February 14, 2000 4:20 PM PST
SBC lowers rates, waives start-up fees in promotion
SBC, which services a wide swath of territory across the Midwest, Southwest and California, hopes to generate further interest in the burgeoning market for high-speed Net connections using digital subscriber line (DSL) technology.
The deal, which SBC's Internet services unit will offer through April 30, will cost $39.95 for basic digital subscriber line (DSL) service for new and existing customers. The service typically costs $49.95 per month. SBC also estimates consumers will save about $300 on installation and equipment costs under the promotion.
The offer is the latest sign that the Baby Bells are anxious to lure customers to their new, higher-profit margin services before competitors such as cable modem, wireless or satellite technologies snare a significant portion of the market.
DSL uses standard phone lines to deliver Internet content at much faster rates than dial-up modems and is one of the primary technologies for delivering high-speed Net access. Alternatives based on cable networks have an early lead, however.
"Generally they'll lose money on the (free) installation. But it's a race to the customer, to get them signed up now to fend off pending cable competition," said Beth Gage, director at TeleChoice, a communications industry consulting firm. "Once (consumers) get on and start using it, it's going to take more than saving a couple of dollars a month to switch providers."
Analysts said SBC and US West are ahead of the pack in terms of DSL deployment.
TeleChoice estimates there were 500,000 DSL lines in service in North America by the end of 1999. SBC, which operates local phone companies such as Pacific Bell, Ameritech, Southwestern Bell and Nevada Bell, had 169,000 DSL lines at the end of 1999 and claims more than 200,000 today.
The company is currently adding about 1,200 new DSL customers per day, according to a spokeswoman.
SBC last year announced a $6 billion effort to offer DSL services. The so-called Project Pronto aspires to make DSL available to 80 percent of SBC's customers by 2002. More than 12 million homes and businesses served by SBC can receive DSL currently.
SBC also plans to waive equipment and installation fees for its "premium" DSL service, which offers even higher data transfer speeds.
Analysts said the temporary DSL promotions are nothing new--US West and GTE have made similar offers--but they expect to see more deals periodically.
"In general I think the service pricing is about as low as they can take it for a while," Gage said.