Bargain Bundles

Cable, Web, phone firms are offering packages with all-in-one billing

November 25, 2007|By Tricia Bishop | Tricia Bishop,Sun reporter

Sales and simplicity - they're two things savvy shoppers love.

And cable, telephone and Internet companies know it, which is why they're offering multiple services at a bargain rate all rolled into one bill.

They call it bundling. And it has become part of a marketing blitz that comes with teaser discount rates in hopes of persuading you to dump your other providers and consolidate your communications. (See Verizon's "Bundle Up and Save!," Comcast's "Limited Time Offer Bundled Packages," and Millennium Digital Media's "Best Triple Play in Town.")

On the consumer side, bundling can save you some cash with discounts of 14 percent to 28 percent in the Baltimore region, depending on the provider. But there are caveats to consider. And the savings - as much as $456 in a year through Comcast, for example - are limited.

The deals usually last for a set period, then the price rises to what it would have been without the discount. And there might be fees associated with dropping one provider for another if you've signed a contract guaranteeing a certain amount of service time - a year of Verizon DSL, for example.

Customers also have to look at the track records of their service providers. If your cable is out frequently, do you want to trust that company for your phone and Internet service? If it's consistent and smooth, maybe you do. The same goes for your phone provider.

And keep in mind, if you choose to go with a company offering telephone service over the Internet, it won't work when the power is out. For the owners of cellular telephones, though, that's often not much of a concern.

On company side

On the company side, bundling is supposed to boost business by getting existing customers to add services. It's also designed to snag new customers from competitors, as the demarcation lines between telephone and cable companies increasingly blur.

Comcast used to be just a cable TV business. Then it rolled out broadband Internet access. And most recently, it added telephone service through Voice over Internet Protocol, or VoIP.

Verizon used to be just for phone service. But it has since partnered with a satellite TV company to offer premium channels.

Verizon already offers DSL Internet access. And it is in the process of rolling out a super-fast optic-fiber version of broadband called FiOS along with FiOS TV (currently available in about 550,000 Maryland households).

Verizon and Comcast are the main bundling choices for Marylanders, though a few - roughly 100,000 homes in northern Anne Arundel County - can also choose from a package offered by Millennium Digital Media. (Millennium is in the process of converting its name to Broadstripe.)

A July survey

A July survey of 1,200 households by the Claes Fornell International Group, a Michigan company that measures customer attitudes, showed 30 percent of consumers who don't currently bundle have no plans to do it anytime soon, content with the status quo.

But 20 percent of non-bundlers plan to begin doing so within the year, drawn by cheaper rates and convenience. (The rest said they weren't sure where they stood.)

"That's the beauty of the bundle, or at least the attraction of the bundle, for consumers," said Mike Paxton, a media analyst for Arizona-based In-Stat.

"You're getting a little bit of a discount - in most cases maybe 10 percent, sometimes 5 percent - in terms of pricing, but the convenience is quite nice," Paxton said.

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