As asked, often a bundle is cheaper. I know after a year the rates go up but at that point cancel the bundle and keep just the internet.
Do they get government kick backs by offering phone? Is it for compliance? Anyone with knowledge from the policy side of it?
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Bundling services encourages customers to stick with a single provider for multiple services, increasing customer loyalty and reducing the likelihood of customers switching to competitors. By offering discounts on bundled services, cable companies can incentivize customers to choose their complete package and discourage them from seeking individual services from different providers.
They alos often have existing infrastructure and resources in place for providing multiple services. By bundling services, they can optimize their resources and achieve cost savings.
They are hoping you *won’t* cancel and downgrade to an internet-only plan after a year so after the promotional pricing expires, you end up paying more for all the bundled services.
It also helps steer customers to more expensive services like higher-speed internet. For example if basic internet is $50 and high speed internet is $100 you might choose basic internet. But if you can get high-speed internet and cable and phone for $80 that suddenly looks like a good deal. In reality, you’re paying $30 more than you would have otherwise, it probably costs the company little or nothing to provide those extra services (especially if you didn’t want them and won’t use them) but the whole package looks like a deal. That’s the nature of “promotional” deals, they are trying to draw you in as a new customer and get you to sign up for something that might be expensive long-term. This is one of the many strategies, just like promotional pricing that expires after a while, that they use to do this.
Those are generally temporary deals, many people don’t bother to cancel the extra services when the promotion expires.
Also, it’s a negligible marginal cost to them.
It’s usually to increase the customer retention, although sometimes it just helps get new customers.
It’s not for compliance and they don’t get government kickbacks for signups. In areas where Internet service doesn’t meet the standard (25/3 Mbps currently) government offers subsidy to build or upgrade the network. It also requires to offer phone service if subsidy is received. But subsidy is provided to build, expand, or upgrade the network not for individual signups.
Phone over cable is basically VoIP. It costs far less to support than the cable companies charge. Ooma offers basic VoIP service for free. Phone and cable Internet bundle is cheaper because fewer people cancel phone service than keep it. Also in the long run people with bundles are less likely to switch to a competitor.
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