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?
Related posts:
- How Stupid (Or Lazy) Do They Think I Am?
- It’s 2010! Get Off Your Butt and Do Something Quick and Easy to Improve Your Finances!
- How I Saved 44% on my Comcast Bill-Chat Transcript ($1104 per Year)
- Weekend Reading – Balloon Boy Edition
If you enjoyed this post, you can get free updates through RSS Feed or via Email whenever a new post is published. Rest assured that you can unsubscribe at any time via the automated system and your information will not be sold, archived or utilized for any other "nefarious" purposes.
{ 1 trackback }
{ 11 comments… read them below or add one }
I personally have BrightHouse rather than FIOS but I too have received a ton of mail and other marketing pitches all touting how FIOS is supposed to be better. I am still not convinced though that the picture or speed is any better but I could be wrong.
.-= Credit Card Chaser´s last blog ..Wells Fargo Credit Cards to be Marketed to Wachovia Customers =-.
[Reply]
I hate Cablevision which is why I would love to switch. But ignoring the fact that I am stuck since no one thought of laying down some wires when they built my 2007 condo neighborhood – I think the analysis ignores the “The Gift.”
When My parents signed up (again because of a sole hatred of Cablevision) they received a 19 Inch LCD, at the time it probably cost a couple hundred bucks, so that would eat it into that $500 number you provided.
.-= Evan´s last blog ..Buying Life Insurance on a Child’s Life =-.
[Reply]
Comcast will normally raise rates after the 1 year period and doesn’t automatically throw in free premium channels. You got discounts by negotiating with Comcast. If you negotiate deals with Comcast then I assume you could also possibly negotiate deals with Verizon. Seems to me that the 2 will try and keep you as a cusotmer and one-up the other so if you’ve got Comaast they’ll give you deals to keep you but if you’ve got Verizon and you threaten to leave for Comcast you might also get the same kind of deals. In your situation it makes sense to stay with Comcast given the deals they’ve given you. But if you were on Verizon and had negotiated a good deal by threatening to leave for Comcast then the sitatuion would just be reversed.
.-= Jim´s last blog ..What if I made $42k? =-.
[Reply]
Jim,
Thanks for your comment. To address a few thoughts:
Since FIOS is a new offering, in the vast majority of the cases, you’re looking at existing Comcast customers defecting to FIOS, not the other way around. Since there is a net defection from Comcast TO FIOS, the leverage is with the Comcast customers and existing FIOS customers have little or no leverage.
If a new FIOS customer is threatening to leave FIOS to go to Comcast, the rep will basically laugh in their face. Here’s why:
1) Since FIOS is so new, by default, the customer is still in the early cancellation period and would be facing a severe cancellation charge
2) FIOS is viewed as having a superior offering and as such, nobody’s really leaving. They’ll know you’re bluffing and politely say, “good luck. so, do you really want to cancel?”
People ARE actually leaving Comcast in droves, hence the desperate attempts to keep existing customers since acquisition costs are high and marginal costs to service a customer are negligible.
Perhaps in a few years when the novelty has worn off and if Comcast can further differentiate itself with other value offerings, there could be net defections from FIOS to Comcast, but for the time being, highly unlikely IMHO.
[Reply]
Darwin, I think you’re right on all counts. I also agree with your original post that the Comcast deal is better for you right now. I was thinking more from my perspective where I live. Here, FIOS has been around for a couple years and Verizon and Comcast have been actively competing and trying to one-up the other. I get mail from both companies about weekly advertising some deal or bundle discount.
.-= Jim´s last blog ..Can you open a Roth IRA? =-.
[Reply]
Good information. I’m about to switch from Verizon FIOS to Comcast, and I am doing some research. I’ve had Verizon FIOS for several years, and was pleased. But on January 19th, I stopped being able to use FTP to access the websites I maintain. The servers disconnect immediately after I access them. My laptop works fine if I use my friend’s Comcast service, but will not work with anyone’s Verizon service. Verizon FIOS tech support refuses to help. They say that if I can get on the Internet, that’s all they care about. Their tech support is worse than bad. For me it is non-existent.
