Verizon Communications is getting rid of hidden fees and cable bundles that lock customers into long-term contracts, hoping to win over consumers ditching pay-TV for cheaper online streaming.
The company said Thursday that it is letting Fios customers choose internet speeds and TV packages separately, without signing annual contracts that often leave customers paying more after a year or two. Verizon will also offer customers personalized TV packages based on their favorite channels.
Verizon is rolling out the new pricing plans during a disruptive time in the TV industry, with cable companies losing hundreds of thousands of video customers every quarter to online streaming services. The company's plan addresses some common complaints with cable, such as "hidden fees" that raise monthly bills.
Under the new model, called Mix & Match, Verizon will sell three tiers of internet speeds, ranging from $55 to $80 a month, including a $15 fee to rent an internet router. Customers will then choose one of several TV packages, from $50 to $90 a month, plus $12 per set-top box. The cheapest TV plan will offer consumers roughly 125 channels based on their five favorites. The company also offers a YouTube TV streaming subscription with about 70 channels for $50 a month.
Fees for broadcast television and regional sports networks will be baked into advertised rates, instead of being itemized on monthly bills. Such fees have skyrocketed in recent years and gotten the attention of consumer groups and lawmakers, who've said the "hidden fees" should be included in promotional prices.
"Customers are tired of having to buy a bundle with services they don't want to get the best rates, and then discover that those rates didn't include extra fees and surcharges," Frank Boulben, Verizon's senior vice president of consumer products and marketing, said in a statement.
Verizon's strategy is targeting a growing share of consumers who want to save money and have more control over what they pay for, said Jeff Kagan, an independent telecommunications industry analyst.
"The customer is getting disillusioned with rising cable TV prices, and they're just looking for options," Kagan said.
Verizon had nearly 4.3 million video customers as of the third quarter last year. By comparison, Philadelphia-based Comcast Corp., the nation's largest cable TV provider, has 21.4 million. Comcast declined to comment on Verizon's announcement.
Business on 01/11/2020