AT&T Charging Higher than Competitors in Google’s Backyard

AT&T Charging Higher than Competitors in Google’s Backyard

This week Google’s backyard saw a new entrant; AT&T’s high-speed broadband service, the only difference being that a higher price was being charged as opposed to places where it is in competition with the search engine giant. In Cupertino-California, the telecom giant is charging $110 for its 1-gigabit-per-second GigaPower service. Even though Google has its headquarters in Mountain View, which is quite nearby, it is not offering its Google Fiber service in Cupertino where the headquarters of Apple Inc. are located. A much lower price is charged by AT&T in Austin, Texas, which is about $70 and a similar rate is charged in the Kansas area.

The point to be noted is that the telecom giant is charging less in areas where it is in competition with Google such as areas in North Carolina including Raleigh-Durham and Charlotte, which are the target future locations of Google Fiber. The pricing indicates the impact the internet company has had when it decided to expand beyond its core business of search and moving onto other pastures such as high-speed broadband services and charging less for it. Provo, Kansas City and Austin, Utah are the three cities in which AT&T operates and it is charging $70 a month for its service in these areas.

The senior vice president of the company’s U-verse internet and TV service, Eric Boyer said that firm is still experimenting with how the new service should be priced and changes are being made as it learns about the habits of its customers. He said that they were trying to understand the response of different markets. In Dallas, the telecom company recently decided to reduce the price of GigaPower from $120 to $110. In addition, until March 17, the prices in Raleigh-Durham and Winston-Salem, N.C. were $120, but then they were reduced to $70.

It is assumed via these prices that the browsing habits of users can be tracked by the company for supporting its advertising efforts. An additional $29 has to be paid by subscribers every month if they decide they don’t wish to be tracked. Google had announced its plans of introducing Google Fiber in Raleigh-Durham and Charlotte in late January. Nearly a year ago, AT&T had accelerated its build out against Fiber and it has now spread in seven cities as compared to Google’s Fiber, which is available in three cities currently. The telecom company has stated that the internet service is a part of its core operations.

AT&T also said that if the acquisition of DirecTV closes for $49 billion, it will have access to greater cash flows, which it can use for expanding its broad network even more. There is a limit of 1000 gigabytes per month that can be used by customers of the GigaPower service. This allotment is enormous, but different from rivals such as Verizon Communications and Google, which don’t impose limits on their users. AT&T said that customers need not worry because the cap is quite high so there isn’t any problem.

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