Broadband Bundles of Joy
SEPTEMBER 7, 2006
Cost savings drive bundled services
By Ben Macklin - Senior Analyst
Bundled services are not new, but consumers are becoming increasingly
attracted to the cost savings and potential customer service benefits
that can accrue from bundling their Internet access with TV, phone or
cellphone services.
A new report from Telephia suggests that as of mid-2006, over 31 million
online households in the US were buying two or more services from one
provider. This equates to nearly 43% of online households.
The Internet/TV combination is the most popular bundle at the moment,
according to Telephia, with approximately 13 million households taking
that double play, compared with 10 million households taking the double
play of Internet/phone. Triple-play households only numbered five
million and the quad play, which includes mobile phone service, is still
a rarity.
Research firm IDC forecasts 84 million bundled communications
subscribers in the US in 2010, which will likely be nearly every
broadband household in the country at that time.
For its recent Broadband Prices & Bundles report, eMarketer surveyed a
selection of the leading broadband access providers in the US to assess
their multi-play offers. While Verizon does offer multichannel TV
services over its fiber-to-the-home Fios network in select areas of the
country, telecom operators have partnered with satellite TV providers in
order to include digital TV services to their bundles.
The data show that a basic triple-play bundle is currently available for
approximately $100 per month. It is worth pointing out that, typically,
cable providers offer significantly greater amounts of Internet
bandwidth to their customers than telecom operators, so value is in the
eye of the beholder. Furthermore, different phone and digital TV
services mean that it is not always an apples-to-apples comparison.
Nevertheless, the data below provide a useful snapshot of multi-play
prices as of June 2006.
*Cost savings are the primary driver for consumers to bundle their
communications services, particularly when a consumer looks at triple-
and quad-play offers, according to the Telephia data presented below.
Convenience and customer service, however, are other important drivers
that should not be underestimated by service providers.*
For more information on service bundling, see eMarketer's Broadband
Prices & Bundles: International Trends report.
http://www.emarketer.com/Article.aspx?1004149
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