How does an extra $150 sound?

Verizon is dangling $150 prepaid Visa cards to all new customers. The catch? You must order a Verizon telephone/Internet/TV service bundle by June 20.

If you were going  to order service anyway, that’s a nice bonus, especially because it includes Verizon’s sought-after FiOS TV and Internet service, which for this special includes the $99.99/month package.  

But for folks in non-FiOS areas (which is most of us), triple-service bundles include DirecTV. The cheapest plan is $79.99/month, which includes 150 channels, while the most expensive is $119/month and includes HD channels and a digital video recorder. Order the bundle online and get $5/month discount.

Some of the fine print: You must continue service for at least six months to keep the $150, and by adding Internet service, you must commit to one year. The $150 cash card is given to new customers automatically, by the way.

Over at AT&T, however, there are deals that will get new customers $50 and $100 cash back. And Time Warner Cable discounts its All the Best bundle by $20/month for the first year. And Cox has an amazingly cheap offer on the three services for just $42.50 a month. See the chart way below…

Of course, the price battle is nothing new. I wrote last year about how DSL prices were down to $10/month. This is all part of the same game, although in this instance, Verizon appeals to the  economy. Said Susan Retta, Verizon vice president of consumer product management, in a statement: 

“We are helping consumers handle today’s strained budgets by providing greater value than what cable companies offer.”

According to a report titled “The Science of Churn” by Forrester Research, 50 million consumers in the U.S. will ditch their TV or telecom provider this year. That’s one in seven people in the next six months! Some reasons are unavoidable, such as moving, but many switch because they look for something cheaper or for better customer service.

 One major point that Forrester analyst Sally M. Cohen makes in her report is that these promotional, limited-time deals are part of the problem:

“There’s no surprise here. While consumers are often attracted to the value of $100 triple-play service, the monthly cost usually goes up after nine to 12 months or promotional pricing. This is when the consumer starts looking for the next deal.” 

Hello! Makes sense. Even if I was satisfied with my TV/phone service, the shock of a higher monthly bill would surely knock me back into the market. 

But alas, the promotional deals will continue. Here’s a quick round up of the cheapest bundles available today for Orange County residents. Keep in mind, most are limited-time offers with some sort of commitment:

Source: TV company Web sites as of April 21, 2009

More on Verizon’s offer

Of course, the problem with the FiOS offer is that not everyone in Orange County can order the alternative to cable TV. Its slow rollout here in Orange County has frustrated many readers, but Verizon promises it is still expanding here. 

The cheapest way to get into this is Verizon’s $79.99/month package, which includes telephone service (unlimited local/long distance in U.S.), 1 megabit-per-second DSL Internet and DirecTV’s Choice package of 150 channels (regularly $55/month). Verizon is also tossing in a free phone consultation for customers who need help setting up a home computer network or have other PC issues. Typically, it charges $90 for that.

And a quick note: Opting for faster Internet is just a few bucks more. For $10 more per month, the triple-play package adds Internet download speeds of 3 Mbps although some homes could get up to 7.1 Mbps (Kevin Laverty, with Verizon, explains that the 7.1 Mbps service “is limited to households that have a ‘loop’ length of 10,500 ft. or less from the nearest Verizon central office”). Another $10/month (making it $99.99/month) adds DirecTV Plus, which includes a DVR and 1 year of Showtime.

It’s difficult to sort through all the details of the bundles, but that is also one way companies can keep customers. According to Forrester, the hassle of switching and understanding new plans leads to customer inertia.

Hence, the $150.

Says Laverty, “… it’s all about providing incentives to the consumer which include the prepaid cards as a big part of the bonus they get when signing up.”

More details on Verizon’s bundles at www.verizon.net/highspeed or 1-800-483-4000.

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