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DSL Takes A Beating
Telcos post worst quarterly additions in DSL history

This was the worst quarter ever for DSL additions, with AT&T and Verizon barely adding 100,000 broadband customers, but collectively losing 220,000 DSL customers (130,000 for Verizon, 90,000 for AT&T). Why? The slow housing market plays a role, as does DSL users migrating to fiber. Verizon's neglect of DSL infrastructure and marketing is also a reason. But the baby bells are also hampered by DSL's slower speed in the face of 10-20Mbps cable, popular cable technologies like Powerboost, and VoIP bundles.

Those discount introductory DSL tiers, made so popular a few years ago, helped convert dial-up users to broadband, resulting in record additions. But now the broadband market is saturated, and many remaining dial-up users don't want to upgrade. Now it's all about playing customer tug of war by using triple play bundles and long term contracts. Lately, it appears that cable is winning the battle.

Despite all the hype given to FiOS and U-Verse, the reality is that the majority of both company's customers are going to be served by DSL for a very long time. Verizon is probably in the best position, though even by 2010, roughly half of Verizon customers still won't have access to FiOS. AT&T's in a tougher spot, given they've decided to stick with loop-length dependent copper and could struggle once DOCSIS 3.0 is deployed.

Both AT&T and Verizon also probably won't push their next-gen services much further into their footprint, given the lower ROI for rural America. Meanwhile, cable already serves many of those rural customers because of tough local franchise agreements with build-out provisions. These are the same local franchising rules AT&T and Verizon just spent millions lobbying to eliminate so they could avoid the cost of wiring rural America.

If you folks recall, many analysts predicted the telcos would be leading the cable industry in overall broadband adoption totals by now, but they aren't. A report (pdf) by Information Gatekeepers from last May argued that the longer install times of U-Verse and FiOS and a neglect of traditional DSL offerings would have a negative impact on both telcos. Fewer broadband additions mean it's harder to offset continued landline losses.

Cable appears to be better positioned because DOCSIS 3.0 upgrades are cheaper than running fiber, and MSOs are adding VOIP customers much more quickly than the telcos are adding video subscribers. But the bells' primary strength right now is wireless, and this fight could get much more interesting once they begin serious deployment of LTE wireless broadband (AT&T claims 20Mbps wireless by 2009, though that's optimistic). Verizon's focus on urban fiber (thanks to bendable fiber) could also speed up FiOS numbers.
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baineschile
2600 ways to live
Premium Member
join:2008-05-10
Sterling Heights, MI

baineschile

Premium Member

Or maybe...

A good chunk of people dont want or need high speed internet.

Isnt earthlink banking on owning the dial up market the next decade?
moonpuppy (banned)
join:2000-08-21
Glen Burnie, MD

moonpuppy (banned)

Member

Re: Or maybe...

said by baineschile:

A good chunk of people dont want or need high speed internet.

Isnt earthlink banking on owning the dial up market the next decade?
DING DING DING, WE HAVE A WINNAR!!!

DSL was a half hearted attempt for the telcos to get high speed access to their customers. Distance from the CO was the biggest problem.

They had their chance with ISDN but screwed that up too.

Verizon is deploying fiber. A BIG reason is that they don't have to share it with anyone and to upgrade their decades old equipment.
Rob_
Premium Member
join:2008-07-16
Mary Esther, FL

Rob_

Premium Member

Re: Or maybe...

DSL isn't available in all areas which is a BIG problem and the speeds are slower then cable and soon, they will be issuing monthly caps.

people think DSL is better, well it has it's pros and cons but why is 1.5 down still the norm? why not 10 or 20 down be the norm.. answer? corporate greed.

people think 1.5 is fast until you download a big file.

here, i'm paying for 20/2.5 here on cable and DSL is only offering 256/256 or something similar.

lack of competition isn't helping, either.

here in fort walton beach, fl cox issued a speed increase which is nice but will probably hold for the next 4-6 years.

