Broadbanders Bubbly Over Bundles
The findings come from a new study on triple-play services bundling that will be released by SupportSoft Inc., a provider of triple-play service management software, at Supercomm this week.
The survey found that 82 percent of broadband users are interested in receiving combined voice, video, and high-speed data services in one bundle from one provider (see IPTV Scramble Is On).
Despite that, 68 percent of cable broadband customers and 60 percent of DSL subscribers expect problems installing VOIP or IPTV service, according to the survey. But two thirds of them were “unsure or wrong” about how VOIP and IPTV services are installed (see Carriers Claim IPTV Wiring Worries ).
“I think what compels people toward the bundle is they want to have a single service provider where there is one throat to choke if something goes wrong and one body to hug if everything goes right,” says Bruce Mowery, VP of marketing at SupportSoft. [Ed. note: Have you hugged your service provider today?] Mowery believes the desire for product bundles will increase competition between cable providers and telcos.
Critics of new triple-play bundling schemes often say there is nothing intuitive about bundling video, voice, and data. Vonage Holdings Corp. CEO Jeffrey Citron compares it to a crude-oil salesman suddenly deciding to sell bottled water, too (see Citron: Triple Play Is Tripe).
Others say its really all about price in the end. Cable company analyst Craig Moffett of Sanford C. Bernstein & Co. Inc. cites industry research showing that cable customers love the triple-play bundles, so long as they shave at least 20 percent off the bill.
But most industry observers believe the question of bundle profitability is somewhat moot. The telcos are being forced into the battle of the bundle because they must counter the cable companies’ move into voice services, they say. Mowery notes that the cable companies recently announced the delivery of the millionth voice connection over co-ax (see Cable VOIP Subs Jump 900% and Cable Analysts Long to Be Ignored).
Mowery believes the core motivation behind the bundle may be about operation expense. “Service providers can discount a bundle of services, but also their cost of delivery is less than if they have many customers all buying single services."
Of the broadband users surveyed, 37 percent thought customer service would “improve” or “improve significantly,” while 17.5 percent thought it would get worse.
The survey sampled cable and DSL broadband users in the U.S. during January 2005. It was commissioned by SupportSoft and was conducted by an independent market research firm.
The broadband users who answered the survey liked the idea of “one bill to pay for all three services,” according to the survey report [ed. note: and one ring to bind them...].
The results will be released at a Supercomm panel Thursday, titled “Cable: The Triple Play Pacesetter,” featuring executives from Charter Communications (Nasdaq: CHTR), Axerra Networks Inc., C-COR Corp. (Nasdaq: CCBL) and SupportSoft (see C-Cor: We'll Get Our Act Together).
— Mark Sullivan, Reporter, Light Reading