Phone, Cable Companies Advised To Bundle More Services

To increase revenues substantially, cable and telephone companies will need to add more services to product bundles that currently include commodities such as broadband, TV and telephone service, a market research firm said Thursday.

Adding services to "triple-play" bundles could boost monthly revenue per subscriber to $206 by 2010 from $148 today, Parks Associates said. Additional services could include TV-based caller ID and home monitoring, satellite radio, and online storage.

Almost a third of broadband consumers intend to add TV-related value-added services to their current product bundles, and 41 percent are interested in adding supplementary services to their Internet subscriptions, Parks Associates said. As a result, cable and telephone companies should focus on differentiating themselves through services, rather than competing just on price and slick marketing campaigns.

Today, cable operators in general have the advantage over telephone companies because the former have already built connections to the home to deliver all their services. Telephone companies, such as Verizon and AT&T, are moving as quickly as possible to build their own cable networks.

"It's going to take a couple of years before we actually see them competing head to head with cable operators," Parks research analyst Deepa Iyer said. But to convince cable subscribers to switch, telephone companies will have to offer product bundles that are better than cable's in every way.One key advantage telephone companies have over cable operators is mobile-phone services, Iyer said. Telephone companies can bundle wireless in their packages and build more services onto their wireless networks.

"They haven't done a very good job of offering wireless as part of a bundle," Iyer said. "They still have a lot of work to do in integrating wireless services with other services. Once they do that, they will definitely have an edge over cable."