-rob
PDXPLT
join:2003-12-04
Banks, OR

PDXPLT

Member

Folks can't buy something that you refuse to sell to them ...

...Verizon's strategy is to refuse to sell DSL to millions of their lower-ROI customers, and use them as hostage "bait" to push for USF-like subsidies in D.C. Or so it has been reported by dslprime.com. Apparently they've computed if they can squeeze a new cash cow revenue stream out of the government, it'll be worth it in the long run to forego the revenue from these subscribers for the time being. Maybe a smart thing for VZ shareholders. It just sucks being one of these subscribers, and eventually a taxpayer, once the VZ lobbyists work their magic.

a guy pd
average - nothing special
join:2008-05-08
Silver Springs, NY

a guy pd

Member

Re: Folks can't buy something that you refuse to sell to them ..

Frontier is the local DSL and they just decided to put a 5 GB / month cap on their High Speed Internet. I think this will be a cause for a major migration to Time Warner's Road Runner, since they don't have any caps at this point in time.

i1me2ao
Premium Member
join:2001-03-03
TEXAS

i1me2ao

Premium Member

because it sucks

can not recieve in this area. oh you are so far you should be happy it works etc etc..
apollo80
join:2002-01-31
Richmond, VA

apollo80

Member

Happy with what I have for now...

Have been waiting for Verizon Fios for some time. Currently have their DSL service.

And honestly...I'm happy with it. Yes, there are faster speeds out there, but the speed I have is fast enough, and with simple gaming, web surfing, and emails, along with the occasional iTunes download of music, I don't need more speed, at least for now.

Because my 1500/384 is cheap enough, I'm no longer in a hurry for Fios.

pan0k
@cox.net

pan0k

Anon

Re: Happy with what I have for now...

I too was in that situation. I was doing 1.5mbps down/128K up and paid handsomely for it base price of $34.95 ($36 to $39 depending on Verizon mood). I was waiting for FIOS to come to my neighborhood (if you draw a 1/2 mile radius around my house - anybody inside the circle does not have FIOS where everyone outside the circle has it.) Then I got an email stating they are jacking up my base price to $39.95 which was the last draw. I immediately jump to cox and it cost me $2.04 additional to get 5 mbps down/2 mbps up. That 2 mbss up makes the whole difference especially uploading pictures, and made me feel glad that I switch.

ninjatutle
Premium
join:2006-01-02
San Ramon, CA

1 edit

ninjatutle

Member

Next quarter: Cable Takes A Beating

This is going to happen as customers jump from one provider to the next with incentives year after year. These are the customers you don't want anyways. The frugal bottom feeders. Best Buy calls them devil shoppers.
SilverSurfer1
join:2007-08-19

SilverSurfer1

Member

Re: Next quarter: Cable Takes A Beating

said by ninjatutle:

This is going to happen as customers jump from one provider to the next with incentives year after year.
And what "incentives" would those be? Caps? Throttling? Those aren't incentives, chum...they're disincentives. And the more onerous they get, the more people will decide they no longer need BB.

ninjatutle
Premium
join:2006-01-02
San Ramon, CA

ninjatutle

Member

Re: Next quarter: Cable Takes A Beating

»Comcast Makes Wii Give Away Promotion Official [47] comments

But this is not really a deal. They're getting screwed in year #2

KrK
Heavy Artillery For The Little Guy
Premium Member
join:2000-01-17
Tulsa, OK
Netgear WNDR3700v2
Zoom 5341J

KrK to ninjatutle

Premium Member

to ninjatutle
said by ninjatutle:

This is going to happen as customers jump from one provider to the next with incentives year after year. These are the customers you don't want anyways. The frugal bottom feeders. Best Buy calls them devil shoppers.
Yeah, stupid customers who take advantage of sales, read the fine print, use incentives, rebates, etc

What losers.

