Bundled Communications Services - UK - January 2015
“Including a free tablet with a data connection would induce the customer into a quad-play contract, with a mobile SIM attached to their name. It would increase the number of connected devices in the consumer’s home, leading to a greater liklihood of the user upgrading to a superfast connection down the line. Finally, it may well habituate the user to using video on demand services, which the telco can then use as an ancillary source of revenue.”
– Samuel Gee, Senior Technology and Media Analyst
This report discusses the following key topics:
- Increase in use of data-driven service represents an opportunity for fixed-line operators
- Free data might boost older use of superfast
The market for communications services has shifted to a more level playing field, with each of the big four fixed-line telco firms – TalkTalk, Sky, Virgin and BT – now offering each of the three main services: TV, fixed-line telephony and fixed-line internet. Heritage specialities – like Sky’s focus on TV or TalkTalk’s persistently low-cost broadband – mean that their brands remain distinct, but as each tries to push consumers into the triple-play bundle, these differences risk becoming overshadowed by a standardised offering.
This report looks at the current sale of and interest in bundled communication services, including the types of bundlesconsumers currently take, who they have them with, how much they pay for them per month, the motivations behind their most recent choice of provider, and which optional free extras might convince them to choose one bundle over another.
Bundled comms providers will continue to trade off their speciality product to demonstrate uniqueness in a market where all the major players are pushing for triple-play sales. Whilst it has invested enormous sums in securing football broadcast rights over 2014, BT remains the provider with the least obviously unique identity. Without a clearly defined primary offering – such as Sky has with pay-TV, TalkTalk with low-cost packages and Virgin with cable internet – the company will suffer in any consumer comparison. The possible takeover of EE by BT in 2015 may result in Ofcom mandating that the consumer arm of BT be spun off from the wholesale and business operations. If this happens, it will be an excellent opportunity for the company to rebrand its consumer focused operations with a more concise image that relies less on the weight of its heritage.
Consumers are favouring data-driven communication services more each year. As this process progresses they will respond well to a quad-play package that adapts to their usage across three platforms: fixed-line data connections, mobile data connections and mobile Wi-Fi. Clever use of mobile Wi-Fi hotspots that offload data usage when out the house across their faster, cheaper public broadband networks is one potentially powerful point of differentiation. However, this is a long term view – at the moment the demand for quad-play from consumers seems distinctly lacking.
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