DSL Price Cuts vs. the Cable Bundle

SBC cut its base price for new customers to $14.95 in hopes that dial-up Internet users will begin to convert in droves. Cable operators, which added over 4.3 million cable modem customers last year, don't appear to be too worried by SBC's offer. For one thing, operators' basic broadband packages include speeds much faster than what SBC is offering. Looked at on a per-megabit basis, cable modem and DSL are roughly equivalent.
In fact, as Bernstein Research analyst Craig Moffett noted in a research report, in recent years discounting has had little impact on broadband market share. Still, to offset the perception that DSL is less expensive than cable modem service, operators may continue to roll out lower-priced, lower-speed broadband packages, or further discount VoIP phone service.
JupiterResearch expects 69 million households will have adopted broadband by 2010, or 80% of U.S. online households. Jupiter expects cable to retain its lead (albeit by a slimmer margin) as more online households switch to broadband. Cable's double- and triple-play bundles will enable operators to continue to offer compelling value to consumers.