SILVER SPRING, MD -- 10/17/07 --
For years, cable companies boasted the
fastest residential broadband speeds, allowing them to resist lowering
their prices to match the monthly subscription charges of telephone
companies' digital subscriber lines, or DSL. But that pricing stability
may be changing, according to a new analysis by market research house Pike
& Fischer.
For an expanding number of homes, AT&T and Qwest can better match cable
offerings with downstream speeds up to 7 megabits per second (Mbps). And
with the launch of its fiber-based FiOS service, Verizon now can exceed
cable modem speeds at competitive prices in a growing number of markets.
This represents a significant shift in competitive dynamics, P&F concludes
in its annual review of high-speed Internet marketing and pricing.
For customers signing a contract, FiOS delivers speeds of 5 to 10 Mbps
downstream and 2 Mbps upstream for $40, and 15 to 20 Mbps downstream and 2
to 5 Mbps upstream for $50. Verizon has also begun offering FiOS
"triple-play" service bundles priced below $100. This is forcing cable
operators in FiOS markets to sharply increase data rates without increasing
prices.
Cable companies are also offering discounts for multi-service bundles, as
well as short-term promotional prices as low as $20 per month. In response
to the latter, Qwest and Verizon have introduced "price for life" offers
intended to highlight the short-term nature of cable promotions. These
tactics are likely to increase, according to Mitch Shapiro, author of the
report and contributing analyst to Pike & Fischer's Broadband Advisory
Services.
"As broadband growth comes to rely increasingly on penetrating
price-conscious market segments -- and especially if the nation enters a
serious and prolonged housing slowdown and/or a recession -- the market
could begin to see more significant downward pressure on prices," Shapiro
says.
Pike & Fischer, a BNA company, offers a host of legal and business products
covering the telecommunications industry. This new report, "High-speed
Internet Packaging & Pricing, 4th Edition," is priced at $549 and can be
purchased at www.broadbandadvisoryservices.com. To request analyst
commentary, contact Scott Sleek at 301-562-1530, ext. 291 / ssleek@pf.com.
For information about Pike & Fischer's Broadband Advisory Services, visit
www.broadbandadvisoryservices.com or contact Jonathan Wentworth Ping at
212-576-8741 / jping@pf.com.
Contacts:
Scott Sleek
301-562-1530, ext. 291
Email Contact
Jonathan Wentworth Ping
212-576-8741
Email Contact
