In bundle jungle, content not yet king: E&Y report

MUMBAI: For years the mantra of the telecommunications and technology industries has been "content is king".

Yet for consumers choosing from a wide range of bundled telecommunications packages (in which a single company provides two or more of broadband, fixed-line voice, television, and mobile phone services), price and convenience are still far more important than any content available.

This was one of the main findings of "Bundle Jungle Europe: Navigating the Multi-Play Market", a survey of more than 12,000 consumers across eight Western European countries, released today by Ernst & Young. While fewer than 5 per cent of respondents cited premium content as a reason for taking up a bundle, up to 57 per cent of respondents by country cited cost.


"Content is currently low down on the list of reasons for consumers to take up or switch between ‘multi-play‘ telecommunications packages," explains Vincent de La Bachelerie, head of Ernst & Young‘s Global Telecommunications Practice. "But content does create stickiness. If consumers have the content they want, it tends to act as the glue that keeps them with their current provider."

As competition among companies offering bundled services continues to intensify, prices are dropping across the continent. As broadband and fixed-line voice services become commoditized and cheaper, content may become increasingly important. "The companies that succeed will be those that can segment their markets finely - tailoring services and content to the exact needs of their customers," adds De La Bachelerie.


Other key findings include:

  • When it comes to bundled telecommunications services, mobile telephony does not currently fit in well for many consumers. This is because while broadband, fixed-line telephony, and television services are likely to be bought for the household, mobile telephony is a very personal service that must be tailored for each member of a household.
  • However, brand strength is an important reason consumers cite for choosing bundled telecommunications services, with between 4 per cent and 21 per cent of respondents by country citing providers‘ brands as a reason to take up a bundle. And mobile operators have strong brands. Leveraging the strength of an existing brand or creating a new one is therefore an increasingly important strategy for companies offering converged services.
  • Regulators have helped to create bundled services by allowing Local Loop Unbundling and Mobile Virtual Network Operators, which allow greater access to fixed-line and mobile telephone customers. Yet regulation across Europe largely predates converged services and must be brought up to date, especially in the fields of market competition and content rights.
  • There is a great deal of similarity across customer segments. For example, teenagers in cities across Europe have more in common with each other than they do with their older neighbors.
  • Consumers who have TV as part of a bundled package show more loyalty to the provider than those who don‘t. Similarly, satisfaction levels among customers with broadband as a core part of the package correlate with the speed of the service: the higher the bandwidth, the more likely they are to be satisfied customers.

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