SBC Offering More for Less � and Faster

Friday Apr 2nd 2004 by internetnews.com Staff
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The SBC Yahoo! deal could put pressure on other voice and data providers that bundle content and premium services into monthly broadband offerings — or could be seen as a response competitors' pricing pressure.

SBC has dropped prices on its SBC Yahoo! co-branded broadband service. SBC is offering customers a discount on its broadband service, when purchased with a bundle of local, long distance and wireless services. For $36.99, consumers can add SBC Yahoo! DSL to their mix of wired and wireless communication services. At download speeds of between 1.5 megabits per second to 3 megabits per second, the new service plan also offers twice the download speeds of its current DSL service.

SBC said if the service is ordered online or as part of a qualifying bundle of SBC services, home office customers can receive the higher speed SBC Yahoo! DSL for $39.99 a month. When purchased separately with a one-year term commitment, small businesses can tap into the service for $44.99 per month — although there's always a catch, and in this case, the company said, other monthly charges may apply.

In addition, the SBC Yahoo! package offers rich content, a customized portal, and other premium services along with safety and security features such as anti-virus protection, firewall, anti-spam tools and a parental controls package.

The deal could put pressure on providers which bundle content and premium services into monthly broadband offerings — or could be seen as a response to SBC's own competitors' pricing pressure.

SBC's announcement comes on the heels of a recent Verizon promotion offering DSL bundled with MSN Premium, a service that includes the same safety and security features as SBC Yahoo! for $29.95 a month.

Not to be left out, AOL teamed up with Covad Communications last month enabling customers to purchase a simple DSL connection with a connection speed up to 1.5 MBPS for $34.95 a month, along with access to exclusive AOL content for an additional $14.95 per month.

In addition, Broadband over Power Lines is inching into the market with further competition in an increasingly crowded market. Just last month Cinergy Broadband joined forces with Current Communications to offer a service is sold in three tiers: $29.95, $34.95 and $39.95. Cinergy spokesman Steve Brash said the mid-tier offering provides speeds on par with cable and DSL broadband offerings.

The news is clearly good for consumers, said JupiterResearch analyst Joe Laszlo. But he said broadband providers need to compete on more than price alone.

When broadband providers build customer bases from numbers in the hundreds of thousands to numbers in the millions, network owners can begin to take advantage of the economy of scale they achieve and offer lower prices to consumers, he said. But "the last thing broadband providers want is to become a commodity service where consumers shop on price alone."

Right now, the best add-on that providers can offer, he added, are firewalls as part of standard services in order to address customers' growing security concerns with always-on high-speed connections.

Adapted from internetnews.com.

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