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"When creating converged bundles, operators should consider their impact on churn, aspects of service design and potential for service innovation."

Front cover mobile services in converged bundlesFixed and mobile services are highly commoditised in mature markets, and operators are turning to converged bundles as a means to reduce churn, build long-lasting customer relationships and capture revenue that could otherwise go to competitors on standalone services. These bundles have impressive rates of take-up, but this is rarely reflected in significant growth in operator revenue or market share. This report considers the ways that operators position mobile services as a component of fixed–mobile converged bundles and assesses the effect that converged bundles have on market and operator performance.

THIS STRATEGY REPORT:

assesses the level of take-up of fixed–mobile converged bundles in Europe and the impact of such bundles on market share and service revenue
examines how operators in Europe are using mobile plans in converged bundles to differentiate themselves and to align with their competitive positions
analyses how the pricing and discount schemes are used to drive take-up of fixed–mobile converged plans in relation to standalone mobile plans
provides details of the retention outcomes that converged bundles lead to
examines how operators are using fixed–mobile convergence as a means to create unique propositions and deploy service innovation.

Table Of Contents

The Mobile services in converged bundles: customer retention, service design and innovation

About this report


Executive summary


Operators must carefully navigate converged bundles: customer take-up indicates strong demand but retail revenue decline continues


Operators need to consider three areas as they design the mobile elements of their converged bundles


Recommendations


CUSTOMER RETENTION


Converged bundles are rapidly transforming the customer mix of mobile markets


Mobile postpaid churn rates steadily decline as convergence accounts for a significant proportion of an operator's mobile contract base


Fixed broadband retention also improves after converged bundles are launched and mobile service features matter


Loose bundling of mobile services in converged bundles also brings clear retention benefits to fixed broadband


Net Promoter Scores improve for mobile services when customers also buy fixed services, but US operators are exceptions


SERVICE DESIGN


Operators should answer four main questions as they design the mobile service element of their converged bundles


Operators should try to keep high-end mobile customers on standalone plans to prevent revenue erosion from mobile services


If competitive dynamics dictate, operators may have to widen the spread of mobile tiers in their converged bundles


Operators design the tiers of their bundles depending on how effectively they can compete with their existing fixed and mobile capabilities


Multiple-SIM initiatives beyond mobile add-ons can be used successfully as tools for customer acquisition


Shared data pools and reserving valued features for multi-SIM plans help NOS and MEO in Portugal to accelerate mobile subscriber acquisition


When converged bundles become the market standard and their prices are very low, operators may stop rewarding customers for convergence


KPN in the Netherlands demonstrates the benefits of bundling services beyond discounts, in order to encourage convergence


SERVICE INNOVATION


Operators have a wide range of service options that they can add to their converged bundles, either for free or as upsell ...


... but they should also create new value specifically for converged bundles, instead of solely adding more services for more discounts


APPENDIX


ABOUT THE AUTHORS AND ANALYSYS MASON

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