The time is coming when Verizon (News - Alert) will be able to - and will want to - dramatically step up its marketing for VoIP, and the reason has to do less with its earnings than with its stock price. Or at least that's the conclusion one would draw from an analysis by Zacks.com.

 

Verizon second quarter results were highlighted by healthy gains across strategic growth areas such as wireless, broadband Internet and video. That isn't news. Nor is it news that traditional voice lines continue to erode. Up to this point, showing growth in the wireless and broadband areas arguably has been most important, as it shows a path forward from the voice-driven business to a new model.

 

Verizon has done that. But observers always are troubled the shrinking landline voice base. Total switched access lines declined 9.9 percent year over year to 34.3 million, for example.

 

One can argue this is no problem so long as the growth businesses are healthy. But who would not at least raise the issue of new challenges as basic broadband access and wireless voice have matured? True, the highest growth rates seemingly are coming from wireless data, so there is a ready answer for powering wireless revenue, and video obviously will help as well.

 

But a slowing of wireless and broadband is inevitable at some point, and Verizon might well find at that point that revenue losses from landline voice are putting huge drag on its other efforts.

 

"We remain concerned over the persistent access line losses to competition, which may constrict future earnings performances," Zacks.com says.

 

Granted, Verizon might conclude it has other "more pressing" issues. Neither it, nor AT&T (News - Alert), have been shy about shedding costs in the voice part of their wired network businesses. But voice will remain a key part of the overall landline business, and can be a powerful revenue contributor, if not because of high average revenue per user but in the form of reduced churn and customer stickiness.

 

That is hard to quantify, but will be a bigger factor as wireless and broadband access growth rates slow dramatically. As cable operators have found voice to be a valuable weapon in terms of the stickiness of their bundles, Verizon someday will find itself in the same position as many European telecom providers who have seen massive erosion of their voice bases, and have been forced to market VoIP aggressively.

 

Right now, one could still make a good argument for tolerating some amount of voice share loss as the better revenue-maximizing strategy. But that will change at some point. And the time might be sooner than most of us now think.

 

There is some value-price point where most consumers will conclude it just makes sense to continue buying a landline voice service, even when most of their voice and communication is centered on their mobiles. And that value relationship will change over time as newer features are added.

 

Still, the key issue is when it no longer makes sense to tolerate voice service erosion. Right now, gross revenue is the key concern. But that won't always be the case. Already, AT&T has seen a flattening of its voice line loss curve as it has ramped up VoIP sales.

 

That time is coming for Verizon as well.