AT&T (NYSE: T) and Verizon (NYSE: VZ) are the two telcos that offer the best bundled service value, according to the latest Consumer Reports survey of the top cable TV, high-speed Internet and phone providers.
Verizon tied cable overbuilder WideOpenWest (WOW) as the No. 1 TV provider with 74 percent, receiving high ranks for reliability and picture quality. WOW was ranked the second-best phone provider, trailing over-the-top VoIP provider Ooma.
"FiOS was rated higher than most major cable companies for TV picture, sound, channel selection, and reliability; it also received our highest mark for Internet speed," the report said.
FiOS also fared well on the bundling front, with 75 percent of FiOS customers saying they would take a "triple play" service bundle of voice, video and data. What's more, 79 percent of FiOS customers also opted for a Quad Play bundle that included Verizon Wireless service.
Verizon currently offers a $10-a-month discount that combines Verizon Wireless with a FiOS triple-play bundle on one bill. Customers outside of the FiOS territory, including subscribers to Comcast (Nasdaq: CMCSA), Cox, and Time Warner Cable (NYSE: TWC), can add Verizon Wireless' service to either a double- or triple-play bundle through their agreement with these cable MSOs.
While it won't release its Q1 2013 earnings until April 18, triple and quad play bundling helped drive up Verizon's subscriber ARPU in Q4 2012.
"[Among] Customers who are deciding to upgrade to additional FiOS services, we are seeing a $45 lift in monthly ARPU," said Fran Shammo, Verizon's CFO, during the telco's Q4 earnings call. Subscriber ARPU was $105.63, up from $103.86 in Q3 and $9.20 higher than Q4 2011.
Verizon is not without its problems. For one, FiOS is not ubiquitous. While it is available in about 18 million homes in 12 states, the service provider has made it clear that it is going to focus on expanding service capabilities like its Quantum 300 Mbps tier in existing communities.
In addition, a number of customers have reported billing issues with their triple and quad-play offerings. "Verizon users had more complaints than most about bills for triple play, and quad-play customers had even more gripe," Consumer Reports said.
AT&T, meanwhile, was rated as the second best telecom to offer an effective bundle. In the report, 68 percent of U-verse users said they would take a quad play service that included wireless service.
U-verse customers who commit to a one-year contract that opt for a quad play receive a $5 a month discount off their wireless bill and U-verse services for two years. The telco's U-verse Choice bundles allow new users to get discounts on any combination of wireless, TV, landline, and Internet service.
Similar to Verizon, AT&T reported in Q4 2012 that a large portion (70 percent) of its U-verse TV subscribers took three or four services. U-verse triple play ARPU was more than $170, up year over year.
- see the release
- see the article from the Consumer Reports May issue (sub. req.)
- here's FierceCable's take
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