I was snookered the other day by a Verizon FIOS flyer touting a $79 combo deal. After cutting through the facade, I realized that if I wanted a similar set of services with Verizon compared to my existing Comcast offerings, I’d be paying a hefty premium. Even in the face of “better service” from Verizon, I couldn’t justify making the switch. The switchover costs are probably much more expensive than you think – here’s why:
It started with the initial flyer with FIOS splashed all over it. I recalled being offered a $99 triple play from Verizon a few months ago. At that time, I had opted not to switch since the costs didn’t justify it, they couldn’t port my number, and I was able to easily save 44% on my Comcast Bill with a simple chat session . Well, when I saw $79, I figured, “Hey, they’re really looking to court new customers now, let me check this out!”. Well, the fine print actually read that this was ONLY for “FIOS TVand phone” – internet was extra. So, this deal was no better than prior offers – actually, worse. However, since I saw this as an opportune blog post, I let the customer service rep elaborate on just what it would cost to get an equivalent package.
Current Comcast Package:
- Triple Play Bundle: Phone, Internet, cable
- Phone and Internet are basic/standard
- Cable – in addition to the typical several hundred channels, we have the HBO, Showtime and Starz packages. These come free based on the deal I worked out with Comcast when I threatened to leave for FIOS previously
- HD Package/HD-DVR
- No additional boxes needed, unlimited TVs (we have 3: kitchen, family room, master BR)
Comcast Final Cost Before Taxes: $110
Verizon Requirements to Duplicate My Current Comcast Package:
- Phone/FIOS basic – cost $79.99
- Additional for Internet – cost $40.00 (Full Triple Play Starter is $119.99)
- HD DVR – cost 15.99
- Box for Each and Every TV – cost $3.99 ea x 2 = $8 [note: many households have more than one TV]
- Premium channel Package (equiv HBA, Show, Starz) – cost $25 [note: not everyone watches premium channels]
- 1 time Signup Fee – cost $49.99 *excluded from analysis as a one-time cost
- Free gift card of some sort * also excluded from analysis as a one-time cost
Verizon Final Monthly Cost Before Taxes (excluding one-time fees/gift cards): $169
*Note that this was an introductory year offering only – I’ve heard that after the first year, Verizon jacks your rate by at least $10/month. It’s business and they’re viewed as the better game in town, why wouldn’t they? But, consider this as a future cost as well. Greater increases than your existing service provider who’s working harder to retain you.
*Verizon’s cost is net of taxes as well. Since they wouldn’t provide estimated taxes over the phone (they don’t want you to know your additional tax liability until you’re already a customer and recieve your first bill. It wouldn’t be rocket science to quote you what your neighbor’s bill says for equivalent offerings), I compared both on a pre-tax basis assuming the taxes are roughly equivalent between the two.
So, on an annual basis, you’re going to pay $59*12= $708 more for Verizon service over Comcast. Of course, I’m using a reduced Comcast cost basis, but as I outlined previously, anyone being offered both services in the same area should be able to utilize the same tactics I did to win an immediate 15-20% reduction in your bill since Comcast fears losing more customers to Verizon. I like to look at investments and expenses over multiyear periods, usually 5 or 10.
Conservatively, over a 5 year basis, you’re paying over $3500 more to use Verizon than Comcast.
What do you get?
- Verizon claims their download speeds are faster. This isn’t really a big deal to me; we’re nowhere near watching all content through the internet yet (TVs aren’t going away any time soon) and I’m not a master internet pirate uploader. Frankly, I don’t think people surfing around, shopping here and there or doing a blog post would notice a performance difference between the two.
- HD Quality – I’ve seen claims that FIOS offers a better HD picture than Comcast HD as well. Again, I haven’t noticed the difference between houses that have different services on similar HD TVs and I don’t waste away my weekends watching every football game played around the country – it’s just not that important to me. The HD quality through Comcast seems sufficient to me.
- Comcast had greater On-Demand offerings at last check. Perhaps Verizon has improved recently, but that was my last data point when I last considered.
What are your thoughts? Did I miss anything in my analysis? Is it worth the extra money?
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