Here’s What Bundled Packaging Means for Telecomm Providers
Strategic Analytics reported Tuesday that it estimates 13% of American households will subscribe to “quad-play” telecomm packages by 2016. The quad-play package is a one-provider service that includes “a bundled offering of fixed voice, broadband, television and mobile voice.” The gain would represent an increase of 4x the current amount of Americans currently subscribing to the bundled package. The companies that stand to gain most from the shift would be telecomm giants AT&T (NYSE:T) and Verizon (NYSE:VZ), due to their breadth and network range that allows them to cover all of the service offerings themselves. Meanwhile, smaller and more individualized telecomm services such as Comcast (NASDAQ:CMCSA), Time Warner (NYSE:TWC), and Cablevision (NYSE:CVC) may suffer as they will have to make larger investments in infrastructure or network to form partnerships to accommodate comparable “quad-play’ offerings.
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However, according to Strategic Analytics report, other bundled packages may continue to hold sway on the market. “Today, 57 percent of American households are classified as “multiplay,” meaning that they take more than one entertainment or communication service from the same provider. This makes the US one of the most highly bundled countries in the world. According to this report, while the Quad Play will make strides in the US market over the next five years, the voice-video-data “Triple Play” will be the dominant bundle type.”
“Quad Play bundling has had a slow start in the US, but we see increased momentum over the next five years,” said Ben Piper, Director of the Multiplay Market Dynamics service and author of the report. “Survey research we have just fielded shows that US Quad Play subscribers have a much higher ‘value for money’ perception, and are significantly less likely to churn.”
The current leader in bundled packaging is AT&T (NYSE:T), reporting 75% of its U-verse TV subscribers are also signed on to triple-play or quad-play packages. The company is also making the bundling worth its while, reporting YoY revenue growth of 8% from the triple-play.