The specter of fixed-to-mobile substitution is nothing new for US-based fixed-line telecom companies: their voice revenues shrank by 5 percent last year as more customers abandoned landlines for mobile phones. Indeed, a survey of mobile subscribers indicates that the pace of substitution may quicken, with troubling consequences for both incumbents and wireless providers.

Although only 10 percent of the respondents had canceled their landline service, 28 percent plan to do so. The resolve to "go wireless" didn't diminish with age. In fact, 29 percent of respondents over the age of 55 intend to switch—worrisome news for incumbents banking on these customers' loyalty. But wireless companies shouldn't rest too easy, since respondents with imminent plans to dump their landlines were more than twice as likely as other subscribers to change their wireless carriers at the same time. This volatility will tax the retention strategies of both camps and place an even higher premium on savvy customer segmentation.¹