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Bundled Communications Services - UK - January 2013

“There are motivations for consumers to take up bundled communications packages that also include some kind of mobile service, beyond the bundle-related price savings they typically offer. The increasing number of video-ondemand services and cloud-based storage solutions mean that over 2013 and into 2014, consumer access to cloudbased content is going to become an increasingly important aspect of media content consumption.”

– Samuel Gee, Technology Analyst
Some questions answered in this report include:

  • How important will mobile inclusion be in the bundles of 2013?
  • Is there a way that operators can stand out in a highly similar marketplace?
  • How will upcoming technologies impact on bundle provision?
  • Can operators reduce customer churn?

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Forecast value of triple play bundled communication sales, 2007-17
            • Market factors
              • Superfast internet connections may become more common
                • Wealth of catch-up content online may harm the multichannel proposition
                  • Quad-play packages will likely become more popular
                    • Companies brands and innovation
                      • Figure 2: Proportion of triple play customers taken by Sky, Virgin and BT, 2008-12
                    • The consumer
                      • Figure 3: Bundles or services owned by consumers, from the single provider they pay most money to, November 2012
                      • Figure 4: Amount paid for bundled communications services to the single provider consumers pay the most money to, November 2012
                      • Figure 5: Bundled package and service providers, November 2012
                      • Figure 6: Other services owned by consumers, November 2012
                      • Figure 7: Reasons that consumers choose their bundled communications services, November 2012
                      • Figure 8: Attitudes to bundled communications, November 2012
                    • What we think
                    • Issues in the Market

                        • How important will mobile inclusion be in the bundles of 2013?
                          • Is there a way that operators can stand out in a highly similar marketplace?
                            • How will upcoming technologies impact on bundle provision?
                              • Can operators reduce customer churn?
                              • Trend Application

                                  • Trend: The Suite Life
                                    • Trend: Life Hacking
                                      • 2015 Trend: Access Anything, Anywhere
                                      • Market Drivers

                                        • Key points
                                          • Fixed line customers increasingly after bundled services
                                            • Figure 9: Consumers who listed ‘bundled products’ as an important factor in choosing their landline, 2009-12
                                          • Increase in rural internet access may provoke bundle take-up
                                            • Disruptive new TV services may harm TV bundle proposition
                                              • IPTV so far fails to ignite interest
                                                  • Figure 10: Pay-TV-related complaints received by Ofcom, Q4 2011-Q3 2012
                                                • Increase in superfast connections
                                                  • Figure 11: Take-up of superfast broadband services, Q4 2010-Q1 2012
                                                • Mobile importance will likely lead to an increase in quad-play packages
                                                • Who’s Innovating?

                                                  • Key points
                                                    • YouView attempts to combine Freeview with catch-up services
                                                      • BT’s new fibre-optic initiative drastically boosts speeds
                                                        • BT also focuses on sport to enhance multichannel TV offering
                                                          • Virgin Media shares landline minutes with mobiles
                                                          • Market Size and Forecast

                                                            • Key points
                                                              • The market
                                                                • Figure 12: Value of bundled communications sales, 2007-17
                                                                • Figure 13: Volume of bundled communications sales, 2007-17
                                                              • Forecasts
                                                                  • Figure 14: Forecast value of triple play bundled communication sales, 2007-17
                                                                  • Figure 15: Forecast volume of triple play bundled communication sales, 2007-17
                                                              • Market Segmentation and Share

                                                                • Key points
                                                                  • Voice and broadband bundles remain the most popular
                                                                    • Figure 16: Take-up of bundled communications services, 2005-12
                                                                  • Sky retains majority control of pay-TV market
                                                                    • Figure 17: Share of pay-TV subscriptions amongst BT, Virgin and Sky, 2011
                                                                    • Figure 18: Volume of multichannel TV households, by provider, 2011 and 2012
                                                                  • Fixed line broadband suppliers find it hard to stand out
                                                                    • Figure 19: Broadband internet providers (including traditional fixed line broadband, cable and fibre-optic-based services), by market share, December 2011
                                                                  • Sky chases Virgin for triple-play customers
                                                                    • Figure 20: Proportion of triple-play customers taken by Sky, Virgin and BT, 2008-12
                                                                • Companies and Products

