Verizon Communications is increasing prices for some FiOS customers as it offers higher speeds, a move that one analyst says will could lead to higher prices from cable rivals such as Cablevision Systems Corp.
The telecom giant said it expects the majority of its FiOS Internet customers to have to pay $10 to $15 more per month to avail of new offerings, but it noted that they could change their television package to keep their monthly fee unchanged.
Verizon competes with cable operators for television and telephone customers as well as Internet users with various bundle service options.
ISI Group analyst Vijay Jayant described the new pricing structure as aggressive especially for consumers who have instead seen price freezes or even promotions from rivals like Cablevision. He said it may lead cable companies to charge more.
Verizon will stop selling its 25 megabits per second (mbps) and 35 mbps service plans and will instead offer 50 mbps and 75 mbps plans to new customers or existing customers at the end of their contracts.
It will keep its entry level 15 mbps service available but Arturo Picicci, Verizon’s director of product management, said he expects most customers to move away from this service as they are craving more bandwidth to connect more devices, tablets and smartphones on top of traditional computers inside their homes.
“We’re expecting that 80 percent of customers will want more than 15 megabits per second,” said Picicci referring to Verizon’s slowest FiOS service speed.
Verizon also said on Monday that it is cutting the price of what was previously its fastest Internet service as it introduces a new service that has double the speed, amping up technology competition with rivals Comcast Corp , Time Warner Cable and Cablevision.
Excluding other fees, Verizon said it has cut the price of its 150 megabits-per-second service to $99.99 a month from $209.99, bringing it in line with pricing against its rivals’ fastest speeds.
Verizon also said on Monday it will charge $209.99 a month for a new 300 megabits per second (mbps) service, or $204.99 for users with a two-year contract, starting today.
This compares with No. 1 rival Comcast’s fastest service, which costs $200 a month for speeds of 105 mbps, and rival Cablevision’s speediest offering which is $104.95 for 101 mbps.