A 'bundle' of joy - or a deal that's set to unravel?

Your TV, phone and broadband link all from one provider ... but convenience has a cost

Sunday 19 March 2006 01:00

Left hanging by landline home-phone deals? Bamboozled by broadband? Teased by digital TV?

Picking your way through today's thicket of telecoms deals can be a tortuous process - with changing prices, improved offers and bonus add-ons nearly every week.

To try to make life less confusing for consumers, a number of companies are beginning to "bundle" deals - wrapping two, three and, soon to come, four different services together for a single monthly fee.

With Homechoice, for example, you pay from £17.99 a month (£14.99 in the first two months) for a basic deal giving you free landline calls after 6pm and all weekend (5p a minute at other times); a fast broadband speed of 2MB, for a capped amount of music and video downloads; and 35 TV channels.

You will need an existing BT landline connection, which is an extra £11 a month, and will receive two bills - one from Homechoice and one from BT for line rental. Currently available only in London and parts of Stevenage, Hertfordshire, and with around 35,000 subscribers, the package is being rolled out nationally later this year.

Bundling deals will be more familiar to cable customers, who were first offered them two years ago.

For instance, Telewest offers "3 for £30", a basic monthly deal with up to 2MB broadband, a starter TV pack with 40 channels and free landline calls at weekends. More than a third of all its customers have signed up, it says. However, after a year, the monthly cost rises to £33.99.

For heavy-duty users, Telewest offers a "supreme bundle" at £68 a month. This provides superspeed broadband (up to 4MB), over 100 channels and free landline calls at any time.

(No bundling deals include the 0845 and 0870 information and help numbers, or 090 premium calls.)

"Triple play", as it's called in the industry, is becoming popular at the expense of the bundling of two services - usually internet and landline deals where you get a small discount, £2 or so, for signing up for a second service.

While the usual "triple" mix is internet, landline and digital TV, some providers also bundle mobiles with the landline and broadband service, says Chris Williams of the price-comparison service Uswitch.com. "BT's new Fusion product lets users benefit from landline rates when they are using their mobile at home," he explains. "Other providers to do so include Toucan and TalkTalk [which also use a BT landline to offer services]."

As yet, no provider offers "quad play": mobile, landline, broadband and digital TV all on one bill. But this looks set to change later this year, with BT launching a TV-via-broadband service that will give customers programmes on demand.

And if the takeover of Virgin Mobile by NTL goes ahead, it is anticipated that NTL too will offer quad play.

But convenience may come at a price. Critics warn that bundled deals are just money-spinners for suppliers. They're "expensive and inflexible", warns Martin Lewis, founder of the financial website money- savingexpert.com. "Companies that are cheap on broadband are not cheap for phone calls - and the cheapest phone providers usually cost 70 per cent less than the rates offered by broadband firms.

"The variable cost of these [bundles] - normally the landline phone - is usually the expensive one and that's how suppliers make their money."

For example, if an existing AOL internet customer decides to sign up to the firm's Talk Evening and Weekends landline deal, all their calls will automatically be routed by AOL.

While calls to UK landlines will be free after 6pm and throughout the weekend, they will cost 3p perminute at all other times. For calls to mobiles, the cost is at least 5p in off-peak hours and 13p or more weekdays.

Cheaper landline deals are readily available. For instance, the "prefix" company Call1899 - where you dial the set digits before your chosen number - charges 3p for a call of any length to a UK landline.

So a 30-minute conversation on AOL during the day would cost 90p, but only 3p on Call1899. And calls to mobiles on Call1899 cost just 3p a minute.

Customers should also question whether they will really make proper use of the bundle - maximising the amount of broadband downloads, say, or making enough telephone calls.

Many people could end up paying for a bundle that they are not going to use fully, stresses Mr Williams at Uswitch.com. "Consumers need to consider their circumstances carefully before deciding."

Watch out for other downsides too. If your company suffers a technical glitch, it is possible you could be left without any of your "triple play" services.

Additionally, broadband is normally offered as a 12-month contract, and so bundled packages also tend to be 12-month deals (although a few, like Virgin, offer a monthly contract). This can cause difficulties if you change your mind about one aspect of the bundle and want to leave.

By contrast, if you take the products separately, you are free to change your telephone package or supplier whenever you like. Of course, with separate elements, you will still have to pay any early-release penalty - usually the cost of each monthly fee remaining on your contract.

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