James Delahunty
21 Jun 2010 20:53
Verizon Communications is to let customers trial its FiOS Internet and television service for a month, and will not charge any fees if a customer chooses to switch the service off after. The offer also includes the option of paying month-by-month, eliminating a long-term contract, with the assurance that the price would not go up for a year.
The offer might be risky to Verizon, which reportedly spends around $1,350 to install FiOS at a new customer's home. if most customers chose to keep the service however, it could put pressure on cable and satellite rivals to adjust their own terms. Termination fees usually still apply for U.S. wireless providers even if try-out periods are offered to customers.
Larry Hettick, an analyst for Current Analysis, predicts that Verizon will keep a substantially large number of customers who sign up under the new rules. "There's so much tit-for-tat in the cable TV business, anything that changes for one provider may bring pressure on the others," Hettick said.
Verizon's FiOS coverage region has a potential 12 million customers for television services, and 12.6 million for Internet services. The company has been offering FiOS Internet services since 2004, and television services since 2005. In areas where it operates, it has roughly 25 percent market share for TV and 29 percent for Internet.