News

Surveys Show Bundle's Appeal Is Rising

10/07/2001 8:00 PM Eastern

&Staff In its latest survey tracking consumer attitudes about bundled services, the Cable Telecommunications Association for Marketing found that cable is "closing the gap" with the local telephone provider as the top consumer choice for a single carrier.

The local phone company continued to be the No. 1 choice for bundling Internet access with local and long-distance phone services. But that preference has eroded steadily, the CTAM survey noted, sliding from a 41-percent preference in 1998, to 33 percent a year ago to 27 percent in the latest survey, conducted among 1,000 consumers last August.

Respondents ranked their cable provider second, increasing its edge over No. 3, the long-distance phone company.

According to CTAM, cable was chosen by 16 percent of respondents this year, virtually even with the 17 percent who tapped their local operator a year ago — but up considerably from the 13-percent level of 1998.

On the other hand, the long-distance phone company went from 16 percent in 1998 to 15 percent last year and just 10 percent last August.

Consumers ranked three other providers much lower on the preference totem pole: their electric utility company, Internet-service provider and cellular phone company — each finished in single digits at 8 percent, 6 percent and 4 percent last month.

Of the 1,012 respondents, 65 percent were cable subscribers, 17 percent were satellite customers and the rest took neither service.

Generally speaking, CTAM found that consumers continued to prefer the idea of having a single telecommunications-services carrier (56 percent, the same as last year) and getting a single bill for their bundled services (62 percent, especially those aged 35 to 54). The notable exceptions were adults aged 55 plus (49 percent) and African Americans (36 percent), who prefer multiple bills.

The top two reasons for selecting one provider over another are customer service (32 percent) and established relationships (16 percent), CTAM noted.

Horowitz Associates Inc. also released a new bundling study late, based on a survey of 800 households conducted in August.

The biggest advantages of bundled services, the Larchmont, N.Y.-based researcher found, were having one number to call for customer service (65 percent), having one integrated monthly bill (62 percent), having a store or retail presence (58 percent) and having to deal with just a single company (57 percent).

More than two-thirds of the respondents said they are willing to bundle their services if offered a 10-percent discount off their present total monthly bill. However, "Even with no discount, more than half of the consumers surveyed are willing" to do so, Horowitz said.

As for possible disadvantages to the notion of bundling, "fear of higher prices and monopoly are most mentioned," Horowitz said.

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