Time to be budget-wise, consumer-friendly

The third quarter of 2008 so far has not been as scary as many of us might have anticipated, but while telcos and their competitors continue to add broadband and TV subscribers and paint cautiously optimistic outlooks, macro-economic indicators are pointing toward lower consumer spending in the fourth quarter.

Telecom service providers do not traditionally respond to such trends, but is that behavior changing? Verizon Communications just announced new triple play bundles with pricing it says is designed to provide more value "in a strained economy." The bundles include unlimited local and long-distance calling, broadband Internet access and DirecTV service, all starting at $79.99 per month for a year. The carrier also is offering double-play bundles for $49.99 per month and is telling consumers they can save $15 and $35 per month on bundles, compared with the prices of each individual service.

Verizon suggests in offering these bundles that it feels the anxiety of the average consumer about ongoing economic pressures, but it could be argued that the telco also is looking after its own skin. Broadband subscriber numbers at the cable TV companies came off a little stronger during 3Q than they did at the telcos, and perhaps we will start seeing Verizon and other telcos respond to that trend with new packages and rates.

The fourth quarter might prove to be a good time for service providers to actually listen closely to the economic woes of their customers. Service prices often tend to only come down when a service provider needs a market lift against the competition, but perhaps the service provider who behaves now like it truly does feel consumer pain can lock in consumer loyalty in the long run.

-Dan

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