More Are Dropping Landlines, for New, Cheaper Options

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Two out of every five U.S. households have cut the cord on landline phone service and now subsist entirely on wireless phones.

That's a statistic we'd ordinarily expect to be reported by the FCC (or maybe the NSA). But it comes courtesy of the CDC -- the U.S. Centers for Disease Control, which began gathering this data 10 years ago to keep in contact with people it was tracking for research into health conditions.

In any case, it seems the CDC is now the agency in charge of figuring out which Americans use which kinds of phones for their communications needs. And in July, the CDC released a report showing its latest data. Here's a quick rundown of the more interesting findings:
  • 41 percent of Americans now live in households with no landline telephone and only cell phones. This includes 39 percent of U.S. adults and 47 percent of the children in the nation.
  • Among adults, 66 percent of millennials ages 25 to 29 have cut the cord on landlines and gone totally cellular.
  • Slightly older millennials, ages 30 to 34, are slightly more attached to their landlines, with only 60 percent having cut the cord.
  • Slightly younger millennials, on the other hand -- ages 18 to 24 -- are even more attached to landlines, with only 53 percent having cut the cord.
  • And the older you get, the more likely you are to still keep a landline active. Ages 35 to 44 are 48 percent wireless-only, 31 percent of those ages 45 to 64 rely solely on wireless phones, and for Americans aged 65 and up, only 14 percent have gone entirely wireless.
A Good Way to Save Some Money

Both landlines and cell phones have their uses -- costs. A landline with unlimited calling within the U.S. will run perhaps $40 a month when leased from AT&T (T) or Comcast (CMCSA) (maybe less when bundled with other services, but it's not always easy to tell). Add $100 a month to get unlimited calling on a Verizon (VZ) smartphone, and you're looking at $140 a month. Of course, with the added cost you also get the added flexibility of being able to make and take phone calls anywhere, and that can be very handy when you end up, say, stranded on the highway with a flat tire.

But still ... $140 a month?! $1,680 a year? Forget about the poverty line -- even for an average wage-earner in America, earning $50,000 a year, that's 3.4 percent of pre-tax income. It's no wonder that when consumers on a budget look at this figure, they decide to ditch the landline.

A Better Way to Save Some More Money

And yet, there are cheaper ways to cover both needs -- the need to make long phone calls from home, frequently, while also having a cellphone for emergencies.

For example, as long as you have a broadband Internet connection (and if you're reading this article online, chances are good that you do), services such as MagicJack and Vonage will offer unlimited home phone calling over the Internet for a fraction of the prices that Verizon, Comcast and AT&T charge.

And there are even better alternatives. Ooma Voice-Over-Internet protocol (VoIP) devices, for example, are rated by Consumer Reports as the top option for cord-cutters who want landline-like service for a fraction of the cost.

Ooma service costs as little as $5 a month (to cover government regulatory fees) after purchase of an Ooma console ($129.99 on Amazon). Supplemented with, say, $100 worth of annual minutes on an AT&T "Go Phone," or Verizon or T-Mobile "Pay as You Go" plan, the cost of phone service could run $15 a month. With options like these, it's never been cheaper to cut the cord.

Motley Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned, either. Try any of our newsletter services free for 30 days.

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