To bundle or not to bundle, that is the question

CICRA’s Telecoms Regulatory Manager considers the changing face of telecoms provision in the Channel Islands and asks the question to bundle or not to bundle?

Over recent years telecoms operators and consumers have seen a benefit in bundling products. For many of us it is inconceivable to consider buying a telephone landline without buying an associated, bundled, broadband service and, perhaps, including a mobile phone service in this package too.

Operators have changed their offers over time to the benefit of many consumers in terms of higher levels of ‘up to’ speeds and, it would appear, consumers value bundled services.

Ofcom, the telecoms regulator in the UK, in February issued its provisional conclusions on its ‘review of the market for standalone landline telephone services’ where it stated that:

  • 95% of homes in the UK now buy a bundle including a landline telephone service and broadband service.
  • people who buy bundled services are getting more for their money than before with increases in average broadband speeds and average broadband data usage.
  • consumers have recognised these benefits and the take-up of bundles has significantly increased.


This isn’t the case for everyone however. It’s often the most vulnerable in society who only need or, more importantly, can only afford to have a single landline service. For many this is a necessity to keep in touch with loved ones, carers and the community in which they live. It’s these people who have seen prices increase over time even though their service hasn’t actually changed.

Vulnerable people in particular, who have remained with the same landline provider for years can be affected by price increases to a far greater extent. These users may find the switching process too complicated or fraught with perceived risks such as losing service for a time they don’t want to contemplate.

CICRA recognises that these consumers need protection; one option, which we see happening in other jurisdictions, is to cut the price of standard line rental by at least £5 a month for customers with standalone landline contracts.

Some of the telecom operators in the Channel Islands already subsidise landline prices to certain groups of customers. In the case of Sure in Guernsey, vulnerable consumers, recognised by social services, receive a subsidised tariff (TAS scheme). In Jersey JT has historically provided all residents over the age of 65 with a significantly subsidised landline tariff.

The question is whether or not we think it’s time for the Channel Islands to consider the effect of price increases on all customers who do not take broadband services from their landline service provider and whether a specific set of measures is needed to better look after this group of consumers?

Details

Date:

06/06/2017

Author:

Kevin Werry

Tags:

Competition Broadband telecoms