                                                                    • BT Group plc
                                                                        • Figure 21: Financial performance of BT Group plc, 2011-12
                                                                        • Figure 22: Financial performance of BT Group plc, Q1 2012-Q2 2013
                                                                      • British Sky Broadcasting Group plc
                                                                          • Figure 23: Financial performance of British Sky Broadcasting Group plc, 2011 and 2012
                                                                          • Figure 24: Financial performance of British Sky Broadcasting Group plc, Q1 2012-Q1 2013
                                                                        • TalkTalk Telecom Group plc
                                                                            • Figure 25: Financial performance of TalkTalk Telecom Group plc, 2011 and 2012
                                                                            • Figure 26: Financial performance of TalkTalk Telecom Group plc, Q1 2012 and Q1 2013
                                                                          • Virgin Media Inc
                                                                              • Figure 27: Financial performance of Virgin Media Inc, 2010 and 2011
                                                                              • Figure 28: Financial performance of Virgin Media Inc, Q3 2011-Q3 2012
                                                                            • Plusnet plc
                                                                                • Figure 29: Financial performance of Plusnet plc, 2011 and 2012
                                                                            • Brand Research

                                                                              • Brand map
                                                                                  • Figure 30: Attitudes towards and usage of brands in the bundled communications services sector, November 2012
                                                                                • Correspondence analysis
                                                                                  • Brand attitudes
                                                                                    • Figure 31: Attitudes by bundled communications services brand, November 2012
                                                                                  • Brand personality
                                                                                    • Figure 32: Bundled communications services brand personality – macro image, November 2012
                                                                                    • Figure 33: Bundled communications services brand personality – micro image, November 2012
                                                                                  • Brand experience
                                                                                    • Figure 34: Bundled communications services brand usage, November 2012
                                                                                    • Figure 35: Satisfaction with various bundled communications services brands, November 2012
                                                                                    • Figure 36: Consideration of bundled communications services brands, November 2012
                                                                                    • Figure 37: Consumer perceptions of current bundled communications services brand performance, November 2012
                                                                                    • Figure 38: Bundled communications services brand recommendation – Net Promoter Score, November 2012
                                                                                  • Brand index
                                                                                    • Figure 39: Bundled communications services brand index, November 2012
                                                                                    • Figure 40: Bundled communications services brand index vs. recommendation, November 2012
                                                                                  • Target group analysis
                                                                                    • Figure 41: Target groups, November 2012
                                                                                    • Figure 42: Bundled communications services brand usage, by target groups, November 2012
                                                                                  • Group One – Conformists
                                                                                    • Group Two – Simply the Best
                                                                                      • Group Three – Shelf Stalkers
                                                                                        • Group Four – Habitual Shoppers
                                                                                          • Group Five – Individualists
                                                                                          • What Bundled Products Do Consumers Have?

                                                                                            • Key points
                                                                                              • Internet underpins all bundle popularity
                                                                                                • Figure 43: Bundles or individual communication services owned by consumers, from the single provider they pay most money to, November 2012
                                                                                                • Figure 44: Ten most popular bundles or individual communication services owned by consumers, from the single provider they pay most money to, November 2012
                                                                                              • Younger consumers more likely to just choose broadband
                                                                                                • Parents with younger children more likely to purchase triple-play bundle
                                                                                                  • Figure 45: Purchase of triple-play broadband, phone and TV bundles, from the provider consumers pay the most money to, by age of children in the household, November 2012
                                                                                                • A fifth pay under £20 a month for their services
                                                                                                  • Figure 46: Amount paid for bundled or individual communications services, November 2012
                                                                                              • Service Providers Used

                                                                                                • Key points
                                                                                                  • Sky and Virgin have majority market share
                                                                                                    • Figure 47: Bundled package and service providers, November 2012
                                                                                                    • Figure 48: Purchase of bundles or individual products from Sky and Virgin, by age, November 2012
                                                                                                  • TalkTalk offering appeals regardless of income
                                                                                                    • Figure 49: Consumers who have purchased a bundle or service from TalkTalk, by gross annual household income, November 2012
                                                                                                  • BT customers not sure of package details
                                                                                                    • Service provision focii
                                                                                                      • Figure 50: Purchases from BT of the top ten most popular bundles or services by consumers, November 2012
                                                                                                      • Figure 51: Purchases from Sky of the top ten most popular bundles or services by consumers, November 2012
                                                                                                      • Figure 52: Purchases from TalkTalk of the top ten most popular bundles or services by consumers, November 2012
                                                                                                      • Figure 53: Purchases from Virgin of the top ten most popular bundles or services by consumers, November 2012
                                                                                                      • Figure 54: Purchases from other providers of the top ten most popular bundles or services by consumers, November 2012
                                                                                                  • Other Services Consumers Pay For

