One of the telcos’ famous promises to consumers as they roll out digital TV services: Competition lowers prices. But it doesn’t promise to keep them down.
According to a letter from Verizon to its customers (and posted to BroadbandReports’ message boards), the telco is planning on jacking the price of its FiOS Premier TV package up $5 per month to $47.99, a 12% increase from its current $42.99 monthly price.
In a report today, Bernstein Research analyst Craig Moffett says that’s about 20% higher than Verizon’s initial FiOS pricing two years ago, and is “almost certainly” larger than forthcoming rate hikes from cable and satellite rivals.
This move may help Verizon improve its margins on FiOS, which have to be slim at best. But their customer acquisition costs aren’t dropping anytime soon: As we reported last week, it’s now courting new customers with a free 19″ LCD HDTV.