SBC Kicks Broadband Price War Into Even Higher Gear With Free Service

Mirroring the satellite-cable wars, SBC is about to offer three free months of DSL to cable broadband subs who switch over. (Cable subs who switch to SBC and the Dish Network for video will get three free months, too, and some premium channels.) It’s all about market share and sub counts for SBC: pay now for the incentives and collect revenue later. It can be a risky approach — any customer service failures caused by too many people signing up at once could cost the company.
Meanwhile, despite protests to the contrary, SBC may be setting the broadband price pace after all with its deep discount offer of $14.95 a month to subscribers who sign up for an annual contract online. None of the biggies are matching that offer but Cox, Comcast and Verizon are all offering some incentives for new customers. Discounting is nothing new — anyone who has signed up for high-speed and didn’t get an intro offer wasn’t paying attention — but SBC’s aggressive push for market share is upping the ante. Analyst Bruce Leichtman raises on red flag in today’s Wall Street Journal: “You don’t want to create cannibalization where people who are paying a higher price want to switch down.”
If broadband ISPs can bring in more business instead of simply rearranging deck chairs, it stands to be a big plus for content providers.