In detail: Unraveling the triple play bundle

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Triple play hdtvSelling triple play bundles that incorporate voice, video and data has been the ultimate marketing and service drive of both the telco and the cable operator to maintain customer stickiness.

Consumers are attracted to the triple play bundle for two big reasons: convenience of one bill and a potentially lower monthly bill for their services. And since no two consumers have the same usage patterns, telcos often allow them to build a custom bundle to fit their particular needs.    

Much of the telcos' work on offering triple play bundles was illustrated in their Q4 2011 earnings reports.

The top three ILECs--AT&T (NYSE: T), Verizon (NYSE: VZ) and new Tier 1 player CenturyLink (NYSE: CTL)--all reported modest growth in their voice, video and data product package sales:

  • AT&T's IP bet: AT&T, despite ongoing voice service and traditional DSL losses, reported that U-verse penetration and the addition of a significant number of subscribers on triple- or quad-play options drove 18.7 percent year-over-year growth in IP revenues from residential customers (broadband, U-verse TV and U-verse Voice) and 4.3 percent sequential growth.
  • Verizon's FiOS drive: Likewise, Verizon, which lost more DSL subscribers and POTS line customers, added 201,000 FiOS Internet customers and 194,000 FiOS TV subscribers. But what was more telling about Verizon's growth was that consumer APRU increased 8.5 percent year-over-year, while FiOS ARPU rose to over $148 per month.
  • CenturyLink ups broadband, IPTV: CenturyLink meanwhile added 70,000 new broadband customers and increased its PrismTV subscribers by 16,000 with a broadband attachment rate of more than 90 percent.

Video continues to be a big triple play factor at the large telcos. Interestingly, both AT&T and Verizon added 882,000 and 716,000 subscribers during the quarter, surpassing Comcast's (Nasdaq: CMCSA) 465,000 subscriber adds.

Outside of the top three players, triple play promotions continued to provide big paybacks for a number of Tier 2 ILECs, including Windstream (Nasdaq: WIN), FairPoint (Nasdaq: FRP), Hawaiian Telcom  (Nasdaq: HCOM) and SureWest (Nasdaq: SURW):  

  • Windstream: At Windstream, consumer broadband revenues rose 9 percent to $464 million. As of the end of Q4, the service provider had 1.2 million broadband subscribers and 445.8 satellite video subscribers. While it has yet to introduce its own IPTV product as it has chosen to continue offering satellite TV service, the service provider added a video streaming option under its new 'Merge' broadband product line.
  • FairPoint ramps up: Although it still is in the process expanding broadband access across its New England footprint, FairPoint added over 24,000 new DSL subscribers, far more than the 1,300 it added in 2010. The service provider allows consumers to build their own custom bundles with various speeds ranging from 768 Kbps to 30 Mbps, where available, with voice services and satellite video.
  • Hawaiian Telcom's new journey: Hawaiian Telcom added over 1,250 broadband subscribers in the fourth quarter, increasing its total broadband subscriber base to over 103,230. At the same time it also made progress with its IPTV Hawaiian Telcom TV (HTTV), ending 2011 with 1,600 subscribers, or almost 6 percent subscriber penetration of the 27,400 households it has enabled.
  • SureWest ARPU climbs: Video services continue to be a driving growth factor in SureWest's triple play bundle. The service provider, which is in the process of being acquired by Consolidated Communications, reported that almost 98 percent of its Advanced Digital TV subscribers bundle Internet and 79 percent subscribe to a triple-play with ARPU of $148.

In the chart below, we list the triple play bundles of the top ILECs and the choices they are providing to consumers as they battle aggressive cable operators leveraging their existing coax to lure away consumers with their own brands of voice, high speed data and video.

