Subscription bundling for telcos and merchants
Bundling allows telecom companies to grow their share of revenue derived from digital services, augmenting their traditional voice and data revenues. There is a “direct link between average revenue per user (ARPU) and user-retention effects of carrier-bundled paid media services”, according to the recently released Ovum OTT Media Services Consumer Survey & OTT CSP Partnership Study.
As OTTs and other digital merchants look to expand into markets with low penetration of credit card, partnering with telcos enables them to acquire new customer segments quickly. Of the 318 OTT-telco video partnerships tracked by Ovum globally, 41% comprised bundling. Hard bundles make up 14% (or 34% of bundles) – in this case a paid OTT service is included with a carrier's other offerings such as Internet or TV subscriptions. While 1% of partnerships employed both hard and soft bundles, 26% of all OTT-telco partnerships (or 63% of bundling arrangements) are soft bundles, in which a time bound subscription is offered for a discount.
In this whitepaper, we delve deeper into the dynamics of telco subscription bundling.
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