It wasn't that long ago at all that I was asking how low could SBC Communications
The latest development in this ever-interesting story of battles over pricing and product bundles is that SBC will offer satellite TV from EchoStar
Just a little refresher: Early this month, SBC lowered the bar on high-speed Internet costs by slashing its monthly fee to $14.95 for a year -- the caveat being, the price was available only to new customers who ordered it over the Internet. Now, the company has expanded that promotion to include new customers who order it via telephone as well.
The $14.95 deal certainly did bring up the concept of "price war," and a Wall Street Journal article at least partially illustrated that that has indeed come to pass, outlining some examples where rivals such as Comcast
SBC may be pushing a new promotion but this is certainly not a new story. The logic here, of course, is to grab as many customers as possible while short-term profit margins take a backseat to the growth plan, which is achieved through extreme competitive aggression. It's a plan that, in the long run, very well could be successful and forward-thinking on SBC's part -- but a risky one it is. Aggressive initiatives like this one that make me think that picking the winners and losers in telecom is speculative and challenging at best for investors, and personally, I prefer watching from the sidelines.
Alyce Lomax does not own shares of any of the companies mentioned.
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