                                                                                                    • Key points
                                                                                                      • Mobile most likely to be purchased alone
                                                                                                        • Figure 55: Other services owned by consumers, November 2012
                                                                                                      • Over-65s more likely to stick with one provider
                                                                                                        • 25-34s significantly more likely to purchase cable internet elsewhere
                                                                                                          • Figure 56: Purchase of superfast cable internet from a company other than the company consumers pay the most money to for bundled services, by age, November 2012
                                                                                                        • BT’s IPTV offering has the potential for big returns
                                                                                                          • Figure 57: Companies that provide the main bundle to consumers who purchase a TV service from a second company, November 2012
                                                                                                      • What Makes Consumers Choose Their Packages?

                                                                                                        • Key points
                                                                                                          • Value the most important element in package choice
                                                                                                            • Figure 58: Reasons that consumers choose their packages, November 2012
                                                                                                          • Suburban and rural customers less likely to be value hunters
                                                                                                            • Aggressive marketing to employees may boost bundle take-up
                                                                                                              • Figure 59: Consumers who purchased their most recent bundle because ‘It was easier to use one company than to shop around’, by employment status, November 2012
                                                                                                          • Attitudes to Bundled Communications

                                                                                                            • Key points
                                                                                                              • Generic offerings stymie significant growth
                                                                                                                • Figure 60: Attitudes towards bundled communications, November 2012
                                                                                                              • Customisability is king
                                                                                                                • Younger consumers up to four times more likely to abandon fixed line phones
                                                                                                                  • Figure 61: Agreement with the statement ‘I would not have a fixed line phone if it was not included in my bundle’, by age, November 2012
                                                                                                              • Appendix – Brand Research

                                                                                                                  • Figure 14: Brand usage, November 2012
                                                                                                                  • Figure 15: Brand commitment, November 2012
                                                                                                                  • Figure 16: Brand momentum, November 2012
                                                                                                                  • Figure 17: Brand diversity, November 2012
                                                                                                                  • Figure 18: Brand satisfaction, November 2012
                                                                                                                  • Figure 19: Brand recommendation, November 2012
                                                                                                                  • Figure 20: Brand attitude, November 2012
                                                                                                                  • Figure 21: Brand image – macro image, November 2012
                                                                                                                  • Figure 22: Brand image – micro image, November 2012
                                                                                                                  • Figure 23: Profile of target groups, by demographics, November 2012
                                                                                                                  • Figure 24: Psychographic segmentation, by target groups, November 2012
                                                                                                                  • Figure 25: Brand usage, by target groups, November 2012
                                                                                                                • Brand index
                                                                                                                  • Figure 26: Brand index, November 2012
                                                                                                              • Appendix – What Bundled Products do Consumers Have?

                                                                                                                  • Figure 62: Bundles or services owned by consumers, from the single provider they pay most money to, November 2012
                                                                                                                  • Figure 63: Top ten most popular bundles or services owned by consumers, from the single provider they pay most money to, November 2012
                                                                                                                  • Figure 64: Broadband services owned by consumers, by demographics, November 2012
                                                                                                                  • Figure 65: Superfast internet services owned by consumers, by demographics, November 2012
                                                                                                                  • Figure 66: No Bundle services owned by consumers, by demographics, November 2012
                                                                                                                  • Figure 67: Most popular bundles of services owned by consumers, from the single provider they pay most money to, by demographics, November 2012
                                                                                                                  • Figure 68: Next most popular Bundles of services owned by consumers, from the single provider they pay most money to, by demographics, November 2012
                                                                                                              • Appendix - How Much Do Consumers Pay For Bundled Goods?

