Verizon's (NYSE:VZ) move to allow its customers to try FiOS for a month and not penalizing them if they switch is a realization that consumers want the freedom see what actually fits their own needs.
Much like it did in its Tampa, Fla. market, Verizon is finding that in order to woo over more customers away from satellite and cable it will need more than a fiber connection. It needs to offer not only month-by-month options, but guaranteed price assurance.
Of course, the new offer isn't without a risk. Given the $1,350 it takes to install FiOS at a customer's home, there's the obvious risk that Verizon could lose a great deal of money if many customers decided to switch off the service. However, if the majority of customers that sign up for the new option stay with Verizon, it could prompt both major cable MSOs--Comcast (NasdaqGS: CMCSA) and Cablevision (NYSE: CVC)--and satellite providers DirecTV (NasdaqGS: DTV) and DISH (NasdaqGS: DISH) to follow up with similar offers.
Although eliminating early termination fees is not a standard practice in the pay-TV market, Matt Davis, research firm IDC said Verizon's move signifies "a growing trend" by cable and telcos to stay competitive by offering more flexible contracts. "Verizon's reacting to that trend, trying to stay slightly ahead of it," he said in a Reuter's article.
- Reuters covers the new option
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