RCN Corp. is trying a new bundling approach that cuts the entry price for a triple-play package by 12% or more by cutting back on Internet speed and phone calls.
This month, the competitive cable and telecom provider introduced a new $82.99-per-month base package that includes Internet service at 768 Kilobits per second, about 80 cable channels and local phone service.
In 2005, the lowest priced triple-play package — with faster download speeds and “unlimited” phone service — was priced at $95 to $100, according to Mark Chinn, vice president of products and pricing.
Two-thirds of RCN’s approximately 411,000 customers take the former entry package, dubbed the “cornerstone” offer, including data service at 5 Megabits per second, approximately 80 video channels and unlimited calling, Chinn said.
The price on the new entry package is guaranteed until May 2007 and customers don’t have to sign a contract.
Subscribers also can enhance each product in the bundle, for a fee — for example, spending $10 more for higher Internet speeds.
With the new entry package, RCN runs the risk of downgrades by some current customers. But it hopes to add nonsubscribers who currently use dialup services but don’t want to pay for full-fledged cable-modem fees, Chinn said.
He called downgrades a “short-term risk” because subscriber surveys show satisfaction is high with current services.
RCN also created a new blended premium tier, called the “New Digital Vision” tier, that includes 30 channels of Showtime, The Movie Channel, Cinemax, Encore and Starz — plus a suite of digital channels, digital music and parental controls — for $19.95 monthly.
For $154.99, RCN offers an all-you-can-eat bundle: a 10-Mbps data service (rising to 20 Mbps later this year), all available digital and premium channels and unlimited calling with all available features.
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