| Price rises cost Verizon 107K DSL subs |
| Written by Dave Burstein |
 FiOS grew 153K, lousy when you consider they are opening for sale 700K additional homes every quarter. Some of those are DSL conversions, while in non-FiOS areas Verizon is significantly losing DSL customers. "You've raised prices for FiOS and some of the low-end DSL stuff," Bank of America noted in the investor call. Chris King adds, "subscriber growth continues to slow as the company has placed a renewed emphasis on profitability over market share." Ivan Seidenberg explains why they are taking the short term fix of a price rise. "We do need to balance a little bit of profitability to make sure that where the economy is hurting us that we offset some of that by not being too aggressive on the FiOS side." That's me on the left asking Ivan a question about femtocells.
Verizon and AT&T have raised basic DSL prices by a third the last few years, by far the most significant reason people aren't taking broadband. They've just raised wireless data prices by as much as 50% (Pali Research), trying to create a wireless data price cartel as the wireless voice cartel is fraying. I have excellent Verizon mobile voice (via TRACFONE/Telmex) for about $15/month for 150 minutes, which is all I need if I don't make long calls. While serving all the data customers is straining some networks (not Verizon), there is massive overcapacity on mobile voice, with a negligible marginal cost/minute. The overcapacity will only expand as LTE deploys, doubling and quadrupling bandwidth. Ivan explains "As we move into 2011 and we start to get into full deployment of LTE, we're going to get a big, big improvement in terms of our efficiency. And so we are feeling good about that. ... I don't think at this point there's anything to worry about.” Verizon announced another 13K layoffs, bringing the 2008-2010 total over 40,000. |
