Do I need a landline?

Should you think about ditching your home phone altogether or is there life in the tried-and-true service yet?
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There are all kinds of alternatives to a landline phone connection these days, but we find landlines are not quite obsolete yet. Whether or not you should get rid of your landline depends on your telecommunications habits. It also comes down to how you feel about predictable cost and reliable service.

Landline advantages

Not surprisingly, Australia’s two major landline service providers, Telstra and Optus, assured CHOICE that landlines still play a vital role for many consumers. It's a position backed by Australia’s telecom regulator, the Australian Communications and Media Authority (ACMA).

According to Telstra spokesperson Karina Keisler, the top reasons to hold on to your landline include:

  • The ability for emergency services to pinpoint your location in the event of a triple-zero call. (Mobile phones can only reveal the general vicinity of the caller.)
  • The flexibility of untimed local calls. (Mobile phone users generally have to worry about staying under monthly usage limits – and frequently go over them at significant cost.)
  • Reliable broadband internet access that can handle increasingly popular “bandwidth hungry” applications. (Wireless broadband access through mobile 3G or a wireless modem is slow compared to fixed lines and not good at handling large amounts of data.)
  • The ability to connect a fax machine or back-to-base alarm. (This can’t be done without a landline phone connection.)

More generally, there are those who will want to keep a landline to maintain a communication option that parents and grandparents are comfortable with – and to capitalise on the heavily discounted STD and international call rates most carriers now offer.

The internet factor

An ACMA spokesperson told CHOICE that wireless broadband is today’s fastest-growing option for going online but probably not suitable for heavy internet users. “Fixed-line networks continue to carry the bulk of data downloaded from the internet – 91% at June 2010. If consumers want flexibility in terms of where they wish to access broadband, wireless internet will be attractive. If, however, they’re seeking to use bandwidth-hungry applications, landline or fibre will be more suitable.”

There is also an economic side to which is more suitable. An 8GB mobile broadband package from Optus currently sells for about $40, for instance, while for around $50 you can get up to 120GB of data with a landline set-up.

Cost and coverage issues

mobile reception zoneThe widely publicised breakdown in Vodafone mobile phone service late last year had customers saying things like “shocking reception, disgraceful support and awful customer service” and gave rise to a class action suit against the company.

This event – and the continuing frustration of customers when it comes to figuring out pricing plans – underscores two longstanding and perhaps permanent problems with mobile technology: unpredictable service and cost. They’re both factors to keep in mind if you’re considering ditching  your landline phone.

Teresa Corbin, CEO of the Australian Communications Consumer Action Network (ACCAN), says the mobile landscape is an untamed frontier. “There are no performance standards with mobiles, whereas with landlines you do have standards,” she says. “Customer service guarantees for landlines are now in the order of 97%-98% reliability. There are no such guarantees for mobile service and there may never be.”

Some consumers might want to retain a landline for voice calls if mobile coverage is limited where they live or work. While Telstra mobile claims to provide service to 99% of the population, it's hard to substantiate. You can lose service for any number of reasons, including the number of people who are using the network at any given time. One groundbreaking deal that recently emerged is worth looking into: the Amaysim allows you to buy a SIM card separately and use it in the phone of your choice. The technology has yet to be proven over time but could be a welcome alternative to capped plans, prepaid and the like.

Mobile plan confusion

Mobile pricing plans remain so complicated and variable that consumers often get hit with unexpected charges. ACMA says that “58% of mobile capped plan users report exceeding their capped plan expenditure limit at least once [in the year to May 2010]” and adds that “information around capped plans was a key source of complaint by consumers, with many consumers claiming they were not made aware of the charges that apply once a cap is exceeded, leading to a high incidence of bill shock”.

Virgin Mobile customer Stuart Johnson recently had a taste of bill shock after doing some web searching while on vacation. “If you reach 90% of your credit limit, they’re supposed to let you know by SMS,” he says. “I got a text at 2AM, at least three days after it should have come; by then, the bill for my $35 monthly rollover plan was $396. I had no idea my credit limit was so high [$400]. Virgin certainly didn’t make it clear – they waffled on with so much stuff during the sales process that it was impossible for me to work out what was important and what was not.”

Complaint Update

In the first three months of 2011 telecom complaints have gone through the roof. The Telecommunications Industry Ombudsman (TIO) service reported on 4 May that 59,532 new complaints were made to the TIO in the first quarter of 2011, an increase of 31 per cent on the previous quarter and the most complaints in the service's history.

Vodafone customers made 14,670 new complaints to the TIO in the first quarter of 2011, an increase of 96 per cent from the previous quarter, but complaints for most large service providers also increased.

Mobile phone complaints alone increased 50%, and the central theme was consumers getting stymied by unclear and complicated contracts and ending up financially overextended. Ombudsman Simon Cohen said “telephone and internet companies need to do more to make sure consumers are given the right information up front, and provided the right tools to monitor their usage and charges.”

The quarterly increase comes on the back of a 36% increase in credit management issues over the previous financial year, a result of consumers not understanding the service they have contracted for or the charges they will incur, the TIO says.

“Credit management issues are particularly concerning because consumers most affected are often also the most vulnerable or disadvantaged.




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