Verizon Cuts Pricing on DSL Packages

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Verizon Communications, after suffering net losses in its digital subscriber line business for two straight quarters, is renewing its focus on the segment by cutting pricing on its DSL, phone and DirecTV service bundles as well as expanding the availability of its fastest DSL tier.


The moves are designed to slow the defection of DSL users to cable. Despite Verizon’s aggressive push behind FiOS Internet and TV services, DSL remains its most widely deployed broadband service, available to about 25 million households nationwide compared with 9.1 million for FiOS Internet.


Verizon is introducing an entry-level triple play with 1-Mbps DSL, phone and DirecTV service with 150 channels for $79.99 per month and dropping prices of its other DSL-based bundles by up to $18 per month.


In addition, Verizon said its top-speed DSL tier -- with downloads up to 7.1 Mbps -- is now available to 6.6 million households nationwide compared with 3.4 million in mid-June. 


Verizon positioned the promotional pricing and renewed focus on DSL as catering to value-conscious consumers facing economic uncertainty.

"In strained economic times, maintaining a high-speed Internet connection remains at the top of consumers' discretionary spending lists," Verizon vice president of consumer product management Susan Retta said, in a prepared statement.


The telco boosted the speeds of its entry-level DSL Internet service to 1 Mbps downstream and 384 Kbps upstream, up from 768 Kbps/128 Kbps, and is offering the service for $9.99 per month for the first six months with a one-year contract. After the six-month promotional period monthly pricing for the remainder of the annual plan will range between $19.99 and $25.99 depending on the market.


While Verizon has delivered solid growth in its FiOS service -- after investing billions building out and marketing the high-capacity fiber-to-the-premises network -- its DSL and traditional landline businesses have deteriorated. In the second and third quarters of 2008, the company reported a net decrease of 133,000 and 96,000 DSL subscribers respectively. 


As of the end of the third quarter, Verizon had approximately 6.3 million DSL subscribers, compared with 6.7 million a year prior. The company had 2.2 million FiOS Internet customers as of Sept. 30, versus 1.3 million in the same period last year. Verizon noted that a certain number of DSL-based Internet customers have adopted FiOS. 


Verizon said the new DSL-based bundles mark the first time it has offered standardized packages nationwide that are priced the same regardless of state.


Moreover, the telco said it is the first time it is offering bundles with “Freedom Value” voice service, which provides only unlimited local and long-distance excluding calling features such as caller ID, call waiting and voice mail.


Verizon’s two new entry-level double plays are: 1-Mbps DSL plus Freedom Value voice service for $49.99 per month, and the 150-channel DirecTV tier with Freedom Value for $64.99 per month.

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