Three Things…. DSL, Comcast & Vongo

No, I have not gone on vacation. Instead, I am busy writing the next cover story for the magazine, along with a couple of other short pieces, and am horribly late. So posting is going to be light for a couple of days. And if I haven’t answered your email, don’t take it personally – there are 600 messages that have piled up in just day. Still, couple of things which have been sitting in my inbox and are worth sharing.

* Future of The Bells Is DSL

Did anyone notice that AT&T introduced a three tier DSL pricing structure and are now offering a 6 megabits per second connection for $28 a month. (1.5 Mbps and 3 Mbps cost $13 and $18 a month respectively.) That’s twice as much as what BellSouth is charging for the same speeds. In other words, either AT&T will raise its prices after the deal with BellSouth closes or BellSouth will drop the prices.

Nonetheless, BellSouth added a record 263,000 DSL net adds in the first quarter equating, while AT&T added 511,000 new DSL users for the same period.

John Hodulik of UBS thinks that while voice might be making them the most money, it is DSL which is strategically more important and is now the “anchor product of the consumer bundle.” In other words, it is going to be the proxy for their future (residential) market share.

* The New Vongo Boys

Talking about the new Ma Bell, AT&T will soon start offering “Vongo” Internet movie-delivery service to its DSL customers. The companies will feature a co-branded AT&T and Vongo Web site and special promotions. Vongo works only on Windows-PC and costs about $10 for unlimited access. PPV is $4 a month. First Akimbo, and now Vongo, I tell you that either someone is having a change of heart over in San Antonio, Texas or that IPTV this isn’t going too well.

* For Comcast, Broadband, VoIP are hot

So just to ensure a little balance, a quick take on Comcast’s earnings report for the most recent quarter - they added 437,000 new broadband subscribers, better than most analyst estimates of 345,000. Average revenue per unit (ARPU) – $43.14. Doesn’t look like the competition is having any impact, because it is higher than fourth quarter ARPU of $42.38. Broadband revenues: $1.1 billion. Forget all that – the biggest news is that Comcast added 211,000 VoIP subscribers, though 141,000 are “net new customers.” And this when VoIP is not even available in the entire footprint of Comcast. Someone should be extremely worried... don’t you think?

[Clarification from Comcast PR: we added 211K net new Comcast Digital Voice (VoIP) voice subscribers, and lost 70K customers for our circuit switched phone business (this was expected – we’re not trying to grow or expand). Netting those two out, we gained 141 K total voice customers (digital voice and circuit switch combined)we added 211K net new Comcast Digital Voice (VoIP) voice subscribers, and lost 70K customers for our circuit switched phone business (this was expected – we’re not trying to grow or expand). Netting those two out, we gained 141 K total voice customers (digital voice and circuit switch combined) ]

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