27 Sep 2019
US cable and fixed telecom bundle rates up to 45% higher than advertised
There is very little true cost transparency for residential customers of cable operators and telecom companies in the US market, as the advertised rate is rarely what the customer receives once all the required equipment and mandatory service or technology fees are added, according to GlobalData, a leading data and analytics company.
GlobalData’s report: ‘@Home – Bundles U.S. Monthly Pricing’ examines individual service provider’s average featured bundle monthly recurring charge (MRC) versus the final cost after equipment or technology fees are added.
Courtney Rudd, Senior Consumer Services Analyst at GlobalData, commented: “In some cases, the final cost is as much as 45% over the advertised rate. For example, Xfinity’s $40 ‘Starter Internet plus Basic’ TV bundle jumps to $58 per month once the additional $18 in equipment costs are added. Prices can also vary based on location.”
According to GlobalData’s research, Verizon had the highest additional costs in August at $24 per month, followed closely by Frontier and Optimum with around $17-$18 in additional equipment fees. AT&T and Google Fiber offered the most cost transparency in bundle price with zero additional equipment or technology fees.
Rudd added: “The lack of pricing transparency in the US market is an ongoing inconvenience for customers and an open invitation for disruptor aggression. A lack of transparency regarding additional service and technology fees could be a key differentiator for service providers wanting to sweep up these disgruntled customers.
“Clear and concise online pricing can also go a long way toward easing potential customer frustrations with bill shock and the online shopping experience, especially when combined with contract buyout and/or cash-back incentives to remove potential roadblocks customers face when considering a change of service providers.”