Customers should just hand over their wallets and let Corporations decide what they are going to give them and when.

ninjatutle
Premium
join:2006-01-02
San Ramon, CA

ninjatutle

Member

Re: Next quarter: Cable Takes A Beating

Yes, it is exactly what they are, bottom feeders. Probably the same ones fighting over each other the day after thanksgiving at Walmart over $20 DVD players or $300 notebooks.

KrK
Heavy Artillery For The Little Guy
Premium Member
join:2000-01-17
Tulsa, OK
Netgear WNDR3700v2
Zoom 5341J

KrK

Premium Member

Re: Next quarter: Cable Takes A Beating

No, they are smart and savvy shoppers.

People who research purchases and take extra time and effort to save money. They aren't bottom feeders, nor are they abusers. They're just smart.

If companies don't like bargain shoppers, then they should simply stop using misleading advertising and gimmicks like rebates.

guitarzan
Premium Member
join:2004-05-04
Skytop, PA

guitarzan

Premium Member

Re: Next quarter: Cable Takes A Beating

said by KrK:

No, they are smart and savvy shoppers.

People who research purchases and take extra time and effort to save money. They aren't bottom feeders, nor are they abusers. They're just smart.

If companies don't like bargain shoppers, then they should simply stop using misleading advertising and gimmicks like rebates
Including gimmicks such as wanting Google...etc to pay for content crossing their customers monthly paid for connection or billing per byte or gigabyte overage on a hi speed tier the con artists dreamed up in the first place, designed to rip off & shaft their own customers. F that bullshit, they have to be aware customers will hopefully sooner rather than later tell them where to jam it.

I'm surprised these corporate hors has not rolled out a price increase/tax on internet due to higher gasoline prices.

supergirl
join:2007-03-20
Pensacola, FL

supergirl to KrK

Member

to KrK
said by KrK:

No, they are smart and savvy shoppers.

People who research purchases and take extra time and effort to save money. They aren't bottom feeders, nor are they abusers. They're just smart.

If companies don't like bargain shoppers, then they should simply stop using misleading advertising and gimmicks like rebates.
I research every purchase. And, I HATE rebates. Rebates are a scam--many people will forget to send them in or it is a pain--wait 4-6 weeks. Comparison shopping is exactly what the Internet is for exactly. And, I can wait for the price drop--unlike idiots waiting a week in line for the new iPhone.

AT&T added a lot of DSL customers, at that $9.95 rate, when they jacked dial-up to $21.95. VZ justs seems to be changing DSL to FIOS. The other thing killing the Telcos is the cheap phone service from the Cable Cos--which can be up to $30 a month cheaper. Cable is selling on price points and the Telcos are selling on a technology few get (FIOS) or few understand (UVerse). Since it looks like a bleak future for the Telcos, especially AT&T, then it is certainly bleak for Indie Voip companies (ala Vonage).

THX_1138
neo-luddite
Premium Member
join:2007-01-24
San Jose, CA

THX_1138 to ninjatutle

Premium Member

to ninjatutle
I guess I'm a Bottom Feeder. I get Elite DSL, Long Distance, Local Calling, and Wireless for $77/month. These are stable month-to-month prices that aren't going to time out.

Granted, I pay what you pay for Elite DSL. My long distance is the Online One-Rate [or whatever it's called] and I have no friends to call anyway :-( , my local calling is Measured Rate without any bells and whistles, and my Wireless is an old company-sponsored plan that's grandfathered in and which my wireless provider is forever trying to entice me to "upgrade" out of.

I go for the deals and dump the crappy pricing. Bottom Feeding is just smart consumerism. I'd feel like a chump if I got any of these bundle "deals" that would bend me over a barrel for hundreds of dollars a month.

('Devil Shoppers'. I like that. I can use it as a negotiating tool with a phone rep; "Don't make me Devil Shop you!")

Bottom Feeders Unite!

ptrowski
Got Helix?
Premium Member
join:2005-03-14
Woodstock, CT

ptrowski

Premium Member

Partly price for me.

