Abstract
Bundling is a pricing and marketing strategy by firms that combine products or services together in order to sell them as a single combined unit for a special price. Bundling allows the convenient purchase of several related products and/or services from one firm. Bundling is a strategy used by wireline providers to combine their voice and broadband service offerings; by mobile operators to provide one-stop shopping for handsets and their mobile services; and by broadcasters to provide a bouquet of their channels. However, bundling may have anticompetitive and anticonsumer consequences such as firms’ leveraging their dominant position in one product to subvert competition in another product; engaging in predatory pricing; not being transparent in providing the information on bundles to consumers, to name a few. In this chapter, specific cases of bundling in the telecom domain are discussed. The difference between wholesale and retail bundling is described. The corresponding regulatory implications and possible interventions are detailed out. Specific questions that are addressed in this chapter are as follows:
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What is bundling in telecom and how does it affect competition?
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What are the regulatory interventions needed to handle bundling?
I do think, long term, you’re going to see less single-play players and more double- and triple-play players, and more bundling. Because without question the customer expectation is going to change, and it is changing. Their expectation is around having everything on their device, having their video on the device, being able to do the things around social on the device. So, I just think that for carriers to continue to grow, they’re going to have to diversify. And that will continue to happen long term—and that’s not just in the U.S. I think that’s globally.
—Glenn Lurie, AT&T’s former Mobility Chief.*
*Available at: https://www.fiercewireless.com/wireless/at-t-s-former-mobility-ceo-expect-u-s-carriers-to-diversify-and-bundle-more-services
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Partly based on article that appeared in FINANCIAL EXPRESS on March 8, 2018, with the permission of The Indian Express (P) Limited.
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Sridhar, V. (2019). What Is the Effect of Bundling in Telecom?. In: Emerging ICT Policies and Regulations. Springer, Singapore. https://doi.org/10.1007/978-981-32-9022-8_2
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DOI: https://doi.org/10.1007/978-981-32-9022-8_2
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