Verizon targets cable bundles with 'Mix & Match' TV and broadband services

Verizon
Verizon's new broadband and TV offerings take aim at the cable industry's traditional bundles of voice, video and broadband. (Monica Alleven/FierceWireless)

Verizon is bidding the traditional triple play bundle adieu with its new "Mix & Match on Fios" pricing that allows customers to pick customized options with lower price points.

Verizon took direct aim at cable operators with Thursday's Mix & Match announcement. In addition to letting customers choose their TV and broadband offerings, Verizon also eliminated the annual contracts that traditionally were included in the triple bundles of voice, video and broadband.

While those contracts gave subscribers an initial price break, the monthly costs often went up after a short period of time, which led to subscriber churn.

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“Customers have been loud and clear about their frustrations with cable, and we’ve listened. As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency,” said Verizon's Frank Boulben, senior vice president of consumer marketing and products at Verizon. “Customers are tired of having to buy a bundle with services they don’t want to get the best rates, and then discover that those rates didn’t include extra fees and surcharges. We’re putting an end to the traditional bundle contract and putting customers in control.”

Verizon is betting that Mix & Match will jump start its broadband take rate. In October's third quarter earnings, Verizon's Fios internet's net additions of 30,000 were relatively flat sequentially and down year-over-year. During the third quarter earnings call, chief financial officer Matthew Ellis gave a preview of the new customized offerings for TV and broadband.

"Our customers see value in our high-quality broadband offering paired with multiple choices for video through linear TV bundles or over-the-top options, such as YouTube TV and the recently announced Disney+," he said, according to a Seeking Alpha transcript.

The Mix & Match strategy includes customized options for pay TV and broadband services. Under a deal signed last year with Google, Verizon is offering YouTube TV, with more than 70 channels, for $50 a month along with a one-month free preview. 

The entry-level "Your FiosTV" offering also costs $50 per month, and allows subscribers to pick their five favorite channels from a list of 200. Verizon will also recommend a package of about 125 channels. Your FiosTV costs $50 per month, along with a $12 monthly fee for each set-top box.

"More FiosTV" gives customers more than 300 channels, including more live sports, news, movies and original entertainment. More FiosTV costs $70 per month and comes with one free set-top box.

Most FiosTV comes with more than 425 channels, costs $90 per month, includes a set-top box and a $12 DVR service credit.

All of Verizon's new TV plans include local broadcast networks, such as ABC, CBS, NBC, Fox, Telemundo, and Univision.

To top off the video offerings, Verizon is offering a Fios TV Test Drive option for $50 per month for 60 days that includes all of its channels. Based on subscribers' viewing habits, Verizon will recommend a plan at the end of the test drive.

For broadband, Verizon has three options: 100 Mbps, which costs $39.99 per month, 300 Mbps ($59.99) and a gigabit connection ($79.99.) As an added perk, Verizon is offering new Fios broadband customers one free year of Disney+. On the voice side, Verizon is offering an unlimited phone service for $20 per month.

New and existing Fios customers can switch over to the Mix & Match plans at anytime, and switch between services without incurring penalties. Verizon Mix & Match subscribers can also cancel their services without early termination fees.

RELATED: Wireline broadband growth eases as residential connections approach 99 million homes—report

For broadband, growth in telco fiber-to-the-home connections hasn't been able to overcome losses to legacy copper and fiber-to-the-node DSL connections. By allowing customers to pick and choose their TV and broadband options, Verizon is hoping to prop up its broadband numbers while offsetting some of its cord cutting losses. In the third quarter, Verizon lost 67,000 Fios video customers.

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