Cable TV Price War

[rockymtnhigh]

The Tampa Bay Tribune reports that

Cable TV Price War Has Begun

By RICHARD MULLINS The Tampa Tribune

Published: Mar 13, 2007

TAMPA - The cable TV price war has started in the Tampa Bay area.

Verizon Communications plans to announce a $100 package deal today for cable TV, telephone and high-speed Internet service - cutting prices by roughly one-third. Verizon also will allow part-time residents of Florida to "pause" service.

Verizon's new pac
kage mostly matches a $100 per month deal that rival Bright House Networks quietly launched about a month ago and helped tempt nearly 24,000 telephone customers away from Verizon.

That pricing attack and counterattack between rivals represents the first full-scale price fight over cable TV, phone and Internet service in the area.

And it's likely to become fiercer.

"This is going to be the year when the price wars hit," said Jeffrey Kagan, an independent telecommunications analyst in Atlanta. "Right now, Tampa is in the center of it. Customers will have to buy bigger bundles to save money, but when they do, they'll get lower prices and more innovation because both companies want that same customer."

Verizon and Bright House largely have avoided slashing prices to retain customers or tempt customers to switch.

Since Verizon first entered parts of the market with cable TV in December 2005, both Verizon and Bright House have said they hope to compete on service and quality. Except for rare instances, neither company promotes cash rebates or months of free service for switching.

That caution largely ends today.

Verizon's deal carefully is targeted to bring customers back from Bright House or to entice customers to upgrade to the company's new fiber optic network called FiOS. For example, Verizon is cutting some long-distance calling prices by half, just for new customers or those people who return from Bright House.

"This option, like the others, shows we are serious about keeping customers, winning customers back," Verizon Southeast region President Alan Ciampocero said in a statement Monday.

And for people who live in Florida only part of the year, Verizon for the first time is offering a way to pause service for up to six months at no cost. Before, customers had to keep paying their monthly bill even if they lived elsewhere part of the year.

Bright House and Verizon both consider those traveling customers prime targets for switching because traveling customers had to cancel and restart service and were likely to shop around for a better deal each year.

As with many telecommunications deals, there are caveats. Verizon's offer only is available to customers in neighborhoods where Verizon has finished construction of its fiber optic network. The price change should not affect prices of premium TV channels such as HBO or Showtime. And Verizon said the $100 price is set for 12 months. After that, current pricing would go into effect.

Overall, Kagan said, $100 packages like these in competitive markets can save customers 30 percent to 50 percent compared with buying those services separately in a market with no competition.

Meanwhile, Bright House has won some initial battles in this new phase of competition. Spokesman Joe Durkin said Bright House recruited just fewer than 24,000 telephone customers from Verizon in February by signing them up for package deals. That signup pace remained steady during the first two weeks of March, Durkin said.

Florida is among the most closely watched markets because Verizon made this market one of the first to begin construction of a fiber network that could carry telephone, cable TV and high-speed Internet service directly into homes. This year, Verizon could complete the vast majority of its new network in the area.

Verizon specifically is under pressure to build its fiber optic network quickly because the company is spending billions of dollars on the fiber construction project nationwide and investors are focusing on signs of a payoff from that investment.

Reporter Richard Mullins can be reached at rmullins@tampatrib.com or (813) 259-7919.

 

[stevenl]

This will be bloody and fun. Verizon is betting the house on its FiOS service, the cable companies have been building up huge cash reserves, while verizon is spending huge cash. Now its just a matter of who can handle more debt.

 

[iceturkee]

from what i hear steve, verizon's service is much better than bhn's. i fully expect you guys to lose customers.

 

[Khandurian]

That always happens when a new service comes into play. They always seem to come back though.

With satellite, it was easy, we just waited for the rainy season. However, with verizon, it's gonna be tricker.

As steve said, it's gonna be bloody, and fun all at the same time. As I said in another post, it's gonna be an interesting 2 years here in Florida.

