UK Cool on Bundling – Warmer Opportunities Ahead

With the soaring cost of energy bills and recent interest rate hikes, there has never been a better time for UK consumers to look at ways to save money by consolidating the services they use. The big focus area at the moment is communications and home entertainment with a raft of companies now offering ‘bundle’ packages. But do consumers see any benefit in opting for bundles?

According to a recent investigation by network solutions reseller Telindus, although 95 per cent of consumers would consider bundled communications packages – TV, home phone, broadband and mobile phone – they hold back because they perceive these packages as either offering poor customer service (50 per cent), poor value for money (45 per cent) or sub-standard products (47 per cent). With over 90 per cent of people saying that customer service is their main criteria when choosing a service provider, followed by price at 88 per cent, it seems as if the vendors have some work to do to change consumer attitudes.

“UK consumers demand the best, and with so many companies vying for their money the service providers have to get the basics right – product, price, customer service – to ensure they prosper,” commented Mark Hutchinson, UK Managing Director at Telindus. “Over three quarters of the people we questioned said that lavish advertising campaigns didn’t sway their purchasing decisions, so service providers have to ensure they are offering truly innovative products at competitive prices with exemplary customer service. The message for the industry is simple – don’t be complacent. Although you have customers now, with so many vendors out there you need to make sure that customer service is your top priority as customers will leave if they think they can get a better deal/service elsewhere.”

Unsurprisingly, 73 per cent of respondents said they are worried about the cost of household bills, revealing a massive potential for this market if only vendors can allay consumer concerns. Despite these concerns, when asked what communications packages they would potentially be interested in, 34 per cent of people said they’d specifically look for ‘Triple Play’ – home phone, TV and broadband – packages, but its seems that ‘Quad Play’ – as Triple Play, but with mobile phone included – is still in its infancy with only nine per cent considering it as an option.

However, the panacea for bundled packages may come over the next four years as the digital TV switch over begins. During 2008 – 2012, analogue TV signals will be turned off, forcing viewers to switch to digital TV. At present, three quarters of people rarely or never review their TV service provider, but this will inevitably change in the next few years as the analogue signal disappears.

“With most technologies or trends there is a tipping point, and the digital TV switch over could be it for bundled communications. Consumers will be forced to look at the likes of Virgin Media and SKY, and may think ‘what the heck’ and consolidate other services into one provider,” added Hutchinson.

The Telindus investigation, carried out during late February 2007, sought to explore UK public attitudes toward bundled communications packages and whether consumers felt that bundling was the way forward in purchasing multiple products from a similar market sector.

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