Not yet ready to cut the phone cord

A man uses a cell phone while driving in Burbank, California June 25, 2008.

-- Deborah L. Cohen covers small business for Reuters.com. She can be reached at smallbusinessbigissues@yahoo.com --

By Deborah L. Cohen

CHICAGO (Reuters.com) - The temptation to go completely wireless has never been greater as the market for smart phones gives rise to new devices such as the iPhone 3G, the BlackBerry Storm and the Palm Pre - all promising to raise the bar on connectivity and keep businesses in the voice and data loop 24-seven.

With budgets strapped, some smaller firms are indeed taking the deep dive, ditching landlines for all-wireless environments in a bid to lower their telecommunications costs and boost productivity.

The percentage of voice and data infrastructure handled by wireless technology at small companies was seen growing six percentage points to 43 percent through April 2010, according to a study of nearly 700 businesses released earlier this year by the research firm Harris Interactive for CTIA, a trade group representing the interests of the wireless communications industry.

Even so, there are pockets of resistance. Despite vast improvements in voice quality and a declining incidence of dropped calls, some small companies remain steadfast about maintaining wired connections for a large portion of their voice communications, even as reliance on real-time smart phone technology increases.

"It's the quality of calls. You can always tell when you're on a cell phone," says Alan Jones, owner of TPA Benefits, an employee benefits consulting firm in Richmond, Virginia. His company continues to stick with wired connections for roughly 70 percent of its calls.

"We all have individual land lines with direct numbers coming in," says Jones, who uses a BlackBerry when he's on the road.

The Harris study noted that small companies were less bullish than larger businesses about the role wireless technology will play in their future. Some 44 percent of small businesses polled said they were on a migration path to become more wireless as time went on, compared to 58 percent of mid-sized firms, and 63 percent of large corporations.

Harris Vice President Milton Ellis says part of the reason is that small companies often don't have the internal tech support necessary to adopt new technologies as quickly as large corporations.

"They don't have the technical expertise in house to feel comfortable (making) their company completely wireless," he says. "Big business have much more data, they have people on the front lines. To them, it's critical that they have that information at their fingertips."

There may also be negative associations related to cell phone use. Some industry observers and small companies worry that mobile calls suggest an atmosphere that is less than permanent, potentially jeopardizing a company's hard-won reputation as an established business rather than a fly-by-night operation.

"I would say there would still be that stigma," says Michael Osterman, president of Osterman Research, a Seattle-area consulting firm that tracks messaging technologies across a variety of media. But he notes that it varies largely by industry.

"If you're dealing with a consultant, you'd probably expect that they'd be exclusively available by mobile phone," Osterman says. "If you're dealing with a brick-and-mortar operation, you'd have a problem just using a cell phone."

That proved to be the case at ItsHot.com, an online jewelry seller based in New York City that abandoned its use of mobile phones for incoming orders when dropped calls led to lost business.

"It's just land lines for customers and sales," says Inga Vascenkova, brand manager for the 10-person company. "It's a credibility issue."

Even in the face of substantial cost savings, reliability was the main reason why Triangle Health Consulting, a small public health consulting firm in Research Triangle Park, North Carolina, switched from being a cell-phone-only business to one that relies heavily on landlines, says owner Peter J. Costa. The firm hosts a variety of conference calls with global participants; it couldn't risk losing the group connection on a mobile line.

"That's disastrous, when you have individuals across continents and time zones," says Costa, whose consultants use BlackBerrys outside of the office. "You've got to have a land line - it's got to be solid."

Regardless of the pace of smart phone advancement, it may be a while before small firms like these go the route of larger corporations, abandoning wire lines for the all-mobile frontier.

Says Steve Ostrowski, spokesman for CompTIA, a trade group representing the information technology industry: "If they go all wireless and for some reason things don't work out, it reflects poorly on the business because it could be lost revenue, ticked off customers. There is a certain level of comfort that companies have with having a traditional black phone on the desktop."