New data from Ofcom, the U.K. communications regulator, confirms the fact that consumer service bundling is a form of discounting.
So despite some advantages for customer acquisition and retention, as well as average revenue per account, quadruple-play bundles including mobile service might mean even more discounting.
Of course, within a bundle it is hard to say for certain which particular services get discounted the most. Historically, telcos have probably discounted video to protect voice prices, while cable TV companies have merchandised voice to protect video prices.
In the future, when quadruple-play offers are more prevalent, voice or video might be discounted to protect mobile or high speed access prices.
Telcos are more likely to discount high speed access to protect mobile profit margins, while cable TV companies are more likely to discount mobile to protect high speed access, at least in the U.S. market.
Some 68 percent of U.K. consumers reported buying at least two of their communications services together in a bundle in 2016, a five percentage point increase on the previous year’s figure (63 percent).
Dual-play packages of landline and broadband, and triple-play packages of landline, broadband and TV, were the most popular representing most of the buying.
Promotional discounts tend to target customers purchasing bundled services, with the discount most frequently applied to the overall bundle price or the fixed broadband or TV elements of the bundle.
On average, 94 percent of all dual-play plans and 98 percent of triple-play plans offered by the UK’s four largest residential fixed telecoms providers (BT, Sky, TalkTalk and Virgin Media) had some element of discounts in 2015, compared to 86 percent of dual-play and 79 percent of triple-play plans offered in 2013.
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