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Huge Price Increases Reported for Landline Service

Worried Woman looking at carrier phone bill on her laptop.

First reported by Channel Futures here, business and residential customers are seeing a steady stream of price hikes and service decommissions as Local Exchange Carriers (ILECs) make a “backward retreat” from supporting and offering analog loops technology, such as plain old telephone service (POTS), copper-based POTS, and time division multiplexing (TDM).

Technology advisors say they’ve seen plain old telephone service (POTS) and time division multiplexing (TDM) rates increase drastically on existing customer contracts.  In one case, the local exchange carrier increased all business landlines to more than $1000 per month for a POTS customer, and other customers are reporting 300-500% increase on their TDM and POTS services.  Alternatively, carriers are shutting off services altogether rather than increase the prices.

Bary Bazen, founder and president of Profit Advisory Group, said rate hikes and service discontinuation are “becoming very commonplace across carriers.”

“Customers are getting POTS notifications regularly that say, ‘Hey, we’re shutting down copper service in your rate center. You’ve got 90 days to move the service or lose the number,’” Bazen told Channel Futures.

Why are Local Exchange Carriers (ILECs) Increasing Pricing?

Simply put, it’s too expensive to maintain older infrastructure.  Prior to the VoIP revolution, there were maybe 1,000 telephone customers on five miles of copper plant, but now adays you might have 75 customers on that same copper–which still has to be maintained and repaired, and you still need to pay technicians to do so. 

What is the Alternative to Price Hikes or Decommissioned Service?

Most impacted customers are moving their POTS/landline service to SIP Trunks.  Session Initiation Protocol (SIP) is a more dynamic form of voice over IP, offering greater reliability than typical VOIP calling, while providing major cost savings for end users.  Since SIP utilizes existing bandwidth for connectivity, the cost is much, much lower than POTS lines–even before the recent price hikes. Customers generally see a 40-60% decrease in cost when comparing POTS lines to SIP trunks. SIP Trunks are also easily scalable, so businesses can increase or decrease the number of phone ‘lines’ rather quickly, and typically do not require an on-site technical visit.  

Some older business phone systems can support SIP trunks using a gateway.  We’ve seen success with using gateways, but also have seen call quality issues arise, so it’s always recommended to use technology that is similar in scope (i.e.- SIP trunks with an VoIP phone system).

Not only is SIP a cost effective alternative to landline service, but so is its counterpart- VoIP business phone systems, or cloud-based phone systems.  Business phone systems are not the break-the-bank expensive investment as the were in the past.  Now, you pay a small monthly fee for both your phone service and phone system while receiving more features, failover & business continuity attributes, and automatic security software updates. 


This entry was posted on Thursday, March 16th, 2023 at 3:45 pm. Both comments and pings are currently closed.