Bundling Will Work if Priced Right

If connectivity service bundling is to work, companies will need to offer consumers a competitively priced package that is customized to their particular needs, according to a report by Forrester Research.

Recent developments in the telecommunications industry have indicated a move toward communication service bundling, the packaging of multiple services such as telephone, television, and Internet connections into one combined service.

The report, titled “Do Consumers Want Bundling?” found that US consumers are unlikely to opt for such a package unless it is built around their core service and the price is right. Sixty-four percent of consumers, regardless of income, cited price as the deciding factor in choosing a service provider.

Of those US consumers surveyed, 36 percent cited cable TV as their core service, followed by their local telephone provider (31 percent), their long-distance telephone provider (23 percent), and their cell phone service (7 percent). Five percent of respondents said satellite TV was their core service with just one percent citing the Internet.

The report is based on a survey of 120,000 US consumers, conducted in the autumn of 1997.