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Adoption of Bundled Services on the Rise

According to In-Stat, adoption of bundled services is on the rise. Research shows that over the past year, adoption of bundled services has jumped from one-third of respondents in 2004 to nearly half of respondents in 2005. While, according to the 2004 survey, just under one-third of respondents subscribed to bundled services, by 2005, this has increased over 15 percentage points. Of the survey respondents, 47 percent indicated that they do purchase more than one service from a single provider. Furthermore, of those that do buy multiple services from a single provider, over one-third of those respondents are purchasing multiple service bundles, from two or more providers.

Nearly half of respondents to In-Stat's Consumer Internet Survey purchased some type of telecommunication service bundle, defined for the purpose of this report as purchasing multiple services (two or more) from a single provider. Increasing rates of multiple service subscriptions present a growing opportunity for service providers to capitalize on this trend by introducing bundled services. Bundled services allow a single provider to take a greater percentage of a single household's service subscription budget, as well as increase customer loyalty and retention by becoming a one-stop repository for most (or all) of the household's communication and home entertainment needs. This strong business case is also resulting in increasing rates of consumer subscription.

Of the bundled service subscribers, the majority of these are buying traditional service bundles like local phone and long distance, however an increasing percentage are purchasing Internet as part of their bundle package. While there has been considerable growth in bundling subscriptions, it does not appear that most individuals are subscribing to the full triple play offering of voice, video, and data from a single provider. Thus, while adoption of bundled offerings has risen over the past year, there remains ample opportunity to expand upon this type of service subscription.

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