Bundled services will dominate the telco landscape by 2014, according to analyst firm Frost & Sullivan.
Figures from the Asia-Pacific Converged Services Market Potential analysis showed 28.8 per cent of households across 14 countries subscribed to one to four bundled services such as fixed-line, broadband and television. This accounted for $US58.7 billion in billings. The analyst firm estimates by 2014, this amount will surge to $US88.3 billion.
While dual packages, namely fixed-line and broadband, led the market with 10.8 per cent residential users, this number was expected to drop to 10.2 per cent. Triple bundle services are tipped to grow two-fold to 4.9 per cent.
Frost and Sullivan senior research manager, Phil Harper, saw an increase in triple combination opportunities in Australia once the National Broadband Network (NBN) came into play. The network will opening up competition in pay TV services.
Network convergence through Internet Protocol (IP) is one of the main drivers of multiple service adoption, delivering a range of offerings such as VoIP, Internet and television. This meant operators could up sell and increase average revenue per user as well as boost customer loyalty.
While this growth in bundled services can result in attractive price points for customers, the analyst firm warned that quality of service, timeliness of market entry and the type of content can make or break an operator’s converged offerings.
Harper said the Australian dual bundled services market was highly saturated and smaller players might find it hard to penetrate. In order to survive, new competitors should consider the importance of quality digital content as an incentive. This was especially applicable to the mobile phones sector, which saw a downsizing from four operators to three after Vodafone merged with Hutchinson.
Last month, Layer 10 telco analyst, Paul Brooks, said bundled services were responsible in leading smaller ISPs, which could not offer quality support for fixed-line services, to join the telephony game.
According to Brooks, this was a major contributor to increased consumer complaints.