I am able to get the Elite tier on AT&T which is about 1 mb slowe than what my local cable company (Metrocast) can offer, but it is also much more stable. I don't have the huge fluctuations that I did with Matrocast. I use VoIP and on DSL it just works better than it did on cable.

It sucks because my area is surrounded by the larger companies but Metrocast has this area. They are slowly rebuilding their network, but I won't see that for at least 1.5 years.

So for now, I will keep about $20 in my pocket until the rebuild hits up here.
MrHappy316
Wish I had my tank
Premium Member
join:2003-01-02
Columbia, SC

MrHappy316

Premium Member

Re: Partly price for me.

I agree with this assessment, my parents have kick butt Comcast during non busy parts of the day but slows to a crawl when everyone gets off work and the pings skyrocket. So far with my DSL I haven't had either problem and I don't get penalized because I got Sat TV and not subscribing to their crappy basic cable service
Trollhawk
join:2005-05-28

Trollhawk

Member

Could be due to U-verse/FIOS cannabilization of DSL lines

I'd guess that the low growth in additional DSL lines can be, partly, attributed to customers converting from DSL to U-verse/FIOS. I know I have, as well as many houses on my block. Isn't this the first quarter that U-verse additions have outnumbered DSL additions for AT&T?

bobjohnson
Premium Member
join:2007-02-03
Spartanburg, SC

bobjohnson

Premium Member

Re: Could be due to U-verse/FIOS cannabilization of DSL lines

said by Trollhawk:

I'd guess that the low growth in additional DSL lines can be, partly, attributed to customers converting from DSL to U-verse/FIOS. I know I have, as well as many houses on my block. Isn't this the first quarter that U-verse additions have outnumbered DSL additions for AT&T?
could be due to the fact that people are getting kicked out of their houses all over the country...

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Look at prediction from Dec 2006

»DSL Beating Cable in Subscriber Adds
DSL Beating Cable in Subscriber Adds
But when will the two technologies break even?
(old news - 12:52PM Friday Dec 01 2006)

For at least the eighth time in the past 10 quarters, the baby bells have added more subscribers than the nation's largest cable providers, reports Light Reading. The biggest phone providers added 1.3 million broadband subscribers in the third quarter, compared to 1.2 million for the nation's largest cable providers. For the record, the U.S. has 51 million broadband users, 28.2 million cable customers (slightly less than 56%) and 22.7 million DSL customers (44%).

There's been absurdly differing opinions on when exactly DSL will pull up alongside (or pass) cable in regards to total subscribers. Pew proclaimed that DSL was now even with cable in the States back in June, an analysis that Bruce Leichtman of Leichtman Research proclaimed was "dead wrong." IGI recently predicted that DSL totals would surpass cable by the end of the year.

Apparently none of the industry's experts actually know, so "soon" seems like a reasonable answer based on consistent strong DSL subscriber additions.
When this prediction was made, the ascendancy of DSL was a foregone conclusion.

Dogfather
Premium Member
join:2007-12-26
Laguna Hills, CA

1 recommendation

Dogfather

Premium Member

That's what happens when you take 30% increases

Both AT&T and Verzion took HUGE increases on their budget DSL tiers, the tiers that were generating the record adds for them not too long ago.

People shop price. Raise the price = lower adds. Drop the price = higher adds.

Not exactly rocket science.

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Re: That's what happens when you take 30% increases

said by Dogfather:

Both AT&T and Verzion took HUGE increases on their budget DSL tiers, the tiers that were generating the record adds for them not too long ago.

People shop price. Raise the price = lower adds. Drop the price = higher adds.
Sort of. One of the big deals about Xtuple-Play deals is that it makes the customers much less likely to shop price. Switching TV providers requires a dish and/or new boxes. Switching telephone providers is painful. So for that $5-$10 discount, they also get some loyalty.

The Wii, McAfee, Rhapsody, etc. -- that's not just Comcast being nice (although those are nice things to have), they're also designed to keep you from jumping ship on a price shift.

