Bundles Are the Way to Savings, But Operators Can Be Sneaky
There's a simple way for broadband customers to save money on their monthly bills: Take on more services that they'll never use.
I got a personal introduction to bundled services this month without even trying. Earlier this year, my household broadband connection, supplied by Comcast, became increasingly unstable. I manually rebooted our router and cable modem several times a day, always knowing it wouldn’t solve the problem for long.
Finally, I called Comcast to see what it could do to fix the issue. On my second call I spoke with a cheerful woman who offered to get me more bandwidth and a lower bill. Great, let’s do that.
This month I got that lower bill. It’s about $20 lower -- even with the $15 charge for Xfinity TV.
I don’t get TV from Comcast, and I was pretty sure what had happened, but I called the company anyway to see if I could get that TV charge removed. The pleasant woman who took my call checked with her supervisor and told me that I had signed up for a TV and internet bundle, and that if I removed the TV service my internet would jump back to the pre-bundling price. So I’m paying less money to get more services that I won’t use.
I can live with that. The call got weirder, though, when I asked if this was a limited offer or a permanent price. It’s a limited-time offer, she told me. It would expire in February 2015. That information was on my bill, she assured me.
Where exactly was the information? I asked, looking at the bill.
Then she changed her story. The information would appear on my bill as the end of the offer got closer. When would that be? Next month would be closer, but that probably wasn’t what she meant.
It will appear on the January bill, she revealed. So if I don’t want to pay a higher price for the bundle, I’ll have less than a month to change my service. Is that right?
She cheerfully advised me to write a reminder on my calendar. That’s about when I hung up.
To get more information on bundling, I spoke to Brett Sappington, director of research for Parks Associates. Consumers like bundles, he assured me. Consumers like having one bill to pay, instead of two or three. And operators like them because bundles reduce customer churn. Operators are looking to bundle additional subscription services, such as home automation and home security.
“Broadband, by and large, is the most profitable service” for bundling. Once a line is set up, it’s simply a matter of maintaining it and collecting fees," Sappington said.
I don’t have a problem with savings, but I do have a problem with the way operators run their businesses. For one thing, when broadband prices are so flexible that I can get more bandwidth for less money simply by taking another service I won’t use, that devalues the broadband connection. I don’t know what it’s actually worth, but it now feels like a ripoff at any price.
Not letting me know that I had signed on for a limited time offer is shady as well -- Comcast is counting on me not noticing when the deal ends.
“Many of them try to bank, by and large, that consumers don’t read their bill until they look up one day and say, ‘Wow, this has gotten expensive,’” Sappington said. “They don’t wave a big red flag and say, ‘By the way, your price is about to go up.’”
Bundles are a good deal, certainly, but those deals can end without much warning. Customers need to pay rigorous attention to every bill every month -- and call to demand better prices when limited offers expire.
This article appears in the September 2014 issue of Streaming Media as "Bundles Are the Way to Savings, Like It or Not."