The Power of Bundling

By John Castro

Telecommunications services are often referred to as the fourth utility. Now a leading analyst firm is asking whether telcos could start selling the other three.

In recent months, investment analysts at Morgan Stanley have identified the energy industry as a prime opportunity for telecommunications companies. But the synergies apply to both sides, so much so that we’re seeing energy firms looking to cross-sell into the telco industry as well.  

With the rise of smart home technologies relying on network services to control everything from garage doors to washing machines – and the huge volumes of behavioural data this generates – it’s a market development worth watching. 

Why the energy industry?

The energy industry is a prime target due to the potential for cross-selling, which many telcos already specialise in and vice versa. The power of cross-selling creates an opportunity to bundle packages and provide customers with more streamlined, discounted and high-quality services.

This means users will be able to include mobile, broadband (or nbnTM) and energy bills into one household bill. Fewer bills coming in each month and the simplicity of dealing with a single provider has the potential to increase customer satisfaction and reduce churn.

This was recently supported by Vocus Chief Executive of New Zealand, Mark Callander when he spoke about “shaking up the current offering” by “offering customers broadband, landline, mobile, gas and electricity – all on the same bill, with great customer service.”

Households have been subject to an increasingly volatile energy market in recent years with fluctuating prices and uncertain supply. That makes these service providers ripe for disruption, with customers more open to new models that cater directly to their needs. Amaysim already launched energy to their customers in 2017 leveraging their seamless customer service and software development to provide a new simple and convenient energy service.

“If you’re a service provider you’d be looking at energy retailing as a potential gold mine,” stated electricity and broadband comparison site Canstar Blue spokesman Simon Downes.

Prepare for further competition

While there are great opportunities for telcos to enter the energy market, they must also expect increased competition. In New Zealand we’ve already seen movements from energy providers delving into cross-selling telco services, such as TrustPower, one of New Zealand’s largest electricity generators and retailers. 

Why is it necessary?

Building environments that house more services under the same provider will create a better environment for artificial intelligence and sensor-based technology services to be developed.

The growing popularity of smart home assistants like Google Home and Amazon Alexa has raised the connectivity stakes within homes across Australia and around the world. With power management technology advancing rapidly, these developments could be well placed to drive down energy prices based on individual needs and geographical trends.

Competition in the telecommunications industry is largely based on being able to provide customers with the latest, most innovative and cost-effective products. We must keep looking for new technologies and business opportunities to experience growth.

To find out more about how you can add more services to your end customer, contact your account manager now.