Verizon Communications will begin selling satellite TV service in Rhode Island next Tuesday, then move "quickly" to offer it in the rest of the country, company executives said.
The nation's largest phone company will resell Hughes Electronics' DirecTV's service, in a plan to match cable competitors' "triple play" of telephone, TV and broadband Internet offerings, Verizon said Thursday.
In Rhode Island, Verizon Communications Vice Chairman Lawrence Babbio said Verizon will charge $35 a month for the DirecTV service, when it's bundled with a long-distance telephone and broadband Internet service. That's about $17 a month less than what Cox Communications, Verizon's Rhode Island competitor, is charging for its cable TV service. A Cox representative was not immediately available for comment.
"The cable folks will respond the way they want to respond," Babbio said.
Cable companies are competing more aggressively with the phone giants, mainly by offering service packages that bundle video programming, broadband Internet and voice calling. The Bells did not have a comparable offer for video and have witnessed an erosion of their local phone businesses. In response, Verizon and the three other regional Bell operating companies have banded with satellite TV providers such
as DirecTV and EchoStar Satellite's Dish Network to package their
voice and data offerings with video.
The phone-cable pacts vary in depth. Under BellSouth's joint venture with DirecTV, the phone company will market the service, sell it, schedule equipment installation and run all its billing. SBC Communications took its pact with EchoStar's Dish Network a step further by investing $500 million in the company as proof of its commitment. The Qwest agreement with EchoStar entails the marketing and sales of Dish Network subscriptions.
Verizon announced its video venture when reporting its fourth-quarter results. The company lost $1.46 billion, or 53 cents a share, compared with a profit of $2.3 billion, or 83 cents a share, a year ago. The company blamed the loss mainly on costs associated with a planned 10 percent reduction in its work force it has carried out in recent months months.
Verizon Wireless, the wireless venture Verizon Communications partly owns, reported Thursday that it added 1.5 million customers in the fourth quarter, a record amount for the company.