Glenn points to an article in today’s Wall Street Journal about how Bell companies are offering free WiFi gear to their DSL subscribers and trying to win market share from cable broadband providers. Apparently this strategy helped them win more new customers than cable companies. Perhaps, because DSL penetration is lower compared to the cable Internet subscribers. I am not sure how long this strategy is going to last because Bells clearly are not understanding that they are fighting a losing battle. They keep selling micro DSL at a time when cable companies like Comcast are beginning to offer speeds in excess of 6 megabits per second. I think Bells are running scared. The triple-play packages from cable companies will hit Bells where it hurts the most – voice.
This analysis is totally inane and inaccurate.
1. While the total number of subscribers today impacts the percentage gains going forward, it doesn’t directly impact the number of net new adds per month (or quarter).
2. Indirectly, the net new adds going forward may be impacted by: (a) the number of households passed by cable (ie, it’s conceivable but unlikely that the non-broadband households left in the US haven’t been “passed” by cable yet), and (b) the distance from the local phone switch for potential DSL customers.
3. Maybe DSL is winning on price and functionality. Because internet cable access can’t be unbundled from TV cable, the total package is expensive AND more importantly cable is increasingly forcing customers to buy a product (TV cable) that they simply do NOT WANT. Eventually, such actions piss customers off, as if cable didn’t have enough pissed off customers already. Second (and this is anecdotal, to be sure), cable access in our neighborhood has been getting screwed up every afternoon since late April, and only recovers just after sundown. Comcast tech support claims this is because of summer heat and not because of demand surges eating up bandwidth. They’ve sent a tech out to inspect. Stay tuned.
The Bells had better be running scared, but so should the cable guys. For media, DBS is a much superior and much cheaper distribution method than landline cable, and THAT’S where all the cable guys make their money at the moment – force selling a product on customers that lots of them don’t even want.
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Bell Canada has been offering 802.11g DSL modem/wireless routers to Sympatico High Speed subscribers for a one-time $60 CAN fee since Spring 2004.
As for bundling, the Bells can play that game too: in fact, SaskTel, MTS(Manitoba), and Bell Canada again offer VDSL service combining Internet, digital TV and soon VoIP.
It is true that the dominant cableco in Canada, Rogers, has a 5Mbps bundle for $45 CAN/mo., but at a certain point the average surfer is going to see a diminishing rate of return on higher speeds. Can you tell the difference between 4Mbps and 5Mbps? Rogers also has a bandwidth cap.
Therefore, it may be a better assessment to say that *American* Bells are running scared. 🙂
Guys points well taken. but the bells in US are not as progressive as they are in up north. they are diddling their thumbs when it comes to VDSL and fiber to the home is not really happening so far. i am not sure if bundling wi-fi routers that cost like $25-$50 is enough of a lure to maintain DSL subscriber gains.
Anyway when bells start bumping the speeds it would make sense. i personally know that with SBC, I had about 384 Kbps download, and would get around 300 kbps. Which is why I would have so many issues with my vonage account.
while DBS might be superior to cable, but not everyone can get it. and TV is the heroin of the post modern lifestyle, we cannot do without it. etc etc.
thanks for your comments and opinions.
cheers