Internet service providers are seeing higher average revenues per user (ARPU) through bundled offerings that include other services like live television, landline phone, wireless phone and home security, according to a new report from Parks Associates.
The report, published on Wednesday, concludes that home broadband Internet providers that offer a bundle package with two services — typically called a “double play” offering — have seen their ARPU increase from around $125 during the third financial quarter (Q3) of last year to nearly $150 during Q3 2024. As bundles grow to include additional services, ARPU grows accordingly, the report notes.
While ARPU may be increasing, the number of homes taking advantage of value packages is decreasing, concludes Kristen Hanich, a research director at Parks Associates.
“As of 3Q 2024, only 57 percent of U.S. internet household had a value-added bundle, versus 61 percent in 2023,” Hanich said on Wednesday.
Parks Associates concludes that the downward trend of consumers taking advantage of double-play, triple-play and other bundle offerings indicates that more homes are opting instead of bare-bones broadband Internet service — but companies shouldn’t be quick to write off the power of the bundle, which has the ability to drive up consumer satisfaction and loyalty to a provider.
“Bundling serves a valuable role in increasing customer satisfaction and loyalty, while also driving up ARPU in a way that benefits the customer,” Hanich said. “Consumers tend to get better pricing with bundled services than with separate ones. Decreasing adoption of value-added service bundles suggests growing price sensitivity as well as some customers willing to go without.”
The report is expected to be further detailed at the Parks Associates’ 19th annual Connections Summit during the Consumer Electronics Show in Las Vegas. The event takes place on January 7.
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