Verizon cites 'anxiety' in consumer spending
Want more evidence the consumer squeeze is influencing product pricing? Look no further than Tampa Bay's primary (granted, a loose term these days) phone provider: Verizon Communications. The company, according to Reuters, today begins offering cheaper packages of phone, Internet and video services, stepping up its competition with cable service providers amid a weaker U.S. economy. The No. 2 U.S. phone company said it was responding to growing "anxiety about discretionary spending."
While Verizon's wireless business is solid, other areas are challenged. In the third quarter, Verizon saw a significant decline in land-line users, with a loss of more than 1-million access lines. It also lost 96,000 digital-subscriber-line Internet users, as cable providers continue to take market share with their faster broadband offerings. "We're not surprised by it," said Verizon CEO Ivan Seidenberg, who said he anticipates further slowing in consumer spending in the fourth quarter.
That's the trend some analysts blamed on increasing defections to cable service providers -- Bright House Networks most often in the Tampa Bay area, which gets kudos in a recent J.D. Power survey -- offering "bundles" of entertainment and communication services. Verizon said its new "triple-play" bundle would be priced at around $80 to $130 a month, depending on Internet speeds and selection of television channels. The new bundles would help customers save around $15 to $35 a month, it said. The video service is delivered through a partnership with DirecTV, though Verizon has been trying to stem customer losses by expanding FiOS, its video service delivered over an all-fiber network.
-- Robert Trigaux, Times Business Columnist