This from Telephony online and the Convergence Consulting Group:

The latest in an annual study of the bundled services market shows US telecom service providers are losing wireline voice customers at a faster pace and being transformed in the process into companies that will look very different from their traditional telecom roots. The Battle for the American Couch Potato: Bundling, TV, Internet, Telephone, Wireless, released this week by the Convergence Consulting Group, shows maintaining a broadband connection is increasingly important to telecom providers, as wireline voice services become much less important.

If you look at the numbers in that PDF report and you still think that the QBPP is a viable option or that the last 400K businesses in the BellSouth region will somehow see the light and convert, I have some land for you in South Florida.

I have written about this in years past: the telcos have finally hit the wall. Everything is flat or down now: TV, wireline, cellular, and broadband. Granted most numbers are for residential, not business accounts which agents sell, but this will affect the entire telco business. Telco moved from the most profitable service - Voice - to Internet (the 2nd most profitable) - into TV, which is te least profitable. Why? Set-top boxes cost $400 per pop. How do you recoup that $5 per month rental? Most of the pricing goes straight to the content. You know, Disney and ESPN want their dough. Then there's the network upgrade for TV (and high-speed internet), which although VZT says is under $900 per home passed, the numbers I see are closer to $2000. Let's factor in the advertising. I get something almost everyday from VZ. At even $0.75 per mailer that's $15 per month. Times how many homes passed?  See how that may slow the telco engine? Plus MSO's moved from the least profitable service (TV) to the most profitable (Voice). And MSO's are getting into mobile data and maybe cellular voice with Sprint.

When you look at the summary from Convergence Consulting Group, it looks bleak.

• We estimate Cable's double play base of TV and Internet subscribers YE2008 at 61% (we forecast 79% YE2011). The RBOC/Telcos residential telephone to broadband overlap was 33% at YE2008 (we forecast 54% YE2011). Hence, it's easier for Cable to add voice customers off this overlap than for the RBOC/Telcos to add TV customers.
• 2008 RBOC/Telcos residential wireline telephone line loss was 10%.
• Wireless Substitution was responsible for about half the loss and Cable for the other half.
• We forecast Cable will have 23% of residential telephone subscribers by YE2009.
• We estimate wireless-only households at 20% at YE2008.
• Wireless annual subscriber additions continue to slow, 2008 saw 15.6M (2007 saw 22.4M) and we forecast 13.9M in 2009.
• Data continues to drive wireless ARPU growth (voice ARPU is declining). We forecast that price competition, which intensified in 2008, will continue to increase going forward.

Telcos are building out high-speed networks for TV and Internet, which is costing a bundle, at the same time that they are forklift upgrading the cellular networks to 4G. Have they even paid off the debt from constructing the 2.5G and 3G systems? Meanwhile, Charter is bankrupt and the rest of the MSO's have to upgrade to DOCSIS 3.0 while also constructing WiMAX networks. All while the ARPU is decreasing and the customer acquisition costs are increasing.

With these kinds of pressures on the RBOCs, imagine the pressure on the ILECs without a cellular division like QWEST, Embarq, Windstream, Frontier and Fairpoint. Landline losses that cannot be off-set by TV or cellular revenues. Yikes! Basically, the EarthLink strategy right? Cost cutting as the primary executive decision. Right out the knitting until its over.

Where do you think Agents come into that play? With losses, an easy cost cutting measure is to stop paying agent commissions. Think about your Channel Partners in 2009.