META Report: Mobile or Wired: Which Voice Option Is Best?

News Item: North American news reports indicate that some consumers are foregoing traditional wireline telephones entirely and using a mobile phone as their only telephone. In some cases, consumers find mobile phones less expensive because they provide services such as voice messaging and caller ID as part of a basic package, and they do not charge long-distance fees if the user does not exceed the total minutes on the monthly plan.

In Europe, where the basic wired service does not include any “local area” with free calling, switching to mobile-only phone service can be even more compelling. This practice is already common in geographies where mobile phone service and utilization are most advanced, such as the Scandinavian nations. And many developing countries with minimal fixed-line infrastructures are leapfrogging to mobile phone infrastructures.

Situation Analysis: Whether a mobile phone can replace a hardwired phone for consumers or individual business users depends on several factors, including the quality of cellular service in the user’s area and what services the individual needs. In some cases, a mobile phone can make sense as the main or only phone for some individuals or employees.

The first key issue for individuals considering making a mobile phone their sole phone service is service quality at their homes and offices. The mobile phone service must provide similar service levels to hardwired service in terms of dial tone availability, voice quality, and dependability. Business users, in particular, cannot afford the frequent call interruptions and connectivity problems that still plague mobile phone service in many parts of North America.

The Advantages of Mobility
If service quality is adequate, mobile phones offer several potential advantages, including:

  • Mobility: The business phone is no longer tied to a desk – it can go with the employee as part of a mobile office. It can support mobile and remote workers by providing always-available connectivity.
  • Single telephone number: The phone owner can be reached anywhere service is available at any time using a single phone number. Part of the vision of mobile telephony pioneers was that individuals would have a “lifetime phone number,” through which they could always be reached.
  • Unified voice mail: Users have a single voice mail box for both office and out-of-the-office messages, rather than having messages split among office and home phones.

    Data services: More advanced digital wireless systems, available for some time in Europe and parts of Asia, and becoming more available in N

  • orth America, can provide higher data transfer rates than wireline modems (though not as fast as DSL and cable modems).
  • For organizations, some mobile carriers offer free calls between phones covered on the same contract. These calls are the equivalent of on-network calls on a PBX, which typically cost $0.02-$0.025 per minute on hard-wired services, making the mobile option more affordable.
  • Because mobile plans work on a fixed rate, individuals and businesses can budget more easily. Contracts that enable organizations to pool mobile minutes across a population of users enhance this advantage.

For organizations, it is generally easiest to justify a mobile phone as the sole choice for employees working from home, and secondarily for employees in small, remote offices.

Drawbacks of Mobile-Only
Balancing the advantages of mobile-only service include the following problems:

  • Spotty cellular coverage, particularly in North and South America, means that some remote workers in an organization may not have adequate service quality in their locations, necessitating maintaining wireline service for those workers and, therefore, requiring that the organization administer two plans to support remote employees.
  • Particularly in North America, mobile phone plans typically enable only one device per phone number, preventing users from having a speakerphone on their desk and a small mobile phone in their pockets. Mobile phones also make it impossible for two people to be on the same line at the same time (e.g., an executive and his secretary setting up an appointment with a client), though increasingly available conference-calling features are a reasonable alternative.
  • Mobile phone systems often do not provide easy call transfers and other features common on an office PBX and vital in many office situations.
  • Mobile phone usage (e.g., roaming, minute usage) must be carefully monitored to ensure optimal plan pricing and use. This could add extra administrative cost.
  • Difficulties in comparing the real costs of wireline and mobile plans make it hard to predict whether organizations will realize real savings, making it harder for telecom managers to decide which is the better choice for their organizations.
  • Remote/home workers may need wireline connectivity to support dial-up Internet access and fax, negating some advantages of the mobile-only option, particularly in areas where no high-speed access is available. However, home offices often require two lines – one for voice and the other for fax/modem. The mobile phone can take the place of the voice-only line.
  • Wireless technologies raise health concerns which – though unproven – are similarly not disproven, and raise potential corporate liability and worker concerns.>

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    For general office use, mobile phones have the following additional disadvantages:

    • Cellular integration with the PBX is nascent, so cellular cannot provide call transfers, call forwarding, and other standard PBX functions.
    • Existing offices already have large investments in installed PBXs and handsets that make switching to the mobile option hard to cost-justify.
    • Only about 20% of office workers need the mobility features of mobile phones, making the only advantage the possible operational cost savings.

      User Action: Despite price parity, “mobile phone as the only phone” will work for only a small segment (10%) of the corporate population. However, as mobile pricing continues to decline and networks and devices improve, this option will become more viable for a larger audience. In three years, mobile phones as the only phone will make sense for 50% of remote mobile or always-connected users.

      META Group analysts Peter Firstbrook, Elizabeth Ussher, Don Carros, Leif-Olof Wallin, Jack Gold, Terry Suttles, Brian Burke, Joaquin Potel, Jeffrey Mann, Andreas Bitterer, William Zachmann, Dale Kutnick, and Val Sribar contributed to this article.