The US has always been a stronghold for cable modems and up until last year it outsold DSL two-to-one. This makes it all the more surprising to hear from Reuters that DSL has, for the first time, sold more high-speed Internet connections than cable providers.
Feeling threatened by the rise of VoIP (Voice over IP), that could enable cable-customers to discard their phone lines while keeping phone services, the telephone companies are undergoing a big push to try to ensure that their phone customers stay with them. “The bundle with DSL is incredibly sticky, more so than even long distance,” Verizon Chief Financial Officer Doreen Toben told Reuters. “If you can get DSL into the bundle, the customer will not leave you.”
SBC, one of the four ‘Baby Bells’, is finding price a big determinant in converting and keeping customers on high-speed access. “When you’re selling this at $45, a customer buys it and gets his first bill and panics and cancels,” their Chief Operating Officer Randall Stephenson told analysts last week. “When you’re selling it at $30, you have much less of that.” All of this is good for the US consumer, in the short term at least.