Verizon Communications next month will stop offering so-called "naked DSL" -- high-speed Internet without landline phone service -- in a move that flies in the face of the trend of consumers ditching their home phones for mobile handsets.
Slightly more than 10% of Verizon's DSL subscribers use the standalone service, the company said Friday. But starting May 6, customers won't be able to sign up for DSL without also getting a wired voice service, which adds about $5 to the monthly bill before taxes.
Existing users of naked DSL will be able to keep their plans as long as they don't make changes to their service. The carrier said it is giving its current customers advance notice so those who want to make changes to their plans can do so before the shift takes place.
While Verizon is restoring the tie between wireline Internet and voice services, many consumers are choosing to cut the cord. Verizon reported an 8% decline in residential retail voice connections in the year ended last Sept. 30, which it blamed on subscribers substituting wireless voice as well as broadband, cable and VoIP (voice over Internet Protocol) services. The carrier has about 24 million total voice subscribers.
The company's Verizon Wireless venture is benefitting from the mobile trend, gaining 1.5 million mobile subscribers in the quarter ended Jan. 24, reaching a total of 108.7 million. But revenue from its wireline business is falling.
In a prepared statement on Friday, the carrier said discontinuing naked DSL would reduce its costs.
"By discontinuing a stand-alone DSL offer after May 6, we can control our cost structure more effectively, enabling us to continue providing competitively priced services to existing and new customers," Verizon said.
However, the change will remove two options that are slightly less expensive for customers who don't need a landline phone. On its website, Verizon currently offers naked DSL for $24.99 per month, before taxes, for a service with downstream speeds of 500K bps (bits per second) to 1M bps. The same level of DSL with a voice line costs $29.99 per month. A faster service, with downstream speeds ranging from 1.1M bps to 15M bps, costs $39.99 per month without voice and $44.99 with it.
While the move may increase Verizon's landline voice rolls, it could also give a boost to the carrier's faster, higher-priced FiOS service where it is available. FiOS, which runs over fiber to each subscriber's home, is available in bundles of voice, TV and Internet access at 15M bps downstream and 5M bps upstream. A limited-time offer on Verizon's site Friday offered that "triple play" bundle for $84.99 per month for two years with a two-year contract.
In the fourth quarter of last year, Verizon said it added 201,000 net new FiOS data connections for a total of 4.8 million. FiOS TV subscriptions were slightly behind that at 4.2 million.