Verizon (NYSE: VZ) is once again trying to lure new subscribers to its DSL service to compete with cable by eliminating contract fees and simplifying their bundle packages.
Looking to simplify its pricing to retain and increase its DSL base, Verizon says the new non-contract and HSI speed tiers are all about simplifying its copper-based bundled offerings. This follows a move by Verizon to eliminate contracts on its FiOS Fiber to the Premises (FTTP)-based service last year.
"We had a number of short-term two to three month promotional offers, and I think customers were always waiting for the next thing, so we decided to remove those promotions and come up with simple, everyday low pricing similar to Wal-Mart," said Rick Yorra, manager of national consumer market strategy, Verizon.
Under the new simplified plan, Verizon will offer two initial double-play DSL service pricing tiers: Basic HSI and Enhanced HSI.
Offering speeds of 500 Kbps to 1 Mbps for everyday Internet activity such as sending e-mails and online shopping, the basic HSI bundle tier includes one of two unlimited local and long-distance voice services for $34.99 a month.
The Enhanced HSI offering offers a wider range of DSL speeds from as low as 1.1 Mbps up to 15 Mbps. Of course, available speeds depend on how far away a particular customer is from the nearest Central Office (CO) for $59.99 a month.
However, pricing for any speed purchased on the Enhanced HSI tier will be the same.
"If we do a loop qualification on your phone line for DSL and you qualify for 15 Mbps, we'll give you 15 Mbps, but it will be the same price point if you could only get 3 Mbps," Yorra said. "Prior to this new offering, there was a premium if you purchased 7 Mbps and another premium for 15 Mbps, but we know that customers want the fastest speed and felt we don't want them to pay a premium for that."
Customers can then add DirecTV (Nasdaq: DTV), which does require their own separate 2-year contract, to their bundle. The initial DirecTV offering is priced at $25, with the option to purchase additional features such as DVR service and Choice Ultimate with DVR and HD for an additional $39 and $47, respectively.
Given the ongoing battles Verizon is facing from cable operators like Comcast (Nasdaq: CMCSA), which now offers its 105 Mbps DOCSIS 3.0 service in nine markets, Verizon needs a simplified pricing as a competitive weapon.
- see the release
Verizon eliminates contracts for FiOS Tampa subscribers
Verizon lets customers try FiOS on for size