April 15, 2005 12:38 PM PDT

U.S. consumers eye bundled services

Consumers may not yet be clamoring for bundles of phone, cable TV and Internet services from a single provider, but they are starting to consider the idea.

As cable operators, telecom carriers and satellite companies gear up for competition in the market for bundled services, a "significant minority" of U.S. consumers are ready to switch to a so-called triple-play package offered by a single provider, according to a survey report released Wednesday by Ipsos-Insight.

Working with an assumed price of $119 a month for a bundle of Internet, television, and telephone services, the study found that an estimated 7 percent of households would sign up for such a bundle offered by a phone company, while another 7 percent would sign up for a package from a cable provider. Satellite companies could expect about 3 percent of the market, the study said. About 600 consumers were polled for the survey.

If wireless phone service is added to the mix, the edge goes to the phone companies. They could lure 16 percent of households if 1,000 wireless minutes were included in a bundle priced at about $149 a month. In this scenario, the share of cable TV companies would be reduced to 5 percent and that of satellite providers to 2 percent.

However, the tilt in favor of phone companies may be temporary as cable operators are getting more aggressive, as in a recent agreement between Time Warner Cable and Sprint, the report's authors said.

Consumer interest is mainly driven by the desire for a lower and consolidated monthly bill, Ipsos-Insight said.

The stakes are high for service providers. The cable TV industry collectively has invested about $85 billion to upgrade its networks and also to adopt services such as video on demand, while telecom giants such as SBC Communications, Verizon Communications and BellSouth are pouring $10 billion into fiber-optic cable to be able to carry TV signals over phone lines.

"In the basic triple-play scenario tested, with cable TV, Internet and phone packages at parity from various providers, it seems consumers are equally likely to give their business to a phone company as a cable TV company," Lynne Bartos, senior vice president at Ipsos-Insight, said in a statement. "Value-added features, like video on demand, high-definition television capabilities and digital-video recorders, will play an important role at the point of purchase and likely tip the scales."

 

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