Though it can go both ways, I think that its more likely that the case is that he died. I believe this because I feel like the statement "'Cause you've gone away, where there isn't a telephone wire" would seem irrelevant to what's going on and weird to just throw out there unless it was to give the listener the hint that he's dead, rather than just moved off to some remote place. Also, it seems that it is impossible for the narrator to move on, and I feel that moving on after a relationship would be much harder after someone you loved has died than had left you. But that's just what I think.
Though it can go both ways, I think that its more likely that the case is that he died. I believe this because I feel like the statement "'Cause you've gone away, where there isn't a telephone wire" would seem irrelevant to what's going on and weird to just throw out there unless it was to give the listener the hint that he's dead, rather than just moved off to some remote place. Also, it seems that it is impossible for the narrator to move on, and I feel that moving on after a relationship would be much harder after someone you loved has died than had left you. But that's just what I think.