HALF A MILLION CANADIANS HANG UP ON LANDLINES.

More than 500K cut landlines in last year

More than half a million Canadians hung up their home phones permanently in the past fiscal year, and the cord-cutting trend seems to be accelerating despite incentives offered by telecoms to keep customers on the line.

As many as 540,000 subscribers cancelled their home phone services from the top five telecommunications providers — Bell, Rogers Communications Inc., Shaw Communications Inc., Telus Corp. and Manitoba Telecom Services Inc. — between the first quarters of 2015 and 2016, with about 160,000 cutting their landlines in the past quarter alone, according to the companies’ quarterly reports.

T hat ’s the equivalent of the entire province of Manitoba (plus a few thousand neighbours in Saskatchewan) giving up their landlines last year if each subscriber represents one household. The drop pushes the percentage of Canadian households that rely solely on mobile phones well above 25 per cent, higher than Statistics Canada’s most recent rate of 23.7 per cent based on 2014 data.

Based on first quarter rates, telecom watchers predict even more people will say goodbye to home phones this year — and that telecoms will try harder to convince customers to sign up for wireless or broadband services if they can’t convince them to keep their landlines.

“They know at the end of the day, broadband is the only product they’ ll most likely survive with,” Macquarie analyst Greg MacDonald said.

Companies have an incentive to drag out the fading home-phone business for as long as possible since network investments are a sunk cost, but he predicts they’ll put more energy into convincing customers to upgrade than they will pleading with them to keep home phones. This could result in an even faster migration from home phones, MacDonald said.

“Everything they do is designed to grow or keep broadband,” he said, pointing to Shaw’s acquisition of Wind Mobile.

When smaller regional providers are included (the top five companies pull in 84 per cent of total telecom revenue in Canada, according to the Canadian Radiotelevision and Telecommunications Commission), an estimated 636,000 subscribers cut their landlines in 2015, according to Brahm Eiley of Convergence Consulting Group.

Traditional telephone companies have been losing phone customers to cable companies for years, but now cable companies are facing customer migration to wireless as well, Eiley said.

“This is a difficult road for all these guys,” he said.

But telecoms aren’t letting landlines go quietly, according to customers who have been offered deep discounts when they call to cancel.

Landlines may be less lucrative than wireless, but the residential telephone market still pulled in $5.2 billion in 2014, a 12-per-cent chunk of the $42.1-billion telecommunications retail market, according to the CRTC. (Wireless revenues hit $20.9 billion in 2014.)

Telecoms remain tightlipped about the exact in- centives they use to entice consumers to keep home phones, but customers who toyed with the idea of cancelling their landlines said Telus convinced them to stay connected by lowering their costs to $10 per month from about $35 per month.

Representatives from Telus and Bell both said they deal with customers on an individual basis.

“While there’s certainly an increasing trend for customers to rely on their cellphones as their primary phone these days, many continue to want home phone as well,” Telus spokeswoman Liz Suavé said, noting that families with children often want a home phone so there’s always a way to dial 911 in an emergency.

Both companies emphasized the wireless and broadband services they offer, noting home phones are often included in bundled services that offer discounts for signing up for more. (Landlines are typically about $10 cheaper when purchased in a bundled package.)

Bell spokeswoman Jacqueline Michelis said nearly two thirds of new customers opt to get home phone services when they sign up for broadband TV or high-speed Internet — the “real driver of growth.”