Friday, October 24th 2014

Is Bundling Your Entertainment Service Worth $100?

by Mr Credit Card

Late last week, the Wall Street Journal published an article on how Comcast was doing with regards to their telephone VOIP and internet service rollout. While the article stressed how investors were concerned about them spending too much cash on capital expenditure, I was more interested in the number of sign ups they have had for these services.

The reason I was interested in their numbers was because I felt that their VOIP and Internet Connection Service did not really offer as much value as their competitors. In the fourth quarter of 2006, Comcast added 481,000 new phone subscribers for a total of 2.5 million. The company’s high-speed Internet business also grew sharply, adding 488,000 customers for a total of 11.5 million.

Having subscribed to Comcasts’ cable service (rather than Direct TV – which I should have), I constantly get mails and calls to try their other services. For a while, I used Comcast as my internet service provider. I was paying about $45.00 a month for the highest speed connection – about 5mbps (I think). However, I was not really satisfied with the connection because at times, my connection would slow to a crawl or my VOIP phone would just hang! This, I was told, was due to the fact that I was “sharing lines”.

When Verizon came knocking on my door offering a dedicated fibre optic line to my house for $45.00 a month, but with a download speed of 15mbps, I switched immediately.

For my phone, I have always used Vonage, as they are cheaper than any land line around. But once again, I keep getting mails from both Verizon and Comcast asking me to sign up for their own VOIP service. For comcast, the rate will be $33.00 a month for their Comcast VOIP service if you bundle it with their cable and internet service. If you do not bundle it, the price will be $44.99 a month. To me this is simply ridiculous. Even when you bundle it, it still cost more than Vonage!

Verizon’s VoiceWing is much more reasonable. For 500 minutes a month, the rate is $19.95 a month. For unlimited calling, the rate is $24.99 a month, the same as Vonage. For multiple lines (ie 2 lines), the rate is $44.95 a month. Since, I Verizon will not beat my Vonage, I see no reason to change.

But what puzzles me is that existing comcast customer are willing to pay about $9.00 more on a Comcast VOIP phone (or $108 a year) when cheaper alternatives like Vonage are around. I just don’t get it, there are lower alternatives around and still these companies have the cheek to tell you what great value their service is. In just one quarter, Comcast gained 481,000 in new phone subscribers even though Vonage and Verizon offer a much cheaper alternative! Don’t these consumers do any research?

Is bundling your service and having just one statement worth $100 a year? I don’t think so.

4 Responses to “Is Bundling Your Entertainment Service Worth $100?”

  1. Tight Fisted Miser Says:

    Most people probably just compare the cost to their current phone service. They probably are saving money compared to their conventional phone service and don’t think to look if there are even cheaper alternatives.

  2. HC Says:

    I did bundle. Part of the reason for that was that I had read a few articles (from Consumer Reports, PC Mag, and the like) that said that Comcast had much higher customer satisfaction and reliability than Vonage. This says less about how good Comcast IS than how good Vonage ISN’T, but it was still a factor. In addition, I received a $50 gift certificate for signing up with Comcast VOIP.

    I decided that I’m willing to pay a slight premium to have local technicians available if I have a problem. I’m willing to pay an even smaller premium to have all my services (internet, phone, and cable) on one bill. But the two combined made it worthwhile to me.

    Sometimes, price is not the only discriminating factor.

  3. Mr Credit Card Says:

    HC – You are right. Sometimes, price is not the only discriminating factor. As for me personally, I use vonage before comcast even offered their so-called voip service. I have been very satisfied with the service and since comcast does not offer a cheaper plan, there are no plans to switch on my part.

    Tight Fisted Miser – I suspect you are right as well. Most existing comcast customers will just receive a mail from them about their voip and if they find that it is cheaper than their existing wireline service, they’ll probably switch without comparing!

  4. Clever Dude Says:

    I pay $27 a month for Verizon Dry Loop DSL (no voice line)
    I pay $19 a month for Vonage’s 500 minute plan

    I’d like to upgrade to Verizon’s 3mbps line since the 768kbps line isn’t strong enough for consistent quality for Vonage. However,

    I pay $95 a month for 1000 shared Verizon Wireless minutes. So I’m just considering dropping Vonage.

    Try to research how many minutes you actually use per month to see if you need an unlimited minutes plan.

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