A recent BBUS Consumer Survey reveals a strong shift in how telecoms users like to buy their services. There has been a big increase in the proportion of services bought in bundles, particularly by DSL users.
Table 1: Historical bundle take-up – what service do you bundle with your fixed telephone line
The 11% drop in non-bundle subscriptions in the 12 months to Jan 08 is a significant change. In the past the take-up of bundles was led by cable subscribers. N
ow 80% of them bundle broadband with fixed line access and 68% bundle TV. But it is the ADSL customers who have driven growth in the last 6 months.
“This is mainly due to the rapid increase in LLU during 2007 which has enabled more operators to offer their own services in more areas,” says Pamela Varley, Research Analyst at Point Topic.
Bundles are having a significant impact on the fixed line market.
According to the survey analysis BT’s share of the fixed line market in households with internet access has dropped below 50% for the first time and the decline is accelerating.
The main gains in market share have been amongst the smaller operators while major players like Virgin and Carphone Warehouse have seen small gains at best.
Subscribers to service bundles usually choose ‘telephone plus broadband’ or ‘telephone plus television’.
The winners in the television stakes are, not surprisingly, Sky and Virgin who have both increased their market penetration in the last 6 months primarily at the expense of standard terrestrial delivery.
However, there are other options opening up to consumers as IPTV starts to make an impact.
Although the numbers are still relatively small they are growing and along with Freeview share the largest increases in TV penetration outside the Virgin/Sky axis.
“Consumers are taking advantage of the price incentives and convenience that consolidating their services offers. Operators are keen to see this trend continue as it's much easier to keeping customers who have bundles than ones with just a single service,” concludes Pamela Varley.