firm hopes it can break out email and IM figures for next year’s survey.

Consumer usage of Internet telephony – voice-over-Internet protocol (VoIP) – as an alternative to long distance is holding steady at 5 percent from the overall 57 percent group, J.D. Power also said. Also, 38 percent of VoIP users are using this method as an alternative to long distance more often than in the past. Eleven percent of total long-distance calls are being displaced by VoIP, up slightly from 2001.

“Despite rate decreases by long distance providers, consumers believe that alternatives such as email and wireless services cost less and are more convenient to use than wireline services,” said Steve Kirkeby, senior director of telecommunications services for J.D. Power and Associates. “This continuing trend poses the single largest threat to conventional long distance calling.”

The same survey also found that Verizon Communications ranks highest in residential long distance telephone customer satisfaction among high-volume users – those who spend $50 or more per month for service. Broadwing Inc.’s Cincinnati Bell, meantime, is the highest among mainstream users who spend less than $50 per month on long distance.

The 2002 Residential Long Distance Customer Satisfaction Study is based on a national representative sample of nearly 11,500 households, Westlake Village, Calif.-based J.D. Power and Associates added.

Reprinted from Instant Messaging Planet, an site

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