Cell phones and VoIP are killing the regular old home phone business. Reviewing a new study from a Citigroup analyst, Barron's said, "The telcos continue to lose residential phone subscribers to both cable VoIP and wireless subscriptions at a steady 7%-8% a year."
The number of consumers who use only a wireless phone at home is expected to hit 27% in 2010. And the penetration of cable VoIP is expected to be 25% by then.
It might seem bad news for AT&T (NYSE: T) and Verizon (NYSE: VZ), but both do have large wireless businesses that should help offset attrition among home phone users. They are also selling new fiber-to-the-home broadband, which will also supplement revenue.
The news would also appear to be good for cable firms like Comcast (NASDAQ: CMCSA). Stocks in cable companies have been beaten down by concerns about competition in TV delivery from the phone companies. But VoIP revenue is a big, new source of revenue, and one that is growing fast.
The losers in all of this would seem to be companies like Qwest (NYSE: Q). Qwest has no cellular arm nor much of a wireless operation. Its shares have dropped from a 52-week high of $10.45 to $7.15, while most phone shares have gone up. Look for the drop to continue.
Douglas A. McIntyre is an editor at 247wallst.com.