Verizon (NYSE: VZ) has acknowledged the ascendance of the Internet and Web-connected television by adding $10 to $15 a month to the price of what it's charging for the data portion of its FiOS service.
To justify the changes, the telco said it was increasing speeds to "insane" levels and expecting customers to adjust their TV packages.
The move to higher speeds at higher prices will probably come at the expense of FiOS TV, as customers drop services or adjust packages to make room for the higher costs that could range to a 300/65 Mbps standalone tier priced at $209.99 a month ($204.99 on a two-year contract).
Verizon's other triple-play packages range from a low of $99.99 (5/15 Mbps) to $174.99 (150/65 Mbps) for variously configured triple-play offerings, in what it's calling FiOS Quantum.
Stripped of the marketing hype--and even of the bundles that are expected to glue consumers to FiOS--the higher speeds are an admission that data, not TV, rules the broadband roost and that enterprising consumers don't want or need a service provider's pre-selected video package.
"As consumers stream and watch more movies, sports and shows in their homes on devices other than traditional TVs such as smartphones, tablets, gaming consoles, smart TVs and Blu-ray players, they need faster broadband to enhance their experience," Mark Ritter, chief marketing officer for Verizon's consumer and mass market business unit, said in a news release.
Cable operators have been taking a similar approach to broadband-versus-TV offerings. Cable, though, built its business on TV and is loath to abandon it as a primary service. Verizon, coming from the telco side of things into TV, has fewer such qualms and is thus well positioned to get into a broadband battle.
"A revolution in speed has arrived," Bob Mudge, president of Verizon's consumer and mass market business unit, said in the release. "the new FiOS Internet speed and bundle options provide incredible value and represent the most significant mass scale, consumer broadband speed enhancement in the nation in the past decade."
Verizon has not conceded the TV market to either cable or OTT providers and it has not conceded that consumers will leave FiOS TV and search out their own options using the higher speeds. It's just put TV on the same back burners as digital voice service--an essential ingredient in a sticky triple-play bundle--but not the marquee service.
The telco said that existing FiOS customers can upgrade to the new faster speeds with "no upgrade fee" but that the majority of existing FiOS customers "will pay $10 to $15 more per month to double or triple their Internet speed." Tellingly, Verizon suggested that these same subscribers "may be able to adjust their FiOS TV tiers as desired and pay roughly the same monthly total that they pay now.
"Consumers will receive great value from the FiOS Quantum speeds and our customizable bundles," Ritter said.
- see the Verizon release
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