News

AT&T to Supply Ops With Broadband Leads

8/22/2004 8:00 PM Eastern

AT&T Corp. last week expanded the rollout of its Internet-based phone service to 21 new markets, and secured marketing agreements with Comcast Corp., Time Warner Cable, Cox Communications Inc. and Charter Communications Inc. to refer customers who need the broadband connections that make the service possible.

AT&T could potentially refer thousands of potential broadband customers to cable, instead of to digital subscriber line providers. At the same time, the cable companies agree not to pitch their own voice-over-Internet protocol phone offerings to customers referred by AT&T.

“Both sides win,” said a Time Warner Cable spokesman, likening the arrangement to the lead generation supplied by Cable Television Laboratories Inc.’s Go2Broadband initiative. Time Warner Cable, of course, is selling its own VoIP service, but won’t in the case of subscribers AT&T sends its way.

“We look it as a retail agreement,” added a Charter spokesman. “If they want to send us subscribers, we’ll take them.”

A spokesman said Comcast plans to offer callers who want AT&T’s VoIP service a six-month offer for high-speed Internet service at download speeds of 3 Megabits per second for $19.99 per month.

AT&T launched VoIP service four months ago, and last week announced 21 more markets: Huntsville, Ala.; Tucson, Ariz.; Colorado Springs; Daytona Beach, Fla.; Augusta, Ga.; Louisville, Ky.; Grand Rapids, Mich.; Akron and Dayton, Ohio; Harrisburg, Pa.; Memphis; El Paso, Texas; Norfolk, Va., and Madison, Wis.

Service expanded in New Orleans and Baton Rouge, La.; Albuquerque, N.M.; Las Vegas; Oklahoma City and Greenville and Columbia, S.C.

The long-distance giant now offers VoIP in 39 states and Washington, D.C., AT&T senior vice president for internet telephony Cathy Martine said in a statement. “That’s 121 major markets since we introduced the service last March.”

The service costs $34.99 a month, but AT&T extended a six-month, $19.99 rate for customers who sign up by Sept. 30.

AT&T also said calling to Canada will now be included in the base local and long-distance calling price. And it introduced an inside-wiring service for residential customers, making it easier for consumers to hook all the phones in the house to an IP connection.

Cable-marketing analyst Bruce Leichtman said problems could arise when introductory offers expire and $19.99 charges rise to $34.95 (for AT&T’s service) or $42.99 (for Comcast’s).

Price-sensitive, late-adopting broadband customers could become “very high churn customers,” he said.

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