More than 20 million homes have cut the cord on landline phones

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People of a certain generation remember when a wire connected the headset to your phone, your phone to the wall and your wall to the world. The big advance in the 1990s was -- amazingly -- freeing the handset from the wire, allowing you to roam more than a few feet while talking.

Now, according to new data released this morning by Nielsen, more people are taking the wire completely out of the equation. And the whole concept of a landline appears to be going the way of the bulky rotary phone (pictured at right).

More than 20 million U.S. households -- 17% of all homes with phones -- use only a cellphone, according to Nielsen. That figure has quadrupled since late 2003, when only 4.2% of households were wireless only.

‘As wireless network quality improves and unlimited calling becomes increasingly pervasive, we expect the trend toward wireless substitution to continue,’ Alison LeBreton, vice president of client services for Nielsen Mobile, said in a news release. ‘In a tightening economy every dollar counts, and consumers are more and more comfortable with the idea of ditching their landline connection.’

Young people are more likely to use only a wireless phone. And the majority of people who have dropped their landline service are in lower income brackets, according to the Nielsen report (you can download a PDF here).

Cutting costs appears to be a big reason for cutting the cord. A landline phone costs an average of $40 a month. But going wireless-only doesn’t mean you can pocket all those savings. ‘Wireless substitutors’ use their cellphones more, paying an average of $6.69 a month more than people who also have a land line, Nielsen said.

Those increased wireless charges are one of the reasons people give for returning to landline service. (Not to mention the occasional outrageous bill). About 10% of households with a landline phone in the second quarter of this year relied only on a cellphone before.

Among the reasons for reconnecting the cord: 17% needed it for another service, such as the Internet or TiVo; 12% said it was too expensive to use a cellphone for all their calls; 11% found it was cheaper to buy a bundled package that included TV and and Internet; and 10% just liked the safety and reliability of landline service, which tends to work better during events such as earthquakes.

-- Jim Puzzanghera

Telephone photo by jgh_photo via Flickr