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Verizon aims to stoke sales with DSL offer

The phone company will begin a DSL sales promotion Friday to attempt to lure enough customers to meet its previously announced goal.

    Verizon Communications will begin a DSL sales promotion Friday to attempt to lure enough customers to meet its previously announced goal.

    The local phone giant Tuesday said it has hooked up 1 million customers to its high-speed Internet service, which is short of its year-end target.

    The company previously announced 2001 targets of 1.2 million to 1.3 million DSL (digital subscriber line) customers.

    Beginning Friday, customers can sign up for DSL service at $29.95 a month for three months. Normal pricing starts at $49.95. The promotion will run until the end of November, the company said in a conference call.

    Verizon, along with other broadband providers, has been struggling with ways to sign up new customers as subscriber growth slows. The DSL market in the United States grew 14 percent from the first quarter to the second quarter of this year, compared with growth of 55 percent during the same time last year. Verizon's DSL subscribers grew 17 percent from the first quarter to the second quarter of this year, compared with growth of 44 percent during the same time last year.

    Joe Laszlo, senior analyst at Jupiter Media Metrix, said growth fell this year because market woes and intense competition caused many independent broadband providers, such as NorthPoint Communications and Rhythms NetConnections, to fold. In addition, larger DSL carriers raised prices, which also cooled consumer interest.

    "The new promotion is a signal that they are ready to start sparking demand again...But we'll see what happens because consumers are still price sensitive," said Laszlo.

    To meet the low end of its growth targets, Verizon will have to post subscriber growth of about 20 percent from now until the end of the year.

    The company may also be trying to recover from the events following the Sept. 11 attacks on the World Trade Center and the Pentagon. Verizon pulled its marketing after the attacks and saw the number of orders it receives in a day decrease. But the company says orders have staged a strong return since then.

    To sweeten the deal, Verizon will throw in a Logitech Express Cam PC camera, as well as waive activation and equipment fees, a cost of about $250. The company will also allow consumers to try the service without a long-term obligation.

    "We have found that once people start using broadband, it becomes an essential service rather than a luxury," said Keiko Harvey, Verizon's senior vice president of advanced services.

    Most analysts agree that broadband providers can attract many more customers. Jupiter reported in a study released Wednesday that 41 percent of households with Net access will use high-speed Net access by 2006, compared with 9 percent at the end of 2000.

    But DSL companies will get intense competition from cable Internet access providers, which often offer cheaper service and have a head start in the marketplace, a lead that DSL companies must constantly watch.

    "DSL companies risk seeing the gap between their market share and cable's market share widening," Laszlo said. "With greater economic uncertainty, broadband is still a large part of the monthly bill."