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Summary:

For second consecutive quarter BellSouth defied the industry trend of bargain DSL connections, adding more premium DSL subscribers than ever before. The company added 263,000 new DSL lines, of which a whopping 80% opted for the two highest speed (3 Mbps and 6 Mbps) offerings. As […]

For second consecutive quarter BellSouth defied the industry trend of bargain DSL connections, adding more premium DSL subscribers than ever before. The company added 263,000 new DSL lines, of which a whopping 80% opted for the two highest speed (3 Mbps and 6 Mbps) offerings. As a result the DSL margins improved, theorize the analysts from UBS. At the end of the first quarter 2006, they had about 3.1 million broadband subscribers. Cynthia has the full lowdown on the earnings.

It is increasingly obvious that the Bells should stop fooling around with television and instead focus on selling bandwidth…. a lot of it, for a premium price and make their numbers accordingly. It is a trend that is spreading across the world, and it should be the best defense against the cable companies. The problem is that instead of getting faster pipes rolled out, the phone companies are mucking around with television stuff, which is harder and more expensive, giving cable companies a chance to pick-up voice customers.

  1. The Bells TV strategy is an offshoot of their main strategy- that is rolling out fiber as fast and as economically as possible. So they do have the broadband and bandwidth angle covered too. Having a video offering is not an option but a necessity in the quad-play age.

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  2. if the dumb Slow Bells could figure out the MORE DSL customers they have , the less Skibare can pick off their phone lines…DUH??????

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  3. “The Bells TV strategy is an offshoot of their main strategy- that is rolling out fiber as fast and as economically as possible. So they do have the broadband and bandwidth angle covered too. Having a video offering is not an option but a necessity in the quad-play age”

    In the fantasy land inhabited by cable & telco execs, perhaps. Recent stats indicate only 6% of Time Warner Cable customers bundle all three services, and something like 60% still only get cable TV.

    I know the dream is to have everyone bundling 4 services for $200 bills, but I think that’s cable/telco exec fantasy.

    There is a flood of video options coming, and the future consists of users picking and choosing what they want. (One season of HBO’s deadwood please) Likewise if you believe decent voice will someday be free (I do), the quad-play vision just doesn’t have staying power.

    I think the logical progression is for Telcos to admit they should just be dumb-pipe providers and do that one thing well. Instead of AT&T’s half-assed project of VDSL with 25Mbps that can barely handle multi HD streams AND future bandwidth competition.

    One pipe, just bandwidth, let me pick what I want from a flurry of emerging options. They will fight the dumb pipe identity to the last (see net-neutrality, prioritization), but I think it’s a dying battle. Users will hopefully be smart enough to realize they can get more, for less, elsewhere…

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  4. I disagree. Being the pipe owner isn’t that great of a business. Cable can do it just as well (better, really)- and they have video on top of that. The pipe and the phone services are sidelines- tv is where the money is.

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  5. “I disagree. Being the pipe owner isn’t that great of a business.”

    I didn’t say it was great to be a dumb pipe provider, but that it was inevitable, at least for telcos. It’s a bad time to be getting into the TV business. Their focus should be wireless (3G), landline or VoIP (for as long as it can be milked) and VDSL or fiber bundles and that’s it.

    The TV business is about to get very ugly with the entrance of everyone and their mother…why bother.

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  6. I agree, the margins are in the big pipes (to include 1-2Mbps Symmetrical) but I do believe that offering a 256Kbps service package at $14.95 to capture market share does anything but take up capacity on the same link that could be delivering a high margin 2-3Mbps link. In short stop competing with the MSO and get on with your own business model.
    Telco deploying TV programming: I agree with the analysts who are saying that an IPTV solution over a VDSL of ADSL2 link will struggle to compete with the Cable folks. If these Telco folks are serious about offering true Cable quality programming they need to invest in a real headend and deploy a APON solution (MPEG2/4) based solution instead of trying to force HD type quality video over an IP banckbone.
    Telco should focus on providing high quality high bandwidth Wired and Wireless (Metro-Mesh) solutions and focusing on the distributing high quality streaming video from Locally Cached Video Servers (updated hourly by content providers)
    Also, lets get away from the RealPlayer/MediaPlayer 1/4 screen marginal videos we are forced to watch deployed from these centrally managed national Centers.

    The key to all these businesses is to deploy content as close to the consumer as possible in order to provide the latency/jitter free services. Watch what happens with Video and MutliPlayer Gaming demands when we can deliver them over a Last Mile Link (Wired/Wireless) from a Local distribution Center.

    Jacomo

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