The capacity of cable companies and telcos like AT&T and Verizon to combine fixed and mobile services has received a lot of attention. These firms claim these deals as a crucial retention and churn reduction measure. But to what extent are consumers truly willing to combine their services under one operator?
According to Roger Enter, the founder of Recon Analytics, bundling is not a top priority for the majority of broadband users. The ability to combine fixed and mobile services is “probably the 9th or 10th most essential item,” according to a list of criteria customers use to choose a new broadband provider.
People do not base decisions on the bundle, according to him; rather, they base decisions on price and performance. As a result, customers can end up with a fixed-mobile bundle from a provider like Verizon, but that’s because they made their provider selection based on value and effectiveness rather than “because I want to have one bill from one company,” Entner added.
This reasoning is consistent with statements made by Chet Kanojia, CEO of Starry, during the fixed wireless company’s most recent Q2 earnings call. At the time, Kanojia claimed that customers valued cheaper standalone plans more than they valued more expensive bundles from companies like cable rivals.
Entner concluded, “The reason why individuals bundle is quite often because they get a discount.
According to research from Parks Associates Research Director Kristen Hanich, 20% of home internet users currently have a fixed-mobile bundle. That number might increase if more players develop the capacity to provide such a product.
“Historically, just two big players—AT&T and Verizon—offered this feature. Comcast, Charter Spectrum, Altice USA, and now WideOpenWest have introduced or partnered with MVNO providers to package home internet and mobile in more recent times, according to the expert. T-Mobile USA and US Cellular have begun offering home internet to its mobile clients, according to the mobile network operators.
Hanich said the research supports operator claims that bundling capabilities assist reduce churn, even if customers might not actively choose their package based on those features.
She said, “Consumers have reacted well to these measures. According to study by Parks Associates, bundling mobile and home internet boosts customer happiness significantly as indicated by net promoter scores, which increases retention.
