AT&T Drops DSL Price, But Not Really > That's how they lost their huge adds

That's how they lost their huge adds

For those that don't want to search the PDf, the merger agreement prices for 768kbps are $19.95 for direct access (without a land-line phone)and $10.00 with a land-line phone. It is for new DSL customers only which includes, of course, existing dial-up customers.

reply to Dogfather
If AT&T wants to get those huge adds (i.e. poor college students), Have a $25/month 3Mbps ADSL w/o POTS service, and bundle in voice (VoIP !) and/or cellphone service.

Instead, they've been raising prices, stop offering VoIP service (w/o bundles on TV service, where available), etc.
AT&T just hasn't made it easy for a customer to want service.
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Canada = Hollywood North

reply to Merger prices
I forgot to say that for those prices the modem is supplied and not charged for.

reply to en102
It's like they had a BOD meeting and asked, what can we do to stop customers from subscribing. Then did it.

reply to Dogfather
Even better would be $1.99 per month -- they could lose even more money per customer. Sounds like a good business plan to me...

For $10 a month if a customer calls in for support it probably takes 6 months to recoup the expense. If people who buy dirt cheap connections also have old crappy computers, their ISP get saddled with a very unprofitable bunch of customers.

The reality is the data services division was profitable then. This round of greed will bite them in the ass.

Divison? When did we shift to talking about divisions? I thought we were discussing tiers and customers?

You mentioned "losing money per customer". They never lost money per customer.

Ah, I see where you're coming from. I mean individual customers paying $10/month is a losing price point.

I'm not sure that it is. Given the opportunity to up-sell, and the tie to overpriced POTS it sure looks like it would still be a net gainer for them. At $15 it was a big gainer for them.

How do you figure? The cost of a DSL modem and a truck roll for the install means it requires many months to move a customer into the black. We're not talking Comcast subcontractors here, AT&T's a union shop and they pay good wages to techs.

People seem to have an idea in their head about how much something "should" cost (thanks in no small part to people like BBR's own Karl, who skews every news story to further his views and manipulates statistics or manufatures meaningless metrics to try to prove a point). When one's world view dictates that all corporations are inherently evil and out to screw the little guy, it's an easy trap to fall into, but it's not intellectually valid.

Because you have hundreds of customers paying to support a single truck roll. Your math requires everyone to have a truck roll and ignores the fixed costs of providing DSL. There are many costs that are the same whether they're providing service to 1 customer or 1000.

It's the same as insurance. It's pooled premiums that allow an insurer to pay off a claim. A single claim taken against a single insured will look like a losing proposition every time. But for every insured that takes a claim, there are hundreds or thousands that don't.

There is no skewing the annual report. Data services were and are profitable and those margins increased when they had these cheap DSL deals. Without them we see clearly that they get no new customers.