Consumers prefer to buy bundled services when it comes to purchasing home communication packages.
Posted Aug 29, 2005
Customer convenience is a major propeller behind households subscribing to bundled home communication services from a sole service provider, according to a new survey by Telephia, a provider of performance measurement information to the mobile industry. Seventy-one percent of respondents to the Telephia Emerging Personal Communications Options (EPCO) survey, which includes findings from 23,000 household decision-makers across more than 100 markets surveyed, indicated that having one bill for all services was a prime benefit of buying bundled communications services from one provider. Fifty-four percent reported that discounts associated with bundled services were an advantage, while 40 percent reported that one point of contact for customer care was also of prime importance.
Technologies, including VoIP, are enabling cable TV operators and national and regional Bell operating companies to deliver services outside of their traditional core competencies and to provide stronger bundled packages, according to Kanishka Agarwal, vice president of new products at Telephia. "Cable companies are offering phone and phone companies are offering TV," he says. "The phone companies and the cable companies have been monopolies and duopolies. Now they have to realize that their world is going to get a lot more competitive."
The survey also examines the preferences of the 6,500 high-tech households surveyed, those that currently subscribe to at least three bundled or emerging services, such as broadband, VoIP, and wireless data, or have expressed intent to buy four or more services. Bundled-service packages comprising just Internet and TV has the highest percentage of high-tech household subscribers with 31 percent, while 25 percent reported having an Internet-landline bundle. A total of 65 percent of high-tech households, however, reported having two bundled services, while 54 percent of high-tech households will consider two bundled services. Additional findings indicate that 15 percent of high-tech households currently subscribe to three bundled services, and 21 percent of high-tech households are considering three bundled services.
Only 4 percent of high-tech households subscribe to TV, Internet, landline, and wireless phone services from one service provider, but 19 percent of high-tech households did note that they are considering quadruple-service bundles. Among the high-tech households surveyed, however, 27 percent reported that they have no bundled services, but 36 percent noted that they will consider bundled services. Agarwal says, though, these high-tech households have these services, just individually. "They are saying 'I get those services, I just don't have them bundled in."
Among those who have not yet purchased bundles, 27 percent responded that these offerings were not available through their service provider, 24 percent said it was cheaper not to bundle, and 21 percent noted that their preferred service provider did not offer bundling. "When you're going to invest so much in a particular service provider...the brand perceptions of service providers become really important," Agarwal says.
The advantages for consumers as providers expand into one-stop-shops are clear, but Agarwal cites benefits for the providers. "Churn drops significantly the more services you buy from that service provider. If you've got TV, Internet, your home phone, and your wireless phone all coming from one provider, it takes a lot more to switch."
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