Study: Pricing Drives the Bundle


Despite the efforts cable, satellite and telephone companies put into marketing their products, consumers care more about pricing than brands when selecting a provider for triple-play packages of video, voice and data, according to a survey released last Thursday.

The survey, conducted by Jenkintown, Pa.-based TNS Telecoms, found that 67% of households didn’t indicate a preference for the service provider that would supply them with a bundled offering of local and long-distance phone service, video programming and Internet service.

“Providers will need to compete for consumers based on service offerings and pricing, and focus less on the brand,” TNS Telecoms vice president Charles White said in a statement accompanying the research findings. “Providers can look at these results as a double-edged sword, depending upon their position in the market. Existing customers are very willing to consider their provider for new services, but likewise, they will consider their other providers as well.”

TNS based the research on a database of 32,000 households that supply the company with a complete set of bills from telecommunications providers, including promotional bill inserts and direct-mail marketing pitches.


Among regional phone companies, BellSouth remains a strong brand, with 19% of households indicating a preference for their local provider compared to the nationwide average of 16%. Qwest Communications International Inc. performed on the low end of the survey, with only 11% of households in the regional Bell operating company’s footprint saying that they prefer their local provider, TNS said.

In the pay-video business, DirecTV Inc. and EchoStar Communications Corp.’s Dish Network continue to eat into the market share of the major cable MSOs. According to the study, DirecTV controlled 16% of the multichannel video business after the second quarter (up 2% from the previous quarter), and an 18% share of total revenue (up 3%).


Comcast Corp. — the largest U.S. cable operator, with a 23% share of U.S. households and total revenue — saw its market share drop 2%, while its revenue chunk fell 1%. Dish Network controlled 13% of pay TV households and total revenue, posting 1% gains in each category.

Both Time Warner Cable and Charter Communications Inc. saw their share of households and revenue decline 1% during the second quarter. Time Warner Cable had 11% of pay TV homes and 12% of revenue, while Charter controlled 6% of households and revenue.

Adelphia Communications Corp. controlled 4% of multichannel households and revenue, flat with the first quarter, according to TNS.

TNS also calculated the “share of the communications wallet” for each top cable, satellite, regional and wireless phone company, basing its numbers on the total consumer dollars spent with each provider.

Verizon Wireless and Cingular Wireless have the biggest shares, with each company collecting 9% of the total communications wallet, TNS said.

Comcast and Verizon’s landline phone service each have an 8% share, with Comcast dropping 1% from the first quarter and Verizon gaining 1%.

SBC, which controlled 8% of the communications wallet at the end of the quarter, lost 1% from the first quarter, and DirecTV, with a 5% share of the wallet, gained 1%.

Time Warner remained flat compared to the first quarter, with a 4% share of the wallet, and Dish Network, also with a 4% share, gained 1%.

Cox Communications Inc., with a 3% share of the wallet, was flat compared to the first quarter, and Charter, with a 2% share of the wallet, was also flat compared to the previous quarter.