Bundling telecoms and energy services can be a good strategy when market conditions are favourable

Operators have been offering utilities and telecoms services (primarily fixed broadband) to their customers in a single ‘super-bundle’ for a number of years. The rationale for bundling these two services together is based on their perceived status as household essentials that are billed on a monthly basis. Both services also have increasingly low barriers to entry, which makes it easier for energy companies to enter the broadband market and for operators to enter the energy market. Such bundles have the potential to reduce churn on core products while providing a new revenue stream and by offering cost synergies in areas such as customer service. However, it is not clear whether customers want such services bundled together. This comment assesses the different models that telecoms and utilities players have used to offer these super-bundles and analyses the success of current initiatives.