> It was in response to lower rates for DSL.
Qwest has been (smugly) sitting on the sidelines while the cable
companies have been gobbling up market share and pricing themselves out
of business (consider the small but steady rate hikes, moreso in TV
service, and the not-so-unlimited unlimited internet service - remember
how cheap cable used to be? Even without the $6.00 Radio Shack
descrambler <g>).
They've been waiting for the beast to topple. The first push was the
MSN partnership - I think that took the cable co's by surprise - Qwest
now has less overhead, with Microsoft taking over the support for those
customers. Bishop to e6.
Now they're giving it it's second push with the new DSL rates and
speeds. The cable co's have to respond, in order to appear competitive,
so they up their speeds (but no price changes), eating further into
their profits. Cable Co's: Castle, 0-0-0 Qwest: Qf4
I seriously expect to see a very drastic move by the cable co's within
the next year (maybe a new partnership - Rxe6 to deal with the Microsoft
bishop). They've certainly set the stage for a big rate hike ("I know
it's a lot of money, but we GAVE you a bunch of free bandwidth!"). Or
tiered pricing on CableModem service. Or a mass purging of "expensive"
customers.
They priced their service to be competitive with DSL, and I imagine they
were operating on a pretty significant loss, or at least very little
profit. They were gambling that they had deeper pockets than Qwest, to
afford operating their network long enough to gain a larger install base
so they could raise their rates to what they should be (and they could
afford the customer exodus it would cause, because of their market
share). I guess that's called a pawn storm :)
It will be very interesting.
But I could be dead wrong :) This is just the feeling I'm getting,
watching the action from the stands.
Adam Maloney
NOT a market analyst
Systems Administrator
Sihope Communications
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