Verizon Ends "Naked DSL" Sales

Verizon Communications in early May 2012 will stop offering "naked DSL," (high-speed Internet without landline phone service). Starting May 6, 2012, new customers won't be able to sign up for DSL without also getting a wired voice service, which adds about $5 to the monthly bill before taxes.


That change, in itself, might not be a huge deal. Only about 10 percent of Verizon's DSL subscribers use the stand-alone service, Verizon says. So the overwhelming percentage (90 percent)  of Verizon customers already buy broadband with voice service.


True, the change will affect packaging for all new broadband access customers, as well as customers making changes to their existing broadband service, such as migrating to higher speeds. Over time, that should shrink the percentage and number of naked DSL customers. 


You might ask " what's the point?


The incremental revenue shift would appear to be relatively slight.


The larger point, though, is the huge importance legacy voice revenue holds for Verizon, and other incumbent telcos.


Circuit-switched voice will in 2012 represent fully $132 billion in fixed network revenues for U.S. telcos, the Telecommunications Industry Association estimates.


Total fixed network revenue will be about $176 billion.


So circuit-switched voice will represent 75 percent of total fixed network revenue. In any business, the best results often are obtained when executives focus on the few activities that deliver the biggest returns.


Voice drives 75 percent of current revenue, even if slowly declining. So anything Verizon can do to protect that specific revenue stream affects total results more than any other single revenue source.