Monday, February 04, 2008

AT&T hikes DSL prices, newspaper reports

The Chicago Tribune is reporting AT&T is raising prices across the board for its DSL service by $5 a month. The exception, a company spokeswoman told the newspaper, is residential customers who pay $35 for the Elite plan and customers with long term contracts.

AT&T said the increase is needed to upgrade infrastructure to support more bandwidth intensive applications such as video and music files.

I'm doubtful of the company's stated rationale for the increase because it has effectively pulled the plug on upgrading its legacy first generation DSL plant and is instead directing funding to its hybrid fiber/copper Project Lightspeed deployment in selected metro areas. This deployment is in support of the telco's U-Verse all digital triple play bundle of voice, high speed Internet and Internet Protocol TV (IPTV).

The DSL price boost is an effort to merely extract greater incremental income out of existing services. That's in line with AT&T's highly risk adverse cash flow and depreciation based management strategy that shuns significant physical plant upgrades that would eliminate large swaths of its 22-state service area where AT&T offers no wireline-based broadband services.

No comments:

Web Analytics