Dogfather
Premium Member
join:2007-12-26
Laguna Hills, CA

Dogfather

Premium Member

Re: That's what happens when you take 30% increases

I'm sorry I'm not following. It seems to be the X-play deals are all about price. But in the case of budget DSL, they were 1 year deals independent of x-play (at least Verizon and AT&T were). The only requirement was POTS which certainly the majority of people had/have.

And personally I don't think anyone stays with a company over Rhapsody or McAfee. They may sign up for a Wii (Comcast) or HDTV (Verizon).

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Re: That's what happens when you take 30% increases

They are about price -- to get you initially. But once they've got you, you have to decide whether it is worth the hassle to switch it all again. With Internet, sure. With Cable and Phone -- that's a hassle.
Tcomp
join:2008-07-29
Greenbelt, MD

Tcomp

Member

good insight into this issue at

»telecompetitor.com/node/741

DSL may be in real trouble, especially given it's "value" play as a cheaper broadband option. If it can't compete when the economy sucks, how's it going to do when the economy turns around.

nyny
@ftna.com

1 recommendation

nyny

Anon

you should correct the article: actual loss of DSL customers

if you look at the numbers, AT&T and Verizon are barely adding 100,000 broadband customers, but these numbers include fiber customers too.

After removing fiber customers, a quick look gives the following result:
- Verizon lost 130,000 DSL customers in Q2
- AT&T lost 90,000 DSL customers in Q2
Hound7
join:2006-03-08
Princeton, NJ

Hound7

Member

Re: you should correct the article: actual loss of DSL customers

Does Verizon's 2Q number include the loss of subs due to
the Fairpoint sale?
EPS4
join:2008-02-13
Hingham, MA

EPS4 to nyny

Member

to nyny
Yeah, but excluding fiber customers is silly, since a decently large number of their DSL customers probably switched to the fiber service- the company therefore didn't really "lose" those customers.

Packeteers
Premium Member
join:2005-06-18
Forest Hills, NY

Packeteers

Premium Member

DSL Rules!

I just had my Interleave updated to FastPath
and I could not be happier with my 3000/768
service. I think cable and FIOS are overkill,
and won't pay a dime more to get either one.
Rick5
Premium Member
join:2001-02-06

Rick5

Premium Member

My prediction is...

if you think things are bad now..wait until docsis 3.0 arrives bigtime next year.

If Comcast plays their cards right and makes those 50Mb speeds part of something like the top tier bundle (159 bundle)..
there won't be a telco landline or dsl customer left in the United States!

They could single handedly change the entire speed landscape in this country.

The only one who could pose a challenge to that would be Verizon and their fios service. But there's no way they can get enough territory wired in time. Or as fast as docsis 3.0 can roll out.

IMHO.this is the real danger to the telco's. And their losses this quarter might be a drop in the bucket compared to that.

Is this comcasts plan?

I guess we'll just have to see but I sure wouldn't be surprised.

•••••••

Michail
Premium Member
join:2000-08-02
Boynton Beach, FL

Michail

Premium Member

don't want phone service

Also adding inexpensive VOIP services could net them more telco customers. However, most cable companies seem to overcharge for VOIP.

I don't want a land line phone but I do want my DSL or some sort of data line.

hamburglar
join:2002-04-29
united state

hamburglar

Member

Re: don't want phone service

Not the case for me. Both cable companies I can get are $10/month cheaper than ATT U-VERSE VOIP. They think their TV is pretty special at $74/month BUNDLED. That's currently one HD stream at a time too. I don't care for the cable companies, but I despise the phone company. They just don't get it.

meh37
@verizon.net

meh37

Anon

Time will tell...

Of the nearly dozen people I know who've been faced with the decision to stay with Comcast/Cox or switch to FiOS, all of them have switched. Some for faster/better (TEHO) Internet, some for better TV picture quality. For all of them it was cheaper (only partially due to new customer special pricing).

