Comcast sets Baltimore, D.C. phone service

May 19, 2006|By STACEY HIRSH | STACEY HIRSH,SUN REPORTER

Comcast Corp., Maryland's dominant cable provider, will launch its phone service in Washington in June and in Baltimore City in July, a company executive said yesterday.

"I think the consumers, more and more of them, are looking to bundle their products," said Michael Doyle, president of Comcast's eastern division. "They don't want to pay three bills."

Comcast's launch of phone service comes at a time when phone, Internet and cable services are converging and telecommunications companies are moving toward offering multiple services. Telephone giant Verizon Communications Inc., for instance, has moved into Comcast's arena with its rollout of fiber-optic cable television service known as FiOS in parts of Maryland and around the country.

FOR THE RECORD - An article in Friday's Business section incorrectly stated the type of agreement that Verizon Communications Inc. has with Baltimore County. The county has agreed to allow the company to upgrade its utility lines. Verizon still must obtain a franchise agreement before it can provide television services.
The Sun regrets the errors.

"The cable guys have gotten into telephone, and the telephone guys are getting into ... cable. They're each playing in each other's backyard," said Brahm Eiley, president of the Convergence Consulting Group, a consulting and research firm in Toronto.

In December, Comcast rolled out its phone service in Baltimore, Harford, Howard, Anne Arundel and Montgomery counties and parts of Virginia. Doyle said the company now has more than 100,000 phone customers in its eastern division, which includes Pennsylvania, New Jersey, Delaware, Virginia, Maryland and Washington. In the Baltimore-Washington market, Comcast has more than 25,000 phone customers and is expecting more than 130,000 by the end of the year, he said.

Doyle said that 98 percent of Comcast's telephone customers in the eastern division also subscribe to another product, such as cable or Internet. Eighty percent of the company's telephone customers in that region are "triple play" customers, using phone, video and Internet services through Comcast.

"In this world, that's what we want," Doyle said. "We want the multiple products in the home because it breeds a higher degree of loyalty and it reduces churn. People will keep the products."

Cable companies had 3.5 million residential telephone customers at the end of 2004 and 5.7 million at the end of last year, according to the Convergence Consulting Group. The group estimates that cable companies will have more than 9 million residential phone customers this year and more than 19 million by 2008.

Verizon said it does not feel threatened by Comcast's foray into the phone business. The phone company has not released figures on how many FiOS TV customers it has. Verizon has 5.7 million broadband customers nationwide.

"The name of the game is competition and giving customers what they want," Verizon spokeswoman Sandra Arnette said in a statement. "A large part of that is bundling products and services. And, Comcast knows that to stay competitive it must round out its bundle - something that Verizon already has done."

Arnette also said that Verizon's VoiceWing Broadband phone service, which allows customers to make phone calls over the Internet, is available in parts of Baltimore. She said Verizon offers FiOS TV in parts of Howard County and hopes to roll it out in other areas of Maryland soon. This week the company received a franchise agreement to offer cable service in Baltimore County.

Comcast did not release specific dates for the launch of its phone service in Baltimore City and Washington.

The price for customers adding new phone, Internet or cable service through Comcast will be $33 a month per new service for the next 12 months, as long as the customer is subscribing to all three services, the company said.

stacey.hirsh@baltsun.com

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