No Bundle of Joy

[David Farber <dave () farber net>]

Begin forwarded message:

From: Kurt Albershardt <kurt () nv net>
Date: March 22, 2006 11:59:41 AM EST
To: dave () farber net
Subject: No Bundle of Joy

<http://www.washingtonpost.com/wp-dyn/content/article/2006/03/21/ 
AR2006032101734.html>

No Bundle of Joy
Some Buyers Find Packaged Telecom Services a Tangle of Trouble

By Yuki Noguchi
Washington Post Staff Writer
Wednesday, March 22, 2006; D01

Lori Mabry thought she was getting a good deal by putting all of her  
home communications needs in the hands of one company.

Two years ago, the Lanham resident turned to AT&T for a package of  
services including local and long-distance phone and high-speed  
Internet, saving at least $50 and the hassle of writing three checks.  
But when she tried to replace the Internet component of her package  
with another company, the whole deal fell apart, and Mabry wound up  
disgruntled.

Big telecom and cable TV companies say such "bundles" of service are  
the way of the future, and the concept is driving huge corporate  
mergers that are remaking the consumer marketplace. But customers  
have been slow to pick up on the notion, and those who have, such as  
Mabry, sometimes find that the reality has yet to match the vision.

"The assumption that everybody wants a bundle is flawed," said  
Maribel Lopez, an analyst with Forrester Research. Surveys show that  
only 5 percent of subscribers buy bundled services, and only about  
quarter of consumers are interested in buying all their services from  
a single provider, she said.

Some buyers remember the days of being in the driver's seat as they  
played long-distance providers off one another for better deals, and  
they are reluctant to put all their subscriptions in the hands of a  
single company in an industry whose customer service is notoriously  
inconsistent. The more services added to the bundle, the fewer people  
it appeals to, Lopez said.

Customers who buy bundles usually buy only two or three services at  
once, primarily to get a discount on the total bill. Over time, cable  
and telephone operators say the bigger selling point will come from  
tying the services together in innovative ways -- making it possible,  
for example, to record and view television programming on a cellphone.

> From the companies' standpoint, the more customers buy in bundles,  
> the less likely they are to switch providers. That's why phone  
> companies such as Verizon Communications Inc. are spending billions  
> of dollars on fiber-optic lines to deliver Internet and television  
> services -- so they can lure subscribers from cable providers and  
> wrap them up with full-service packages. The pending merger of AT&T  
> Inc. and BellSouth Corp. is also partly about trying to speed the  
> rollout of Internet-based TV.

...


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