Seeing big dollars signs in the high-speed Internet, wireless, and Voice over Internet Protocol (VoIP) sector, a flock of local carriers are pumping billions into high-speed infrastructure and hunkering down for what promises to be a highly competitive marketplace.
According to industry watchers, there has even been such a considerable growth spurt among the Baby Bells that they are leaving many cable operators in the dust.
Recent estimations from Goldman Sachs and Deutsche Bank state that in the last fiscal quarter, DSL lines showed a slight spike over high-speed cable connections, marking an all-time first for telephone carriers that have been overshadowed by the more appealing and cost-efficient cable offerings for consumers, which combine high-speed access with cable connections.
Although to date, more consumers have signed up for broadband from cable companies, with about 13.7 million lines, compared to 7.7 million consumers using DSL services.
This lead is attributed to a jumpstart cable companies got when high-speed access first hit the popular majority of Internet users. At one point, cable high-speed outsold DSL two to one. But a radical cut in cost has led to a change in the playing field. Cable companies typically sell service for around $40 per month, whereas some telephone carriers have undercut that price by as much as 50 percent.
This new competitive trend, say analysts, could translate into a price war and could possibly give way to a more widespread rollout of high-speed as more consumers lean toward subscribing to their phone companies for DSL. However some critics of the rollout are saying that it is a last ditch effort among the Baby Bells to grab a piece of the revenue pie before the high-speed Internet age is set in stone.
According to the Federal Communications Commission, there were about 20.6 million homes and small businesses that subscribe to high-speed Internet as of June 2003.
Recent developments among the Baby Bells, which include Verizon Communications Inc., SBC Communications Inc., BellSouth Corp. and Qwest Communications International Inc. have included the addition of 1.05 million DSL lines.
In an announcement Tuesday, Verizon said it plans to offer an additional higher-speed DSL service to consumers this summer that will include residential VoIP services.
"We've created one of the best overall values in broadband today, with content, speed, and great service at a very affordable price," said Judy Verses, senior vice president of marketing for Verizon's Retail Markets Group. "Our sales growth shows that when consumers in the mass market think about broadband, more and more often they're choosing DSL for their high-speed connection. And we're not stopping now."
According to Reuters, there has been little competitive reaction to the Baby Bells from cable companies like Comcast, the nation's largest broadband provider with 5.7 million subscribers.