|Wednesday, March 12, 2014|
What to Know Before Bundling TV, Phone, and Internet Services
If you're still paying a separate bill for each of your telecommunications services—TV, phone, and Internet—you're part of a dwindling population. Many consumers are responding to the persuasive marketing efforts of cable, satellite, and telephone companies pushing bundled services. The packages, commonly referred to as triple-plays, typically include three services—cable or satellite television, telephone, and broadband (also known as high-speed) Internet service—from a single provider. Double-plays include two services, while a quadruple-play adds wireless phone service into the mix.
Bundles are popular because, for many subscribers, they offer significant savings and, if you choose a good service provider, increased convenience. But they're not right for everyone. Here's what to consider before you bundle.
Pros, cons to bundled telecom services
There are some advantages to getting your TV, phone, and Internet service through a single carrier. There's just one bill to pay each month, and that bill typically is lower than it would be for the same services purchased singly. According to an article about bundled services published in the February 2008 issue of Consumer Reports magazine, heavy service users—those who subscribe to broadband Internet, local and long-distance telephone service, and cable or satellite TV with expanded or premium channels—can save hundreds of dollars a year by bundling.
Some customers also consider having just one number to call for billing or technical issues a convenience. On the other hand, if customer service isn't your carrier's strong suit, then bundling just means you'll experience three times the frustration if something goes wrong with your triple-play. Likewise, if all your services are delivered through a single high-speed line to your home, an outage means you could lose your TV, phone, and Internet service all at once.
Perhaps one of the main disadvantages of bundling is that it's more difficult to change carriers.
Consumers should evaluate a bundle based on regular rates, not short-term promotional rates.
"It takes time to research new service, schedule any technicians that need to come in, and be there for the installation," says John Breyault, research director for the Telecommunications Research and Action Center (TRAC), a nonprofit based in Washington, D.C. "There may also be service outages to put up with while the switch occurs."
Is bundling right for you?
According to the Consumer Reports article, bundling doesn't make sense if you don't make many long-distance calls (most packages include unlimited local and U.S. long-distance phone service), don't need broadband Internet service, or only watch basic cable channels. If you're a light user, bundling could result in your paying for more services than you need. On the other hand, if you've been watching HBO over at the neighbor's house and hanging out at Starbuck's to use its high-speed access, a bundle could make a longed-for upgrade affordable.
Breyault encourages consumers considering bundling services to look at what they actually have used for the past three months. He says many subscribers aren't using all the services and features they pay for. If you were to cancel unused services, such as call forwarding or an inside wiring maintenance plan, it's possible that your combined, lower bills would offer a savings over a premium bundle.
How much you'll pay for a bundle will depend on the carrier you choose, and your choices will depend on where you live. Consumer Reports found that the introductory rate for a triple-play was running around $100 a month at the time of its research. The introductory period can range from three to 12 months. Of course, says Breyault, consumers should evaluate a bundle based on regular rates, not short-term promotional rates.
Heavy service users can save hundreds of dollars a year by bundling.
Another consideration is how the cost of services would change if you decided to unbundle at some point. Even if you don't get hit with a penalty for early termination, you'll see your total cost of services jump. And you'll be out any installation and activation fees you paid on bundled services when you switch to a new carrier.
How to shop for a bundle
Shopping for a triple-play or other service package may seem straightforward—just like shopping for each service separately—but bundles create a unique shopping challenge: Comparing multiservice packages can be like comparing apples to oranges, since any two packages are unlikely to be exactly alike. Two bundles, each of which includes TV, phone, and Internet, might offer different channel packages, Internet download speeds, and calling plans. And the challenge isn't only in comparing bundles from different companies—a single company may offer a variety of bundles.
If you decide to shop for a bundle, start by identifying providers to contact. If you're seeing ads and getting offers in the mail, check them out. But if you're happy with your current providers, don't jump ship without checking them out first.
Get specifics about each package. For example, most but not all bundles include unlimited local and U.S. long-distance calling. Other questions you should ask include:
Get offers in writing. And don't be afraid to negotiate. You could request additional months of service at the promotional rate, free premium channels for several months, waived connection charges, or other incentives.
Brace for a rocky transition
In November, the Consumer Reports Web site posted an invitation to new bundle customers to share their experiences. Many of the comments posted since serve as a caveat to anyone thinking about bundling.
For example, "Kim" wrote: "I bundled my soul! ... I have not had a bill under what I was quoted when I was talked into ... 'bundling' for all my services ... It has been a complete nightmare and each month I get to enjoy at least two hours on the phone trying to find my 'bundling discounts' and 'price for life.' "
Other posts are sprinkled with words like "purgatory" and "misery." Most of the complaints seem to concern service not being activated properly or as scheduled, difficulty getting issues resolved by customer service, and billing errors. (A handful of posters say they are satisfied with their new, bundled services and feel the transition went relatively smoothly.)
Comparing multiservice packages can be like comparing apples to oranges, since any two packages are unlikely to be exactly alike.
These types of complaints are not unique to bundle customers. Ask anyone who has ever purchased TV, phone, or Internet service and you're likely to hear of at least one experience where the installation didn't go as planned or customer service was lacking. For bundlers, however, these problems are magnified: You may be able to live without TV for a week while you and the carrier sort out an installation or service problem, but how easy would it be to live without phone and Internet service too?
After you bundle, check your first bill carefully to make sure you're getting the promotional price you were quoted. And mark your calendar with the deadline for canceling free services, such as premium channels, that you don't want to pay for after the intro period.
If you're not ready to join the masses switching to bundled service, appreciate the benefits of buying services a la carte: You can pick the best provider for each one and, except during a power outage, you're unlikely to find yourself cut off from the outside world.
Home & Family Finance® Resource Center