 

[stevenl]

iceturke define better? From a technical standpoint their system is capable of handling more then ours in its current state. However its extremely more costly to operate and maintain if their are problems. So their profit margin is gonna be alot lower then ours if they want to compete with price they will be the ones loseing as they go deeper in the red. Price wars dont benefit any company except the market shareholder, As we maintain our profit they lose profits trying to get our customers. The people who leave for verizon are 3 types 1. Your tech nerds who thinkg OMG FIBER TO MY HOME i want 30MBS internet (id be that person) 2. People who are mad at BHN for whatever reason and 3. people who are price shoppers.

Studies show though people who buy bundles dont usally switch for price. To much hassle they only will switch when they become #2 mad at bhn. and in areas where bhn and verizon already compete BHN is still gaining more customers from verizon then verizon is takeing from bhn,

 

[iceturkee]

from i hear, their pq is as good as over the air. sure, no one service is perfect....you have to choose what you want and find the service that best suits your needs.

 

[stevenl]

from i hear, their pq is as good as over the air. sure, no one service is perfect....you have to choose what you want and find the service that best suits your needs.

Ya, everyone has the one thats right for them. Ive been to house that rave over our PQ, and then ive been to houses that Rave over the DBS PQ.. Its all relative..

TV Service is like Soda... Coke or pepsi. They both wet your throat and you could argue all day which tasted better

 

[korsjs]

Ya, everyone has the one thats right for them. Ive been to house that rave over our PQ, and then ive been to houses that Rave over the DBS PQ.. Its all relative..

TV Service is like Soda... Coke or pepsi. They both wet your throat and you could argue all day which tasted better

my wife who knows nothing about picture quality comments on how much better fios pq is than brighthouse. picture quality is big for me. brighthouse is free with our home owners fee and i still chose verizon because of the picture quality. it is that much better.

i think the majority of people satisfied with brighthouse picture quality is because they do not know there is something better. they are so use to the crappy analog and digital feeds that when they do get hd with brighthouse they are in heaven. when they see fios, there is a wow factor on regular non hd channels.

 

[iceturkee]

i'll say that i think bhn hd pq is better than d*! but more sports are in hd at d*......so guess what yours truly now has? i do think i would switch to fios in a heartbeat, if i had that option!!!!!

 

[Khandurian]

iceturke define better? From a technical standpoint their system is capable of handling more then ours in its current state. However its extremely more costly to operate and maintain if their are problems. So their profit margin is gonna be alot lower then ours if they want to compete with price they will be the ones loseing as they go deeper in the red. Price wars dont benefit any company except the market shareholder, As we maintain our profit they lose profits trying to get our customers. The people who leave for verizon are 3 types 1. Your tech nerds who thinkg OMG FIBER TO MY HOME i want 30MBS internet (id be that person) 2. People who are mad at BHN for whatever reason and 3. people who are price shoppers.

Studies show though people who buy bundles dont usally switch for price. To much hassle they only will switch when they become #2 mad at bhn. and in areas where bhn and verizon already compete BHN is still gaining more customers from verizon then verizon is takeing from bhn,

Put me down for option 1 please!!!

 

[LonghornXP]

I believe it doesn't matter how much bandwidth a company has and its much more about how that bandwidth is used. A company can have twice as much bandwidth as another company but if they don't use that extra bandwidth to offer more does it really make any difference. So for me I don't care that BHN says we are the fiber leader as I only care about what they are offering me. Actions speak much better than words don't they.

 

[iceturkee]

you're right about that, longhorn!

 

[stevenl]

seconded...

 

[casper04]

well....unfortunately even though i work for the company I will be happy to see some competition, It will not only be better for the customers, employees may see a positive effect. There are certain things I like about the company and a few others I don't. So, what I think is going to happen if all of this goes through is BHN will not only lose customers but also employees, then they'll have to straighten a few things out in order to keep ppl from leaving.

Just my opinion...

 

[stevenl]

well....unfortunately even though i work for the company I will be happy to see some competition, It will not only be better for the customers, employees may see a positive effect. There are certain things I like about the company and a few others I don't. So, what I think is going to happen if all of this goes through is BHN will not only lose customers but also employees, then they'll have to straighten a few things out in order to keep ppl from leaving.

Just my opinion...

A exodus happend in tampa when Verizon started hireing alot of people.. But to them I say see ya. You ahve to do whats best for you and your family if you leave, that just means more room for me to move up.