Would you like pay-TV channels with your electricity plan?

Regulatory sparks will fly in a converged utilities market

Thu, Jul 24, 2014, 02:00

The future of the telecommunications market is quad-play, and who knows, it is probably quint-play.

Consumers will “increasingly purchase bundles of products” from a single provider, predicts the Commission for Communications Regulation (ComReg), and this increase in bundling, in the polite language of its latest strategy document, “poses a challenge”.

Bundles now account for more than half of subscriptions in the fixed market, with demand for triple-play products (television, broadband and landline) rising as take-up of single and double-play products slides. We like spending all our money in the one telecoms shop.

Eircom is technically in the quadruple-play game, having added its eVision television service to its landline, mobile and broadband offer late last year, although its television customers are certainly the lesser-spotted. UPC is linking up on mobile with Three, which will also make it a quad-player from some time next year. All bets are off, meanwhile, as to what Vodafone does next.

“One or more market entry or exit could significantly alter competitive conditions,” says ComReg. This is one of those broad statements that could apply to most markets, and yet also has particular relevance in an industry where traditional “telecoms” companies (such as BT) are fighting in the same space as media sector behemoths (such as BSkyB).

The crystal ball may be buffering somewhat, but ComReg can still see the sparks in its future. ESB, it notes, has announced its desire to build a fibre broadband network in partnership with Vodafone by using its existing electricity infrastructure. Broadband products sold by the ESB through this joint venture will presumably be regulated by ComReg.

But won’t energy companies that build or gain access to broadband networks eventually want to cross-sell services too? In a “quint-play” future, joint venture entities might offer consumers a bundle of television and telecoms services, plus the one thing they ultimately need to make them all work – electricity.

In that scenario, consumers could opt for a single utility provider, using as the basis for their choice any or a combination of the following: who has the best television package, who promises the fastest broadband speeds, who offers the lowest mobile prices and/or who is the cheapest for making toast.

“Would you like Sky Sports with your residential electricity plan?” is the kind of question that could baffle the consumers of the future. “Can I offer you an off-peak energy discount with your 4G mobile contract?” the nice customer service man could suggest. Think about the switching nightmare, then try stop thinking about it.

In Australia, energy supplier ActewAGL has for some years now provided the example of a true “multi-utility”. Through an agreement with telecoms firm TransACT, ActewAGL offers consumers a bundle of services that includes electricity, gas, green energy, landline, mobile, broadband and pay-TV.

We are a long way off such a head-scratchingly converged world, but even in the era of quad-play bundles, there is evidence that rather than enjoying the simplicity of a single provider, consumers are increasingly feeling confused and frustrated.

ComReg statistics indicate “a growing number of incidents where consumers have found it necessary to complain to ComReg” in order to have their complaints addressed – the implication being that service providers, the one to which we are trusting not just some but all of our telecommunications needs, are ignoring our grievances. “This is not a desirable trend,” ComReg states bluntly.

In the next paragraph of its Strategy Statement for Electronic Communications 2014-2016, the regulator observes a growing trend for sophisticated product bundles with attributes such as speed, coverage and fair usage policies that consumers may find “difficult to assess”. So it is not just your imagination: products and offers are “becoming more complicated”, and it is making ComReg’s effort to help consumers “make informed choices” that bit trickier.

There are quirks in the regulation of the telecommunications market that date from an era when being a big player in cable and satellite television had nothing to do with who was dominant for phone and internet services. Regulating a continuously changing market isn’t easy at the best of times, and with ComReg subject to the public sector recruitment moratorium, these are not the best of times.

Of course, the death of the landline, when the day finally comes, will make life easier – but just a little.

Sign In

Forgot Password?

Sign Up

The name that will appear beside your comments.

Have an account? Sign In

Forgot Password?

Please enter your email address so we can send you a link to reset your password.

Sign In or Sign Up

Thank you

You should receive instructions for resetting your password. When you have reset your password, you can Sign In.

Hello, .

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

Thank you for registering. Please check your email to verify your account.

We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.