NEARLY 43 PERCENT OF U.S. ONLINE HOUSEHOLDS SUBSCRIBE TO BUNDLED COMMUNICATIONS AND ENTERTAINMENT SERVICES FROM THE SAME PROVIDER,

Telephia:Price Breaks Drive Adoption of Bundled Services more than Convenience or Reliability

More than 31 million online homes or two out of five online U.S. households subscribe to bundled services from one provider. Bundled services can include any combination of Internet, TV, phone, and mobile phone subscriptions in a single package.

Double and triple-play bundles were the most popular with consumers. The Internet/TV bundle led all other service combinations with nearly 13 million households, while more than 10 million households subscribed to an Internet/Phone combination. More than five million households subscribed to a triple-play service combination of TV/Phone/Internet, while approximately 300,000 subscribed to quadruple-play bundles.

Consumers gain a number of advantages from subscribing to a bundled program, including cost-savings, integrated billing, and a single point of contact for services The key for service providers will be to develop pricing and product offers for each segment that drive bundling purchases and the long-term value of the customer.

Households Cite Price as the #1 Reason for Subscribing to Bundled Services

Price is the top reason why households bundle, regardless of their bundle type (see Table 1). Roughly one-third of households subscribing to bundled services cite that convenience was a strong factor in the decision to combine their service subscriptions. Across all bundle types, reliability of service was least important.

While price is a key decision driver, bundle purchasers are also looking for superior customer experience and will not switch if they believe the new provider has worse quality. This is why all the service providers are working swiftly to build their reputation for responsive and reliable support.

Table 1: Consumer Factors for Bundling (U.S.)

Primary Reason

Top Two-Plays

Top Three-Play

Four-Play

for Bundle
									Internet/ Phone	Internet/ TV	Internet/TV/ Phone	Internet/TV/ Phone/Wireless
Price (promotions, discounts)	42.8%	46.0%	53.4%	60.9%
Convenience (single bill, one point of contact for customer service)	35.4%	28.9%	33.5%	29.2%
Reliability of service provider	10.7%	12.2%	7.4%	9.5%
Other	11.1%	12.9%	5.7%	.4%

Telephia’s Total Communications Survey, Q2 06

Publ 20060906