SBC's DSL price dips below some dial-up plans

A $14.95 per month promotion that SBC launched Wednesday took its price for DSL broadband significantly below brand-name dial-up Internet services, which offer only a small fraction of DSL's performance.

The move by the U.S. regional carrier, which calls itself the biggest DSL provider in the country with 5.6 million lines in use, turned up the heat in a competition for high-speed subscribers that pits carriers against each other and the cable companies. All want to capture customers for potentially lucrative "triple play" bundles that include data, voice and video. Research company IDC estimates the number of broadband households in the U.S. will grow 18.5% per year between this year and 2009.

The offer is only for new users of the SBC Yahoo DSL Express service who sign up for a 12-month contract and buy SBC local phone service, and it is for a limited time, according to an SBC statement. However, the company has not determined when the offer will expire, said SBC representative Wes Warnock. The DSL Express service offers between 384K bit/sec and 1.5M bit/sec of bandwidth. Also Wednesday, SBC rolled out a similar offer for its SBC Yahoo DSL Pro service (1.5M  bit/sec to 3M bit/sec) for $24.99 per month.

By contrast, dial-up services top out at 56K bit/sec and cost more than $20 per month at the regular price from major service providers such as America Online and Microsoft MSN.

"SBC is now down in the dialup price range," said Ovum analyst Jan Dawson. The move is a way to reach yet another untapped segment of price-sensitive potential customers after millions of average consumers followed early adopters into the high-speed services, he said. Dawson doesn't think it's a short-term gimmick. "Companies like SBC don't do things like this if they can't make money from them," he said.

The IDG News Service is a Network World affiliate.