Verizon — feeling the pain of customer cancellations over high pay-TV prices — is killing off bundles and contracts for its Fios line of TV, broadband and phone services.
Instead, it’s introducing “Mix & Match on Fios,” a new pricing plan under which it is selling pay-TV, internet and phone as standalone products. For Verizon, it’s the end of the “triple play” bundle, which has locked customers into long-term contracts in exchange for a price break.
The new Verizon strategy provides more customized options in the TV packages. With the entry-level “Your Fios TV” package, priced at $50 per month, customers can select their five favorite channels from among a group of 200 — and Verizon will recommend a package with around 125 channels that’s the best fit. Verizon also is selling YouTube TV (for $50 monthly) to Fios Internet customers if that’s their preference, under a pact the telco signed last year with Google.
“Customers don’t want to be forced into bundles and contracts. They don’t want surprises on their bill at the end of the month,” said Frank Boulben, SVP of consumer marketing and products at Verizon.
Under the new pricing, Verizon is offering three Fios Internet options: 100 Mbps ($39.99 per month), 300 Mbps ($59.99) and a Gigabit Connection ($79.99). The telco is still giving new Fios broadband subs one year free of Disney Plus, an offer that currently runs through June 1, 2020. Unlimited home phone service is available for $20 per month.
All of the TV plans include local broadcast networks, including ABC, CBS, NBC, Fox, Telemundo and Univision. The video plans are: Your Fios TV ($50 per month for 125+ channels, plus a $12 monthly fee per set-top); More Fios TV ($70 for 300+ channels, includes one set-top); Most Fios TV ($90 for 425+ channels; includes a set-top box and $12 DVR service credit); and YouTube TV ($49.99 for 70+ channels).
Verizon also is offering a Fios TV Test Drive option ($50 per month) that includes all the channels it offers for 60 days and, based on the household’s actual viewership, will recommend a plan that is the best match. With the new TV plan configurations, Boulben said, “We are absolutely compliant with our contracts with programmers.”
Current Fios customers can switch over to the new Mix & Match plans at any time, Boulben said. And subscribers can change from one service tier to another with no penalty, and they’re also free to cancel anytime without an early termination fee.
In addition, Verizon is no longer offering initial discounts on Fios service. The problem there is the sticker shock once the promotional period ends (i.e., after 12 or 24 months). With Mix & Match, “there’s not a promotional roll-off and a dramatic price increase, which is the case today. That’s a major pain point for customers,” Boulben said. “They feel the advertised price isn’t the actual price.”
As for whether the end of Fios bundles and contracts will increase churn, Boulben said he expects the opposite: “We are responding to what customers want. We have a lot of customers who will be saving money. They key is that we are making it possible for them to choose what they want without any surprises.”
Like the rest of the pay-TV industry, Verizon has felt the sting of cord-cutting. In the third quarter of 2019, the company reported a net loss of 67,000 Fios Video customers — to stand at 4.2 million, or down by 220,000 year over year (a 5% decline).
While it’s doing away with Fios bundles, Verizon does offer a discount to customers who have Fios and wireless service: The Mobile+Home Rewards program provides a savings of $20 per month, plus a $10 monthly credit toward a customer’s next device purchase.
Meanwhile, Verizon also offers 5G wireless broadband home customers Stream TV, a device that provides accessing to over-the-top video streaming services like HBO, Hulu and YouTube.