It's good to bundle
Until today, the former UK telecommunications monopoly BT has had its ability to offer discounted bundles of telco services restricted by Ofcom, for fear it could abuse its dominant position.
Now, 25 years after BT was privatised, Ofcom has decided there is sufficient competition in the land-line phone market, especially through Virgin Media and BSkyB, and is allowing BT to charge what it wants.
Specifically, this will affect bundles, often given names like ‘triple play'. The categories of telco service on offer are typically:
- Premium TV
- Mobile phone
A triple play bundle could offer any three of these at a cost lower than buying each one individually. A quad play bundle would, of course, include all four. Until now BT has been unable to offer a bundle for less than the sum of its components, although the table below seems to confuse that message.
While this is bad news for rival telco operators, for the same reason it's good news for consumers. BT will now be able to price its services more aggressively and the competition will have to respond. That should mean better value for the rest of us.
Ofcom's chief exec, Ed Richards said: "This is an important step in deregulating telecoms where competition can be relied upon to serve the consumer interest." BT shares are up five percent since the decision was announced.
Heres a table from Ofcom, summarising current bundle offerings: