Friday, November 28, 2008

Comcast Pioneers Business Model of "Bundled Services"

By Rachel Smith

For years now, the competition between the cable TV and the satellite TV industries has been intense, and has led both sides to do some pretty interesting things in an effort to get ahead. Basically, both cable TV and satellite TV have been trying to take advantage of their strengths while downplaying their weaknesses. One thing that the cable TV industry can do much better than the satellite TV industry is bundle together various telecommunications services together with cable TV service. Comcast has been especially innovative in this effort.

Comcast takes advantage of the fact that cable TV is delivered using the fixed connection of a cable by offering other services that can be delivered over that cable or over other land based connections. For example, digital cable TV technology makes it relatively easy to add high speed Internet service to a home over the same cable. It's also fairly easy to add a high tech digital phone service that offers a high level of service and value- especially when compared to the local telephone company.

While any company can ally itself with other companies to offer bundled services, Comcast can provide better service at a lower price simply because it doesn't have to ally itself with any other companies. For example, it's not unusual for a satellite TV company to have its service bundled together with DSL and phone service from a phone company, but while such bundled packages may cost about the same amount as one of Comcast's bundled packages, the quality of service isn't as good because the technology that's provided in these bundles isn't as good. For example, the broadband cable based Internet connection provided by Comcast is about six times faster than the fastest DSL service.

Also, the digital voice phone service offered by Comcast is a much better value than anything offered by a conventional phone service- mostly because of access to free unlimited long distance to numbers in the United States and Canada.

Bundling together digital cable TV, high speed Internet, and home phone service has a number of less obvious advantages. For example, the fact that you get all of these services from one company makes it so that you only have to deal with one company. This is another advantage that Comcast is especially good at providing because it doesn't farm out services to other companies. Even though some other bundled packages have the illusion of being through one company, the fact that they're often farmed out to one or two other companies means that if you need help, you can really get the run around. In fact, it's easy to imagine calling one company and being told that your problem is another company's responsibility and then calling the second company, which tells you that the other company handles that field.

With a company like Comcast that handles all of the telecommunications services that it markets, it's simply not a concern. Similarly, the fact that Comcast is responsible for the installation of all three services means that they'll all function correctly together before the technician leaves you home. That's something that companies offering other types of bundled packages can't guarantee.

In summary, the savings, convenience, and service that are offered by bundling telecommunications services make cable TV companies incredibly attractive in a lot of ways, and Comcast is one of the companies that's been instrumental in refining this business model. - 15485

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