Embarq CEO tries to squeeze juice from stone

We’ve long been of the opinion that landlines are on their way out. How many 20-somethings do you know who have a landline? The only ones we know are the lazy ones who haven’t yet moved out of their parents’ houses. Not a single one who lives on his or her own uses anything but a cell phone or their computer for voice communication. Yet, Embarq is making landline service a centerpiece of their business, both now and down the road. We think this might be their undoing, or at least the factor that causes them to fall behind Sprint. Embarq’s focus on landline, as it would appear from quotes from CEO Dan Hesse, is based on what we feel is faulty logic.

“We would not be in the wireless business just to sell wireless to customers,” he explains. “We are in the business because we think there is an untapped need to have wireless and wireline work together.”

Why? That’s the question that goes unanswered for us. Hesse does provide a semblance of one, but it seems it’s more about what Embarq wants, not what their customers want.

“Common wisdom is that people like wireline or wireless. We think 80%-plus like to have both, because each has unique strengths.”

Of course, there are no surveys or formal studies attached to this figure. It’s just speculation by Embarq, and it seems that they are victims of wishful thinking. Just look at an all-important number for evidence:

The carrier, which has about 6.8 million local lines, is losing about 6% each year. Revenue is down year-over-year.

Yes, they are losing landlines because people don’t want them anymore. They don’t want the “Integrated Calling Features” offered by Embarq. They want one device that does it all (which, incidentally, is why we think everyone will have a smart phone in five years). For instance, Embarq offers a service that sends voicemail notifications to both the landline and cell phone, regardless of which number was called. Customers can also set up their cell phone to forward to their landline, or their landline to their cell phone, depending on where they are. Convenient, yes, if you’re the type that needs two phone numbers. But here’s the thing: We’re moving towards a one-number system. Most troubling is the entire passage:

More than half of wireless calls originate at home, and the share is escalating. It’s another reason the traditional phone business is dying. Hesse acknowledges the problem. “When you come home at the end of the day, we want you to turn off your cellphone,” he says flatly.

You know what, Hesse? When we come home at the end of the day, we don’t want to have to switch phones. We want one phone. Other people want one phone. The evidence points to this. Notice how landlines are down and more cell calls are being made from home. This is not because people want a more convenient convergence of the two media, but rather they only want one of them. But keep on telling us what we want, Embarq. Let’s see how long that lasts. [USA Today]]]>