Verizon is thinking about offering a $5/month landline for incoming calls and E911 access. Another idea is a $10/month line for limited local calls. These offers would be available only to the company's broadband customers and the idea is to come up with price points below the $40/month mark that would retain customers. The idea of course is to push the fact that phone service over copper works in the event of emergency.
The classic challenge for the company is how to retain customers without cannibalizing revenue. In my opinion the price points under consideration are perfect but I would use $4.95 and $9.95. In addition, I would roll out the service to companies who opt for cable phone service as well. Why? To keep the customer relationships alive and to hopefully upsell these customers over time.
Company spokesman Eric Rabe explains that customers see security in land lines as they do not require batteries to work effectively. If Verizon goes forward with these price points the goal will be to minimize cannibalization while being careful not to talk down the security of the company's other services such as wireless and FiOS.
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I called AT&T a couple months ago to cancel my $32 a month landline and to save me as a customer they offered me a rate of $16 per month which included unlimited incoming calls and 3 cents per call on outgoing. They pushed hard on the ability to reach my local police and fire should I have to dial 911, I took the bait... but $5 sounds much better.
PS: AT&T is now the local phone carrier in my area of Stamford. B4 that it was SBC and before that it was SNET.
I imagine they probably tried multiple retention campaigns at different price points and with different features/benefits. The $5/$10 price points probably worked best. As the equipment is already paid for this incremental revenue would be better than receiving nothing for the copper going into peoples’ homes.