Triple Play Bundles by Carrier
Provider Package Broadband Voice Video Pricing (per month)
AT&T U-family TV + Internet Pro up to 3 Mbps 250 minutes U-verse voice up to 130 channels $89 (for 12 mo.)
  U-200 TV + Internet Pro up to 3 Mbps 250 minutes U-verse up to 270 channels $104 (for 12 mo.)
  U-300 TV + Internet Elite up to 6 Mbps 250 minutes U-verse voice up to 360 channels $124 (for 12 mo.)
  U-300 TV + Internet Max up to 12 Mbps 250 minutes U-verse voice up to 360 channels $119 (for 12 mo.)
  U-450 TV + Internet Max up to 12 Mbps Unlimited up to 430 channels $161 (for 12 mo.)
Verizon Verizon Triple Play (Standard) .5 to 1 Mbps DSL Unlimited local & regional  205+ channels of satellite $59.99
  Verizon Triple Play 1.1 - 15 Mbps based on VZ line qualification Unlimited local & regional     
  Verizon FiOS 15/5 Mbps Unlimited local & regional  FiOS TV Prime HD w/200+ channels $94.99
  Verizon FiOS 25/5 Mbps Unlimited local & regional  290+ channels w/70 in HD $109.99
CenturyLink Voice, High Speed Internet and TV Bundle Varies by location (1-40 Mbps) Unlimited local & regional  DIRECTV satellite  $89.95
  Voice, High Speed Internet and TV Bundle Varies by location (1-40 Mbps) Unlimited local & regional  DIRECTV CHOICE XTRA $94.95
Frontier Voice, DSL and satelltie TV bundle varies according to location Unlimited statewide 120 DISH satellite channels  $74.50 (for 12 mo.)
  FiOS bundle 15/5 Mbps Unlimited statewide 225 all-digital channels $119.99 (2 yrs.)
Windstream Merge (High-Speed Internet + Online video) 3 Mbps Unlimited Calling DISH Network (4 options from $44.99 - $101.99) $52.99 (varies by location)
          $62.99
          $72.99
  Merge Plus 6 Mbps Unlimited Calling   $54.99
          $64.99
  Merge Flash 10 Mbps Unlimited Calling   $74.99
          $57.99
          $67.99 
          $77.99
  Merge Flash24 24 Mbps Unlimited Calling   $64.99
          $64.99
          $84.99
FairPoint Triple Point 768 Kbps Unlimited calling (US & Canada), no features 150 digital DIRECTV channels $88.48
      As above Choice Xtra (210+ digital channels, 1 movie channel) $93.48
      As above Choice Ultimate Package (225+ digital channels) $99.48
        Premier (285+ digital channels, 31 movie channels, 35 sports channels) $144.48
      Exchange Essentials: Unlimited calling, 3 features 150 digital DIRECTV channels $93.48
      As above Choice Xtra (210+ digital channels, 1 movie channel) $98.48
      As above Choice Ultimate Package (225+ digital channels) $104.48
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $149.48
  Triple Point w/STANDARD 3 Mbps Unlimited calling (US & Canada), no features 150 digital DIRECTV channels $92.99
      As above Choice Xtra (210+ digital channels, 1 movie channel) $97.99
      As above Choice Ultimate Package (225+ digital channels) $103.99
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $148.99
      Exchange Essentials: Unlimited calling, 3 features 150 digital DIRECTV channels $97.99
      As above Choice Xtra (210+ digital channels, 1 movie channel) $102.99
      As above Choice Ultimate Package (225+ digital channels) $108.99
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $153.99
  Triple Point w/PREMIUM 7Mbps/768 Kbps Unlimited calling (US & Canada) but no features 150 digital DIRECTV channels $96.99
      As above Choice Xtra (210+ digital channels, 1 movie channel) $101.99
      As above Choice Ultimate Package (225+ digital channels) $107.99
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $152.99
      Exchange Essentials: Unlimited calling, 3 features 150 digital DIRECTV channels $101.99
      As above Choice Xtra (210+ digital channels, 1 movie channel) $106.99
      As above Choice Ultimate Package (225+ digital channels) $112.99
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $157.99
  Triple Point w/ULTRA 15/1 Mbps Unlimited calling (US & Canada), no features 150 digital DIRECTV channels $116.99
      As above Choice Xtra (210+ digital channels, 1 movie channel) $121.99
      As above Choice Ultimate Package (225+ digital channels) $127.99
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $172.99
      Exchange Essentials: Unlimited calling, 3 features 150 digital DIRECTV channels $121.99
      As above Choice Xtra (210+ digital channels, 1 movie channel) $126.99
