February 3, 2004 11:33 AM PST
SBC changes DSL pricing
The nation's second largest local phone company launched new promotions for its digital subscriber line service that temporarily lower prices for its higher-speed plans. SBC said it will let people subscribe to speeds of between 384kbps and 1.5mbps for $34.95 a month; and $44.99 a month for downloads speeds of between 1.5 mbps and 3.0 mbps. Previously, these plans cost $64.95 and $99.95 a month, respectively. SBC will also let people pay $29.95 a month for speeds between 384kbps and 1.5mbps if they sign up online or subscribe to its satellite partnership with EchoStar Communications.
An SBC representative said the 384kbps-to-1.5mbps deal will cost $49.95 per month after the one-year promotional term expires. The 1.5mbps-to-3mbps deal will remain at $44.99 on a month-to-month basis after the first year. SBC currently offers its DSL service as a co-branded product with Yahoo.
Conversely, SBC added more restrictions for its cheaper, but slower, DSL tiers. For download speeds of up to 384kbps, SBC raised its one-year promotional price from $26.95 to $29.95. However, people who subscribe to SBC's local, long-distance and Cingular wireless services are eligible for the $26.95 a month promotion.
The SBC cuts highlight a trend of aggressive broadband pricing among Baby Bells such as Verizon Communications, BellSouth and Qwest Communications International. These local phone giants face an uphill battle against cable companies, which dominate the market for home broadband access. At the end of the third quarter, cable modem providers accounted for 64 percent of the U.S. household broadband market, compared with the 36 percent owned by DSL providers.
Cable companies such as Comcast, Cox Communications and Time Warner Cable have been offering broadband speeds of up to 3mbps since last summer. These services charge between $45 and $50 a month and have not succumbed to the temptation of lowering prices to battle DSL.
So far, the Bells' strategy of offering lower-priced DSL has helped companies such as SBC add more subscribers. Last quarter, SBC added 378,000 new DSL subscribers, up from the 365,000 it added in the quarter before.