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AT&T Chops DSL Prices Further

How low can the telcos go? The cost of a DSL line plunged to yet another record low late last week when AT&T slashed the prices of its two introductory broadband tiers to $12.99 a month and $17.99 a month, respectively, for new subscribers. With prices so low, Bells like AT&T can't possibly be making a profit purely on their broadband connections. In fact, they're probably losing money on each new connection. But the phone companies don't seem to care about that anymore, so long as they can rope in the customers and sell them other services. The telcos are simply willing to sacrifice short-term profit margin for long-term loyalty. For the most part, cable operators have staunchly resisted the urge to cut broadband prices to the bone. But maybe now is finally the time. With their lower capital and operational costs, MSOs could more easily afford to charge less for broadband. More importantly, cable operators can't afford to lose their dwindling edge in the high-speed data market because of the implications for their VoIP and other broadband-enabled products. Price wars aren't fun. But sometimes there are no other good choices.
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