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Bundled Communications Services - UK - January 2015
Introduction
 
The market for communications services has shifted to a more level playing field, with each of the big four fixed-line telco firms – TalkTalk, Sky, Virgin and BT – now offering each of the three main services: TV, fixed-line telephony and fixed-line internet. Heritage specialities – like Sky’s focus on TV or TalkTalk’s persistently low-cost broadband – mean that their brands remain distinct, but as each tries to push consumers into the triple-play bundle, these differences risk becoming overshadowed by a standardised offering.

This report looks at the current sale of and interest in bundled communication services, including the types of bundles consumers currently take, who they have them with, how much they pay for them per month, the motivations behind their most recent choice of provider, and which optional free extras might convince them to choose one bundle over another.

Definitions
This report looks at the sale and provision of telecommunication products to consumers.

Telecommunication products (sometimes abbreviated to “telco products”, in line with industry use) include fixed-line telephony, mobile telephony, internet and television. Individually these are known as “services”.

When these services are augmented with optional or necessary add-ons, they are referred to as a package. For example, “a landline and internet package”, or “a sports channel add-on was available, increasing the cost of the total TV package”.

When three or more services are sold to a consumer by the same provider at the same time, they are referred to as a bundle. Specifically, three services sold at the same time are a triple-play bundle, and four services sold at the same time are a quad-play bundle.

Companies that provide services, packages or bundles of products to consumers are interchangeably called “operators”, “telcos” or “providers” throughout the report.

The market size for this report refers to the value of operator revenue for the three fixed-line products typically bundled into triple play deals: fixed-line phone services, pay-TV and internet. These numbers are sourced from Ofcom.

The “big four”, when referenced to as such, refer to BT, Sky, TalkTalk and Virgin Media.

Services like Netflix are referred to as over-the-top media: video or audio content delivered over the internet by a third party, carried down to the consumer’s home by a provider, but free of control from it.

Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland

Abbreviations
ADSL | Asymmetric Digital Subscriber Line
ARPU | Average Revenue Per User
BDUK | Broadband Delivery UK
EBITDA | Earnings Before Interest, Taxation, Depreciation and Amortisation
EE | Everything Everywhere
IP | Internet Protocol
NMR | Nielsen Media Research
ONS | Office of National Statistics
SIM | Subscriber Information Module
SME | Small to Medium Enterprise
SMS | Short Message Service
USC | Universal Service Commitment
VOIP | Voice Over IP
WBA | Wireless Broadcasting Association

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