Study Claims Customers Prefer Cable To Telecom For Triple-Play

Study claims customers prefer cable to telecom for triple-play

An annual survey conducted by Knowledge Networks/SRI claims that 29% of consumers believe that cable systems would provide the best service and value for the triple-play bundle of video, voice and broadband. Satellite was the second choice at 22%, followed by local phone companies (21%), ISPs (19%) and electric utility companies (8%).

In addition, the report indicated that while the average household would be willing to spend an additional $7 per month on services- to an average of $52 - broadband households would only increase spending an average of ten cents per month.

Implications:

The low percentage of respondents choosing telecom services from electric utility companies is not surprising since they are new entrants in the market and many consumers do not receive or are unaware that their utility provides such services. The findings also reveal that broadband subscribers may not be able to justify the purchase of additional services. This does not bode well for penetration of advanced digital services unless providers can either better communicate the value of the services or the relative price of broadband is reduced within a bundle.

Lastly, lacking insight as to how the survey was worded, the study appears arguably counterintuitive in designating cable as the preferred provider for the triple-play bundle. An opposing study, conducted by Yankee Group, concludes that telecom providers retain the advantage in providing bundled services due to customer acceptance and preference for the natural bundle of local and long distance service. Just as customers may not identify telephone companies with video, most arguably would not identify cable companies with telephone service. Both studies should be kept in mind as competition intensifies between telecom and cable companies.