Study: Telecom bundles coming undone

Service providers need to do a better job of tailoring their bundled offerings and keeping them affordable, according to a study of U.S. consumers commissioned by CSG Systems and released today.

The survey polled 1000 randomly selected U.S. consumers of telecom services--voice, data, video and wireless--and discovered that only 28% are currently using a single service provider to buy three or four services in a bundle. A larger number--41%--buy two services from a single provider.

That’s good news and bad news for service providers, said Will Rotch, CTO of the Americas for CSG, which produces billing and customer care software for service providers.

“We read that as, there is still a good opportunity for service providers to work at getting customers to buy more bundled services,” he said in an interview. “When we probed a bit more to ask what would entice you to buy all your services from one provider, pretty much the biggest response was, ‘It’s my wallet.’”

Two-thirds of the survey group said price was the major factor in convincing them to buy a bundle of voice, data, video and/or wireless service offerings. Another 21% said they would buy a service bundle if it was specifically tailored to their needs.

The survey dispels one common myth that consumers will move to a single service provider for the convenience of a single bill, said Rotch. Only 12% of those surveyed said they’d buy a bundle to have all their services tracked by one company.

“At CSG, we’ve had convergent bills for several years, and it sounded nice--the convenience of a single bill and a single check,” he said. “But people still care more about prices. So either you have to give them a great deal or the perception of great deal. You have to understand your customers and how to personalize to them. You have to be able to say, ‘I know you and because I know you, I’m giving you a great deal.’”

The survey also explored consumer buying habits where content is concerned, defining content as pay-per-view or on-demand video, cellphone ringtones, or online music services such as iTunes.

Forty percent of respondents had never purchased content. The 60% who had purchased content most frequently bought video from a cable company or video, music, games or other content from an Internet service provider.

A very high percentage--86%--were pleased with their content purchasing experience, which bodes well for the future, said Rotch.

“Willingness to purchase content definitely went down as age went up--there was a direct correlation,” he said. Of those who hadn’t ever purchased content, 40% said they were unfamiliar with or intimidated by the process, and many of those respondents tended to be older.

And while respondents showed an interest in having content tailored to their needs, only one-quarter would pay a five percent premium for such content. The majority--65%--would not pay anything more for content customization.

Online bill payment was also more popular with younger people than with older people--84% of 45 to 54 year-old age group said they would prefer to correspond through the mail or with a live person as opposed to online, said Rotch.

“In general, people asked that service providers not get rid of their live customer service reps,” said Rotch. “There wasn’t as much concern about security online--we seem to be over that hump.”