Giant telco SBC released its Q2 05 earnings this morning (more later) but the biggest news hidden by the company’s press release is that for the first time in twelve months, SBC’s mighty DSL juggernaut has slowed. In the second quarter of 2005, SBC added 360,000 new DSL customers, a 40% drop from the 504,000 high-speed subscribers added during Q1 05. (See stats below) To be fair, the year-over-year DSL adds were up over the 315,000 DSL gains in Q2 04, but against the hype of the DSL v. cable price war, expectations held that SBC would produce another recording-breaking quarter.
It’s little surprise then that in June SBC took the bold step of slashing its DSL service price to $14.95, below the price of premium dial-up services such as AOL.
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SBC DSL Subscribers |
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| Total | ||
| DSL Subs. | Net DSL | |
| Quarter | (mil.) | Adds (000) |
| Q304 | 4,679 | 402 |
| Q404 | 5,104 | 425 |
| Q105 | 5,608 | 504 |
| Q205 | 5,968 | 360 |
It’s too soon to tell, but investment house Morgan Stanley may have to eat its words: earlier this week, analyst Simon Flannery predicted that the phone companies would add a collective one million high-speed subscribers for Q2 05, beating out the higher priced cable options.
SBC is the biggest DSL provider in the U.S. and with only 360,000 net adds, it’s going to be hard for the total number of DSL adds for the big four telcos to top one million.
Cable operators have long maintained that cut-rate pricing on high-speed service is for losers — what matters is speed and quality of service, a contention backed up in the market by the continued brisk growth in cable modem service. In early July, Comcast upped the ante, and hoped to counter SBC’s price cut, by increasing the download speeds of its standard modem offering to six Mbps while keeping prices (around $43/month) the same.
Cynthia Brumfield at 9:30 AM|Comments(0)
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