Frontier jacks up standalone broadband, FiOS video pricing by $5 a month
Frontier has increased the price of its standalone DSL service by $5 a month from $29.99 to $34.99. Customers who subscribe to Frontier's basic 6 Mbps Simply Broadband service will still be able to pay the $29.99 a month price, while new customers will have to pay the higher $34.99 rate.
"On May 1st, we increased the price of our Simply Broadband product from $29.99 to $34.99, which better reflects the value of that offering, given the robust capability of our network and of the comparable pricing from our competitors," said Maggie Wilderotter, chairwoman and CEO, during the company's first-quarter earnings call.
Wilderotter added that it increased the price of its FiOS TV service due to "rising annual content fees."
Broadband service overall was a major factor in Frontier's first-quarter 2014 results. During the quarter, the service provider added 37,200 new subscribers, ending the period with a total of 1.9 million customers.
The service provider has been moving to increase the speeds of its broadband offerings. According to Frontier, 74 percent of its customers can get access to a 12 Mbps connection, while 61 percent can get 20 Mbps or higher and 83 percent can get 6 Mbps connection.
By comparison, its cable competitors like Time Warner Cable (NYSE: TWC) can deliver speeds of 50, 100 Mbps and above in various parts of its serving territory. They have also been having some success with their low-end 2 Mbps $15 a month broadband package.
Interestingly, Frontier says that speed isn't a top priority for the customers it serves, the majority of whom reside in rural areas. Dan McCarthy, president and COO of Frontier, said during the earnings call that less than 20 percent of its broadband customers use a 6 Mbps connection.
"Quite frankly we've had focus groups with our customers and potential customers [...] and what they say is that they don't really know what speed they have," McCarthy said. "They just need enough and that's really what it's about — providing a good quality product that's reliable and gives them the speed that they need. It's not necessarily a 60 Mbps connection that they're really never going to use."
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