                                                                                                                  • Figure 69: Amount paid for bundled communication services, November 2012
                                                                                                                  • Figure 70: Amount paid for bundled communication services, by most popular bundles of services owned by consumers, from the single provider they pay most money to, November 2012
                                                                                                                  • Figure 71: Amount paid for bundled communication services, by next most popular bundles of services owned by consumers, from the single provider they pay most money to, November 2012
                                                                                                                  • Figure 72: Amount paid for bundled communication services, by demographics, November 2012
                                                                                                              • Appendix – Service Providers Used

                                                                                                                  • Figure 73: Bundled service providers, November 2012
                                                                                                                  • Figure 74: Amount paid for bundled communication services, by bundled service providers, November 2012
                                                                                                                  • Figure 75: Bundled package service providers, by amount paid for bundled communication services, November 2012
                                                                                                                  • Figure 76: Bundles of services owned by consumers from the single provider they pay most money to, by bundled service providers, November 2012
                                                                                                                  • Figure 77: Bundled service providers, by demographics, November 2012
                                                                                                              • Appendix – Other Services Consumers Pay For

                                                                                                                  • Figure 78: Other services owned by consumers, November 2012
                                                                                                                  • Figure 79: Amount paid for bundled communication services, by other services owned by consumers, November 2012
                                                                                                                  • Figure 80: Bundled service providers, by other services owned by consumers, November 2012
                                                                                                                  • Figure 81: Bundles of services owned by consumers, from the single provider they pay most money to, by other services owned by consumers, November 2012
                                                                                                                  • Figure 82: Other services owned by consumers, by demographics, November 2012
                                                                                                              • Appendix – What Makes Consumers Choose Their Packages?

                                                                                                                  • Figure 83: Reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 84: Reasons for buying bundled communication services, by most popular reasons for buying packages, November 2012
                                                                                                                  • Figure 85: Reasons for buying bundled communication services, by next most popular reasons for buying packages, November 2012
                                                                                                                  • Figure 86: Other services owned by consumers, by most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 87: Other services owned by consumers, by next most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 88: Amount paid for bundled communication services, by most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 89: Amount paid for bundled communication services, by next most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 90: Bundled service providers, by most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 91: Bundled service providers, by next most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 92: Bundles of services owned by consumers, from the single provider they pay most money to, by most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 93: Bundles of services owned by consumers, from the single provider they pay most money to, by next most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 94: Most popular reasons for buying bundled communication services, by demographics, November 2012
                                                                                                                  • Figure 95: Next most popular reasons for buying bundled communication services, by demographics, November 2012
                                                                                                              • Appendix – Attitudes to Bundled Communications

                                                                                                                  • Figure 96: Attitudes to bundled communications, November 2012
                                                                                                                  • Figure 97: Attitudes to bundled communications, by attitudes to bundled communications, November 2012
                                                                                                                  • Figure 98: Attitudes to bundled communications, by most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 99: Attitudes to bundled communications, by next most popular reasons for buying bundled communication services, November 2012
                                                                                                                  • Figure 100: Reasons for buying bundled communication services, by attitudes to bundled communications, November 2012
                                                                                                                  • Figure 101: Other services owned by consumers, by attitudes to bundled communications, November 2012
                                                                                                                  • Figure 102: Amount paid for bundled communication services, by attitudes to bundled communications, November 2012
                                                                                                                  • Figure 103: Bundled package service providers, by attitudes to bundled communications, November 2012
                                                                                                                  • Figure 104: Bundles of services owned by consumers, from the single provider they pay most money to, by attitudes to bundled communications, November 2012
                                                                                                                  • Figure 105: Attitudes to bundled communications, by demographics, November 2012

                                                                                                              Companies Covered

                                                                                                              • British Sky Broadcasting Group plc (BSkyB)
                                                                                                              • BT Group plc
                                                                                                              • Freeview
                                                                                                              • NTL Europe, Inc.
                                                                                                              • PlusNet Technologies Limited
                                                                                                              • TalkTalk Telecom Ltd.
                                                                                                              • The Carphone Warehouse Ltd
                                                                                                              • TiVo Inc
                                                                                                              • Virgin Media Ltd
                                                                                                              • YouView TV Ltd

                                                                                                              Bundled Communications Services - UK - January 2013

                                                                                                              £1,995.00 (Excl.Tax)