Verizon Communications Inc. (NYSE: VZ) is shaking up the pay-TV industry by eliminating traditional cable bundles and annual contracts. The telecommunications company will now allow their customers to select home internet speeds and television packages separately, at preset rates. Angie Klein, vice president of consumer marketing for Verizon, said, “The price you’re quoted is the price you’ll pay. This is what consumers have been telling us they want. They want more choice and visibility into what they’re paying for.”
Under the new Mix & Match on Fios pricing model, customers first choose the services they want, including broadband, TV and phone service. Verizon will sell three tiers of internet speeds: 100 Mbps for $39.99, 300 Mbps for $59.99, or the Gigabit Connection for $79.99. Customers can save $15 on the two lower-speed plans if they use their own router.
Cable-TV channels start at $50 a month, plus $12 per set-top box. The lowest-cost TV plan will offer consumers an average of 125 channels, including five they identify as their favorites. Verizon will pick an additional 100 channels based on their interests. Those channels can be changed month-to-month. There is also a TV package that includes 300 channels for $70 a month, and a package of 425 channels priced at $90 a month. Home phone service can be added to any package for an additional $20 a month.
Verizon is also doing away with the long list of extra expenses, such as video franchise fees, regional sports fees and other charges that show up on cable bills. The new structure offers Verizon a way to appeal to more customers as defections to streaming services increase. Verizon has reported net losses of Fios video customers in each quarter since the start of 2017, losing 174,000 such customers in the first nine months of 2019 alone.