|
Spring may still be months away, but DSL service discounting seems seem to be blossoming among the incumbent Bell operators during the first quarter. All of the RBOCs are dangling special offers in front of prospective high-speed customers, ranging from computer discounts to waived installation and activation fees, free modems and even free digital cameras.
SBC Communications Inc., the RBOC leader in DSL customer base, has several special deals going. A continuing promotion with Compaq Corp. offers computer buyers up to a $500 discount on three models of DSL-equipped Presario PCs if they also order SBC's Basic High-Speed DSL Internet Service with Prodigy ISP service for $49.95 monthly. SBC also has dropped the one-year service contract requirement.
For customers who don't buy a Compaq computer, SBC is offering the $200 DSL modem for $99. Customers who sign a one-year service contract get the modem free, and those who sign up for service online have their $50 provisioning fee waived.
The SBC $49.95 monthly charge signals the end of the promotional $39.95 charge begun in February 2000 to align with competitive cable carriers. SBC spokesman Kevin Belgrade says that promotion had run its course, and the new set of lures is designed to offer customers more choices.
"This is really just the end to that promotion and the start of another," he says. "We continually hear from customers that the more choices we can offer, the better."
Part of that choice includes expanding the Compaq promotion from the original one computer model to three. Dropping the yearly commitment also gives the customers more flexibility, he adds.
Fellow RBOC Qwest Communications International Inc. is similarly rolling out New Year deals, offering residential customers who sign up for DSL Select or DSL Deluxe service by March 31, 60 days of free service, a waiver for the $69 activation fee and a $100 modem rebate. Monthly charges are $19.95 for Select service--which requires the user to "log on" for their DSL connection--and $29.95 for Deluxe. Monthly ISP service also is required, and prices vary among providers. Qwest's own ISP service costs $17.95 monthly.
BellSouth Corp., meanwhile, has a trio of promotional offers through April 1: two months for the price of one for its residential FastAccess DSL service; a free modem if the customer activates service within 60 days of ordering and keeps the service for a year; and for customers who sign up online, a $25 Web certificate good at an online shopping portal that takes MasterCard or Visa.
Customers who choose the bundled Complete Choice voice and DSL package get their high-speed service for $40 per month, including ISP. Without the bundled service, DSL costs $49.95 monthly. The one-time $99.95 activation and $150 installation fees are waived if customers choose to install the modem themselves.
Verizon Inc. will be aligning pricing and DSL packages between its Bell Atlantic and GTE territories some time in the first quarter, according to a spokesman. For now, the RBOC is offering a $39.95 residential DSL package for one year of service with a flock of special offers. Through March 31, Verizon is offering new customers in its Bell Atlantic territories a free modem, 30 days of free service, waived activation and installation charges and a free digital camera. In the former GTE territories the basic DSL residential package is offered for $32.50 monthly for a one-year service contract, with additional charges for ISP. Customers who sign up before Oct. 31 will receive a free modem.
Despite SBC discontinuing its $39.95 introductory promotion, the trend in coming years will likely be downward as the underlying costs to deploy DSL continue to fall, according to Dylan Brooks, a telecommunications analyst for Jupiter Research. In the near term, however, the implosion of the competitive "whatever it takes to get a new subscriber" DSL market will likely prompt a more reasoned pricing strategy that keeps profitability in mind.
For that reason, Brooks predicts fewer cut-rate introductory offers as RBOCs such as SBC roll out service in new markets.
"Right now we are seeing a little rationalization around DSL pricing, to get the margins down to at least an equal level as that of dialup access," he notes. "Its sustained growth at realistic price points. That being said, a $50 price point won't be driving demand in established markets."
|
