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Multiplay - not always best value for money

by Josie Sephton | Aug 30, 2011

The European Commission released findings from an interesting study recently, into bundled services. The study showed that four out of ten European households were buying services in bundles, e.g. internet plus phone plus TV, from a single provider, rather than individually. The study goes on to say that not all subscribers to bundled services believe them to be cheaper than paying for services individually - just over 40% thought them to be the cheaper option. Moreover, some subscribers raised concerns about receiving services in the bundle that were not required, as well as the lack of transparency and clarity around costs and conditions associated with the service.

These findings - particularly those relating to the pricing of multiplay services - are not at all surprising to us. Teligen has carried out extensive analysis of multiplay services internationally, and what we have seen is that pricing structures and options can be very confusing, particularly for consumers who are not used to negotiating this kind of information. Moreover, while users often expect to pay less by purchasing service bundles supplemented by individual services, this is certainly not always the case. In reality, the cost savings associated with multiplay are highly dependent on the type of user and how much they are using various services. Users with fairly modest requirement are less likely to achieve any cost savings over buying services singly and indeed, in some situations, in some countries could well find themselves paying more - sometimes considerably more. Some of our analysis has shown a premium of almost 50% for multiplay as compared to singly purchased services. In such scenarios, it is highly debatable whether the benefits of a single supplier/single bill are sufficient to offset such a significant increase in cost.

In general, multiplay offers comprising two services tend to provide the best value for users. It goes without saying that savings can generally be expected when actual usage matches that offered by the multiplay plan - which doesn't necessarily apply to every household.

While higher usage of comms services may be more suited to multiplay, it is not always a given. In particular, consumers who have a heavy mobile usage, and comparatively modest fixed usage rarely benefit from multiplay offers. This is because these offers are typically geared towards fixed services, and as such are less relevant to the more mobile-intensive users, who may only have relatively basic fixed needs.

Providers are refining and redefining their multiplay offers more frequently now, offering a wider range of options with broader appeal and relevance to their target audience, but there is arguably still a long way to go before multiplay becomes the best value option for many - particularly with the continuing rise in mobile usage.

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