We’ve recently learned Qwest/MSN is going to expand the promotion it has been test marketing in 3 states. This will be accompanied by an aggressive marketing campaign for new subscribers. These promotions are available only to new MSN subscribers, and is not available to ISPs:
- Residential 256k – No Change
- Residential 1.5Mbit – $14.99/mo, includes loop. Only available for new customers. Line-share only. 12 month promotional pricing expires at end of the 12th months and reverts to regular pricing.
- Residential 3-7Mbit – $24.99/mo, includes loop. Only available for new customers. Line-share only. 12 month promotional pricing expires at end of the 12th months and reverts to regular pricing.
This retail pricing is far below what the loop alone costs ISPs (not to mention all the back-end equipment and circuits required). Qwest explains that this is because it is losing market share to the cable companies and must have a promotion sufficient to compete with them. ISPs only make up 6% of Qwest’s broadband business, so even though it recognizes that this retail pricing is going to make it more difficult for ISPs to compete for new customers, ISPs do not make up a large enough piece of Qwest’s pie for it to affect the decision or, at this time, lower ISP or loop pricing. Also, telecommunication laws have changed over the past few years and Qwest is no longer required to offer competitive wholesale pricing to ISPs, it does so only as a courtesy now.
Visp.net recognizes this is going to make what may already be a hard sell on residential DSL perhaps even harder. There are some benefits for ISPs, especially those partnered with visp.net:
- This MSN promotion will only be for new subscribers. The promotion does not apply for customers switching from a private ISP to MSN. So there should be little worry about Qwest enticing existing customers with this promotion.
- Qwest business class pricing still remains very high. ISPs can and should be extremely competitive in the small-medium business packages. (More details on this in our next article.)
- Qwest’s quality of service for residential and business customers connecting via ADSL still remains very low. In contrast, all visp.net POPs have redundancy via multiple upstreams, whereas Qwest often only has a single and often congested upstream available in any particular service area.
For more information and ideas about how we can best leverage the current competitive landscape, see our upcoming article on providing services to small and medium sized businesses.