Last updated: February 21, 2008 - 1:20am
BATTLE OF THE BUNDLE IS AT THE DOORSTEP
[SOURCE: Financial Times, AUTHOR: Aline van Duyn and Paul Taylor]
Technological advances mean companies that previously provided different services are now in a race to meet customersâ€™ entire range of communications needs, in what is being called the â€œbattle for the bundleâ€. This intensifying competition is set to play a big part in determining the companiesâ€™ future and, for the winners, should help provide protection from new entrants and evolving technologies. It is already driving spectacular merger deals in the industry as well as cheaper bills for consumers. Cable groups across the world are increasingly providing Internet and telephony alongside their television services, while telecoms providers are investing tens of billions of dollars to be able to sell television subscriptions alongside phone and Internet services. Satellite broadcasters, which for years have taken subscribers away from cable by offering often better channel choices, are trying to find a way around the limits of satellite technology that restrict their ability to offer Internet and telephone services. The competition is pushing merger and acquisition activity in telecoms, notably AT&T's $67 billion acquisition of BellSouth to become the worldâ€™s biggest player. Cable companies are also consolidating: Comcast, the US operator that is the largest cable group in the world, and Time Warner, the second biggest, last year jointly bought the bankrupt Adelphia for close to $18 billion. Yet despite the stock marketâ€™s focus on the head-on competition among telecoms, cable and satellite groups, the reality on the ground in the US is that there is not yet an actual like-for-like fight. Indeed, in the vast majority of the country, cable companies are the only ones that can offer a bundle of three services.
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