Actually, though, speed wasn't the biggest consideration--most of them just hated Comcast (as do most people I know who are or have been Comcast customers). My sister is (finally) moving from dial-up to broadband; for her, it's cheaper to keep her Verizon landline and add FiOS 10/2 than get anything from Comcast (only by a few dollars, though).

Personally, I don't see much difference between one corporation and another: they all just want your money. FiOS is for the long-haul; DOCSIS 3.0 will barely compete.

baineschile
2600 ways to live
Premium Member
join:2008-05-10
Sterling Heights, MI

baineschile

Premium Member

Re: Time will tell...

Docsis 3.0 3-band can offer up to 250mb.

Dont forget, comcast was the first to test a 1G/s switch from Maryland to NC
EPS4
join:2008-02-13
Hingham, MA

EPS4

Member

Re: Time will tell...

Ah, the hypothetical not deployed technology... The GPON system that currently exists on the side of my house can offer up to 2.4 Gbit/s in a hypothetical universe, but that doesn't mean Verizon will offer that speed to home users, for a number of good reasons. Essentially, I'll believe it when I see it.
bschuler2008
join:2008-07-08
Bethlehem, PA

bschuler2008

Member

Wierd as I just switched to cable on Monday

Long time Verizon DSL fan. But I finally switched cuz for the same price, I get much faster download on cable. I originally switched from Cable to DSL due to price. I am disappointed in my up speed STILL.. as that is what I am looking for due to website hosting. Wish FIOS or something faster up would come into my area... as for caps, etc.. luckily for me, I got choices in my area.. I had one BAD ISP (PTD), who would monitor my line all the time. Will never accept caps, monitoring, etc.. will just go back to dial up if need be.
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4

Member

Re: Wierd as I just switched to cable on Monday

you and everyone else that say will go to dial-up might and then watch the prices jump upt to about $20+ a month and see where you go back to or add the extra price of the phone line plus another $20 for dial-up.
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

part of the REAL picture.

DSL line losses are not the whole picture.. subscriptions of all kinds are at risk due to the high price of EVERYTHING that skyrocketed after $4-5 gasoline did what two hijacked planes could not do to the American consumer. The oil industry hijacked the economy and is raping the consumer.

Sorry to string this along to economic theory, but THIS TIME.. isp's should be concerned that fewer customers can be from economic woes happening across the country right now.

Dsl being the least valued of services will be a near impossible sell. Good luck AT&T. You gonna need it!

got the day off
@windstream.net

got the day off

Anon

Here i go again

Verizon lost 133,000 ($19.99)dsl customers and Comcast lost 138,000 ($60.00) video customers and you think verizon has the problem.

rob_in_chatt
Premium Member
join:2004-09-17
Chattanooga, TN

rob_in_chatt

Premium Member

dsl

my problem here in chattanooga is that i am too far from the available deployment area. 2 miles across town the damn service is available there, but not where im at. what horse shit. if i could have DSL, i would shitcan comcast in a heartbeat.

dont forget about the people that want to try DSL but cant because of lame ass excuses like the one i was fed about distance.

dslwanter
20 years on this site
Premium Member
join:2002-12-16
Mineral Ridge, OH

dslwanter

Premium Member

U-Verse & FIOS

Uverse and fios make DSL obsolete in their respective markets.

ssj4android
Redefining Reality
join:2002-04-14
Wyoming, MI

ssj4android

Member

Re: U-Verse & FIOS

U-Verse IS DSL though, for most subscribers.

dslwanter
20 years on this site
Premium Member
join:2002-12-16
Mineral Ridge, OH

dslwanter

Premium Member

Re: U-Verse & FIOS

But the question is, is it classified as "DSL" in these stats?
rid0617
join:2003-07-20
Greer, SC

rid0617

Member

Not worth it

Between the poor product and the even poorer customer service who would want to be part of this. Then even as technology gets cheaper they constantly raise prices and tack on fees. Who wants more of that?
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