Originally published February 23 2006
Verizon has unpleasant surprise for some new customers
by Mike Adams, the Health Ranger, NaturalNews Editor
Some people are finding that switching to Verizon DSL is harder than they expected. The service is oversubscribed in some areas because price cuts have backfired and the company cannot accommodate the increased volume.
Though her neighbors were using Verizon DSL, the company said the service was oversubscribed and she'd have to wait at least a month.
The situation illustrates a potential catch-22 for Verizon as it looks to prevail over cable competitors in the broadband market.
The company, and fellow DSL provider AT&T, have enjoyed significant success over the past year in using price cuts to convince customers that it's time to make the jump to broadband.
But those same promotions could backfire if the companies can't accommodate the increased volume of speed-hungry customers.
What's new: Offering their service for as little as $15 a month, DSL providers have attracted so many customers that, at least for one provider, some service areas are oversubscribed.
Bottom line: While the popularity of the low-priced DSL services has been a good thing for providers such as AT&T and Verizon, analysts warn that keeping customers waiting too long can mean missing a major opportunity to increase market share.
Providers say equipment shortages contribute to oversubscription in some areas.
"They may end up being a victim of their own success," said Jim Penhune, an analyst with Strategies Analytics.
Last June, AT&T (then SBC Communications) was the first of the two large phone companies to dramatically reduce its DSL pricing--to $14.95 for the first year of service.
In August, Verizon followed suit, offering its new tier of service, which includes 768kbps downloads, for $14.95 per month.
Last week it reported that the fourth quarter of 2005 had been its best ever for broadband, with 613,000 new subscribers signing on, a 14 percent quarter-over-quarter increase.
"I doubt AT&T and Verizon would be reporting the quarter-on-quarter subscriber growth they have the last two quarters if they hadn't cut prices the way they did."
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