Service Bundling Isn't The Holy Grail For Telcos

Contrary to industry hype, most Western European consumers still buy Internet access separately from other services like fixed voice/VoIP, TV, or mobile. Our Consumer Technographics data also shows that very few Europeans get either triple or quadruple play delivered in one integrated package. Forrester isn't very surprised by the low adoption numbers, as these service bundle markets are fairly immature and we don't think most consumers will rush to buy them. An equally worrying sign for the heavy defensive betting on service bundles is that the impact on telco profitability is often forgotten. To make consumers interested in bundles, they need discounts, which hurt profitability. Expensive device subsidies and high subscriber acquisition costs will also be needed in the increasingly competitive consumer markets around Europe. The only sustainable strategy in the medium to long term is to bet on innovation and new revenue-generating services, partnerships with new types of players, innovation around voice, and heavy focus on customer service and experience-based design.