Box 2. Bundled services
Bundling refers to the sale of a number of services combined in a single price package, usually excluding the
possibility that customers can obtain a single service without taking or paying for the other services in the bundle.
Bundling of services can help generate economies for the supplier through, for example, reduction in service marketing
charges, customer acquisition costs, billing charges, etc. For the client bundling often has the advantage in that prices
are lower compared to having to subscribe to each service individually, however customers may not want all the
services offered in a bundle. A client who does not want IPTV services may be obliged to pay for these services when
subscribing to certain triple play bundles.
At the same time a bundle, while nominally offering a better price than purchasing the same services separately, is
also difficult to assess when trying to compare prices across a range of different offers. A service provider may also
use a service in the bundle to cross-subsidise other services using this to obtain an unfair market advantage. Bundling
may also make it difficult for regulators to define markets, assess market power, and therefore understand whether or
not dominance exists in a given market.
In this context, next generation networks (NGN) provide the technical underpinning of convergence,
representing a single transport platform on which the carriage of previously distinct service types (video,
voice, and data) “converges”, together with new and emerging services and applications. While different
services converge at the level of digital transmission, the separation of distinct network “layers” (transport,
control, service and applications functions – see Figure 1) provides support for competition and innovation
at each horizontal level in the NGN structure. At the same time NGNs also create strong commercial
incentives for network operators to bundle, and therefore increase vertical and horizontal integration,
leveraging their market power across these layers. This may bring about the need for closer regulatory and
policy monitoring, in order to prevent the restriction of potential development of competition and
innovation in a next generation environment, and therefore the risk of reducing benefits for consumers and
the potential of new networks for economic growth.
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