[Reply]
I just got FiOS and i love it. I am saving $76. I have better internet speed and over 200 more channels. Fios have triple play for $89/mo for 2 yrs. u have extra cable box for comcast and u have 3 extra for fios. thats why ur price is higher. the DVR is same for every carrier. Dont fool your self. You Will save money with FiOS and get more out of it. Remember FiOS is dedicated line not shared like cable. its prob that u cant cat fios cuz of the credit check hahahahaha.
[Reply]
well look this cable 20 Mbps Internet service $52/month
FIOS 25 Mbps Internet service $65/month
what‘s the different？ it‘s same money per 1mbps/$2.6
feel like scam
[Reply]
maureen Reply:
May 22nd, 2010 at 7:51 pm
@terry, I will start out saying that i work for comcast (although i am not biased) I see and hear every day the good and bad about both companys. It dosent matter what company your going with, they will offer you an absurd promotion to get you in and eventually that promise will expire. Yes verizon is coming out with some pretty good ad capaigns but thats really all they are. I got a flyer on my door just last week saying 79.99 amonth for tripple play but in the fine print it said extra fees are applied for internet, price is good for a year but with a 2year contract in wich the second year would be more than 250.00 a month ( i called just to compare). The good thing with comcast is that our tripple play prices are basically the same as verizon but we do not require contracts unless you sign up for one of the promo’s including a lap top, gift card ect. Also regaurdless of what anyone says verizon and comcast uses the same lines. Comcast uses “FIOS” as well but its only run through the poles in your neighborhood or underground. The lines going from the main line to your home is regular coax cables for both companys because your connections in your home is not compatiable with fios they would have to rerun every cable line in every customers home. My last point is that yes, verizon has more channels and hd channels but for those of you who actually have verizon you know that most of those “extra channels” are filler channels with stupid things like “how to boil water”. When you take out all of those uselss “how to’s” comcast has way more channels in standard definition as well as high def. Personally it doesnt matter to me, just a little insight from someone who hears all day “im going to verizon” vs “i just transfered from verizon”.
[Reply]
Jared Reply:
June 28th, 2010 at 10:27 am
@maureen, You’re absolutely biased. I’m not going to disagree with you that both companies are pretty similar with their bait promotions, FiOS is absolutely the better company for the customer, currently at least. I was a comcast customer for 10 years before fios was available in my area. Not only is it easy to get a better overall rate from Fios, but they actually have much less compression on their TV channels which makes a huge difference for HD customers especially. They also offer faster internet WITHOUT bandwidth caps and WITHOUT traffic deprioritization for usage periods over 15 mins long (streaming video, downloading, etc) – Comcast does all the above, and used to do much worse (block certain types of legitimate internet traffic entirely, like Bit Torrent).
I’m paying about $50 less a month with FiOS (I pay $99, and don’t use the home phone service), and I’m comparing it to the best price I could ever finagle from Comcast. I also get faster internet, more channels, and HBO on top of the better price.
Comcast is also a customer service nightmare, whereas Verizon has much better technical support (although Verizon, as a whole company, has terrible billing/financial service.. but so does comcast).
[Reply]
If you threatened to cancel FioS you would also get new deals/ special offers all of a sudden such as saving a good 10-30 dollars or getting HBO free etc. Depends on your specific house and how good you are at negotiating… (The same case with comcast) The real question is how fast is your internet…
[Reply]
I have fios almost one year. Six months after we had the service I noticed my bill going up $5 every month . They also was charging me for Starz play and games on demand which is $11+ a month. I asked why and I wanted to lower my bill. He looked over my account and switch my service claiming to save me money. I just got the bill in last week and it is $20 more than my last bill. I’m going to be going back to comcast. They have better and free on demand. The only thing good for fios is the internet speed. I can deal with comcast. Fios is just way too expensive. Save money and go to comcast or PAY OUT YOUR A**!!!
[Reply]
How do you get your Comcast triple play for $110. i have the same package with the same movie channels and mine is $225. Please let me in on your secret! Or could it be location in the US? i am in a metropolitan area. Could that be the difference?
Thanks.
[Reply]