      As above Choice Ultimate Package (225+ digital channels) $132.99
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $177.99
  FAST 5/2 Mbps Unlimited calling (US & Canada), no features 150 digital channels $94.98
        Choice Xtra (210+ digital channels, 1 movie channel) $99.98
        Choice Ultimate Package (225+ digital channels) $105.98
        Premier (285+ digital channels, 31 movie channels, 35 sports channels) $150.98
      Exchange Essentials: Unlimited calling, 3 features 150 digital channels  $99.98
      As above Choice Xtra (210+ digital channels, 1 movie channel) $104.98
      As above Choice Ultimate Package (225+ digital channels) $110.98
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $155.98
  EXTRA-FAST  15/2 Mbps Unlimited calling (US & Canada), no features 150 digital channels $104.98
      As above Choice Xtra (210+ digital channels, 1 movie channel) $109.98
      As above Choice Ultimate Package (225+ digital channels) $115.98
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $160.98
      Exchange Essentials: Unlimited calling, 3 features 150 digital channels $109.98
      As above Choice Xtra (210+ digital channels, 1 movie channel) $114.98
      As above Choice Ultimate Package (225+ digital channels) $120.98
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $165.98
  SUPER-FAST 15/15 Mbps Unlimited calling (US & Canada), no features 150 digital channels  $116.98
      As above Choice Xtra (210+ digital channels, 1 movie channel) $121.98
      As above Choice Ultimate Package (225+ digital channels) $127.98
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $172.98
      Exchange Essentials: Unlimited calling, 3 features 150 digital channels $121.98
      As above Choice Xtra (210+ digital channels, 1 movie channel) $126.98
      As above Choice Ultimate Package (225+ digital channels) $132.98
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $177.98
  ULTRA-FAST 30/15 Mbps Unlimited calling (US & Canada), no features 150 digital channels $96.98
      As above Choice Xtra (210+ digital channels, 1 movie channel) $101.98
      As above Choice Ultimate Package (225+ digital channels) $107.98
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $152.98
      Exchange Essentials: Unlimited calling, 3 features 150 digital channels $101.98
      As above Choice Xtra (210+ digital channels, 1 movie channel) $106.98
      As above Choice Ultimate Package (225+ digital channels) $112.98
      As above Premier (285+ digital channels, 31 movie channels, 35 sports channels) $157.98
Cincinnati
Bell
Home Pak Lite 768 Kbps Unlimited local, 30 mins LD DIRECTV $58.99
  Zoom Town 5Mbps/768 Kbps Home Pak Lite, 30 mins LD DIRECTV Choice XTRA $109.98
  Fioptics 10/1 Mbps As above Fioptics TV w/125 Digital and 45 HD $97.49
  Fioptics 20/2 Mbps As above Fioptics TV w/125 Digital, 45 HD $107.49
  Fioptics 30/ Mbps As above Fioptics TV w/125 Digital, 45 HD $117.49
  Fioptics 50/10 Mbps As above Fioptics Standard TV and DVR $157.49
  Fioptics 100/20 Mbps Unlimited calling features Fioptics Standard TV and DVR $357.49
TDS Telecom TDS Value Bundle 1 Mbps/512 Kbps Unlimited local, 30 mins free LD DISH Network w/100 channels $79.93
  5-Star Phone Package  5 Mbps/512 Kbps As above DISH Network Classic Silver 200 w/ Locals $109.98
    15 Mbps As above DISH Network Classic Silver 200 w/ Locals $144.93
  Basic TV + Express High-Speed Internet + Classic Phone 5 Mbps/512 Kbps As above IPTV service w/20+ digital TV channels $60.99
  Expanded TV + Express High-Speed Internet + Classic Phone 5 Mbps/512 Kbps As above Expanded IPTV w/130 channels $99.99
  Expanded Plus HD TV 25 Mbps As above Expanded IPTV w/190 channels $141.99
Hawaiian Telcom  myChoice Plus 7 Mbps Unlimited inter-island, nationwide, & Canada   $54.99
Consolidated Communi-cations Triple Play Bundle 3/1 Mbps high-speed Internet Unlimited local & LD Select TV package (80 channels, 45 music channels) $74.95 (2 yrs.) or $84.95 (1 yr.)
        Expanded TV: 135 channels, 45 music channels above plus $11
Lumos Networks Lumos Triple Play 10/3 Mbps Unlimited local & LD Lumos Networks TV $129.94
SureWest Classic Combo-ADTV Copper 3/1 (Burstable to 17 Mbps upload) Digital Phone 500 Digital IPTV $162.94
  Classic Combo (with phone) FTTH 3/3 Mbps Digital Phone 500 Digital IPTV $162.94