SBC Communications, the second-largest U.S. telecommunications company, plans to cut the cost of DSL by 25 percent.
SBC said on Wednesday it would offer broadband service for $14.95 per month to new customers who sign up online, $5 less than its previous lowest price. The deal, which requires a one-year contract, makes SBC competitive with many dial-up Internet services and is among the lowest prices for broadband in the United States.
Of course there are a few provisions; mandatory local phone, 1 year contract, new account and a few hidden fees. The limited-time-only price applys with a 12-month term for new residential subscribers who order SBC Yahoo! DSL Express (384Kbps 1.5 Mbps) service online. The SBC Yahoo! DSL Pro (1.5Mbps 3.0Mbps) service is available for $24.99 a month for 12 months if they order online (other monthly charges apply). SBC local service and one-year term is required with a $200 early termination fee.
Executives at SBC say they have a two- to three-year window to add as many digital subscriber lines as possible, before cable companies complete their rollout of telephone services and pursue SBC customers with voice, video and data packages.
“It’s about market share,” said SBC Chairman and Chief Executive Edward Whitacre in an interview last Thursday with Reuters. “The sooner we get there and the bigger piece of market we get, the better off we are. It’s essentially us and the cable companies vying for that.”
SBC added 504,000 DSL lines in the first quarter of this year, a record increase for the company, but Whitacre had asked executives if it was possible to add 1 million a quarter, a level he says is probably not realistic today.
While its first-quarter growth was a record, SBC’s 5.6 million DSL lines are equal to about 11 percent of its total phone lines.
“What we find is if you sell DSL, the customer just doesn’t churn,” said SBC Chief Operating Officer Randall Stephenson. “Once you get them, you’ve got them,” Stephenson added. “It’s very important to us to get out ahead of the game and get broadband deployed to every household we can get it deployed in.”
Cable companies hold about 59 percent of the U.S. broadband market, due to an earlier start in launching high-speed Internet services to consumers. But telephone companies have been closing the gap over the past year, using lower prices and bundled discounts to add more broadband customers.
