TELECOM Digest OnLine - Sorted: DSL Price War Helps Close Broadband Gap

DSL Price War Helps Close Broadband Gap

Monty Solomon (monty@roscom.com)
Fri, 3 Mar 2006 22:59:04 -0500

By PETER SVENSSON AP Technology Writer

NEW YORK (AP) -- Last year was the first in which telephone companies
added more broadband Internet subscribers than their cable TV rivals
did, according to a research report.

The largest DSL providers, which have been engaged in a price war that
has slashed promotional prices as low as $13 a month, added 5.2
million subscribers in 2005, according to Leichtman Research Group's
analysis of company statements.

The major cable companies gained 4.4 million high-speed Internet
subscribers last year, for a total of 24.3 million. That means cable
retained a narrowing lead in total subscribers over the phone-line
based DSL technology, or digital subscriber line, which had 18.5
million customers.

The numbers reflect the 20 largest broadband companies in the United
States, with 42.8 million total subscribers and about 94 percent of
the market. Bruce Leichtman, principal analyst at Leichtman Research,
estimates that around 35 million people are still using dial-up
access.

The number of new cable broadband customers has been fairly stable
each year since 2002, while DSL growth has been accelerating.
Meanwhile, the overall phone vs. cable fight is becoming even more
contested as phone companies begin rolling out subscription TV
services in some locations.

Prices for low-end and introductory DSL services were cut in half last
year, as SBC Communications, now AT&T Inc., introduced a one-year plan
for $15 which was matched by Verizon Communications Inc.

The phone companies hit the "grand slam" with those price plans in the
second half of the year, Leichtman said.

- http://finance.lycos.com/home/news/story.asp?story=56352525

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