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Verizon Tackles Cable Rivals, Offering Six Months of Free DSL


01/09/2008

Verizon Communications, which lost 133,000 DSL subscriptions in the second quarter as existing customers upgraded to its FiOS network and new broadband users were largely snapped up by cable, is trying to breath new life into its most popular internet offering with a competitive promotional offer.

Until the end of October, Verizon will offer its DSL services (which normally range in price from $19.99/month for 768-kbps of downstream bandwidth to $42.99/month for 7.1-Mbps) free for the first six months to customers who sign a one-year contract and use the company’s landline phone service.

This special offer is available to some 33 million households in 24 U.S. states, or approximately 80% of Verizon’s residential service footprint.

Pali Research analyst, Rich Greenfield, called attention to the promo last week in a research note entitled: “DSL So Bad, It’s Now Free For Six Months.”

“We suspect the aggressive promotion is being driven by a weak start to Q3 DSL net adds (which could bode well for cable stocks near-term), with a goal of regaining market share in Q4 and into 2009,” Greenfield wrote, noting that “Verizon is clearly not giving up, as evidenced by these price cuts.”



 

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