Planhacker: Do Bundles Make Economic Sense?

Bundling deals — where you get phone service, Internet access and other options on a single bill — can simplify your life. But do they really represent the best value for everyone?

This week saw a lot of activity on the bundle front: Telstra announced it was increasing the download limits on many of its bundle deals, and Internode introduced a new bargain-priced bundle combining phone and Internet. For telecommunications companies, selling multiple products to a single customer is an easy way to increase profits. For consumers, it means fewer individual bills to pay and — in some cases — access to prices you can't get for individual services. However, it doesn't necessarily mean the best value-deal you can get.

The biggest issue with bundling deals is that they generally require you to sign up for a 24-month contract (though as commenters have pointed out, there are some exceptions). That means you can't necessarily take advantage of new technologies or better prices when they hit the market. It's especially problematic if your bundle includes a mobile phone and you move house and discover that the network service in your new location is appalling or non-existent

Changes to bundling deals also often aren't applied to existing customers either. With the Telstra bundles announced this week, for instance, existing customers only get upgraded if they are willing to effectively sign up to a new contract, locking themselves in for even longer.

The second issue is that bundles assume you'll use communications technologies in a particular way, and that doesn't always square with reality. Many bundles, for instance, include free unlimited local calls. If nearly all your calling happens on a mobile, then this is a largely meaningless benefit. In the same way, getting a discount on pay TV doesn't mean you're getting good value if you hardly ever watch pay TV channels in practice. Getting peak and off-peak download allocations is handy if you do a lot of torrenting, but largely irrelevant if you don't.

We say this a lot at Lifehacker, but it bears repeating: the best way to get value from communications services is to analyse your existing usage habits and use that as the basis for choosing a good-value deal. If your habits match up with a particular bundle and you don't object to being locked in, then a bundle could be a sensible choice. But it's not a universal panacea.

We've linked below to the bundle listings for major telcos and ISPs (we're presuming a landline here, so we haven't include mobile-only options). Whether they match up to your needs is ultimately up to you to decide. If you do choose one, you'll be stuck with that deal for two years, so make sure you're happy with it.

Lifehacker's weekly Planhacker column rounds up the best communication deals.


Comments

    I think it’s amazing the number of people who go with bundle deals as a blanket approach to save a few bucks, I know a few people who have done this, without even attempting to price up individual services with various providers to get the best value for money while complimenting their usage.

    I'm a part of only a single bundle deal, which with iPrimus combining my phone line and ADSL2+ plan. Here's how I've connected my various services for the lowest bottom line:

    -Phone: iPrimus. This is purely for line rental only. There is no included call value on my phone plan, and I pay for whatever POTS calls I make, however VoIP is used as a primary form of fixed line telecommunications. My phone account is bundled with my ADSL, as line rental is the same or similar across all telco's, and I get a $10/month saving by combining the two.

    -ADSL: iPrimus. Telstra are the only ADSL2 DSLAM provider on my exchange. iPrimus (at the time) presented the best value internet by reselling Telstra-wholesales service.

    -VoIP: FaktorTel. I signed up for this via one of their Whirlpool promotional codes. Using their Whirlpool plan, they presented the cheapest call rates. There’s no included value on the plan, however fixed line phone use is minimal, and only used to dial local and national numbers.

    -Mobile: Vodafone (unfortunately). My wife and the vast majority of my family use(d) either Vodafone or Three for their mobile service. Vodafone allows unlimited free calls to either of these networks, and a sufficient credit allowance for other calls. Again, using a promotional code I was able to score an additional 12GB of data on my account for the first 12 months. Unfortunately Vodafone's service fell apart not long after I signed up with them :(

    I use neither pay TV (channelBT all the way baby), or mobile internet (other than on my phone) - so don't bother with either of these services.

    My accounts may be strewn over a handful of providers, but there’s nothing of the above that I don’t use, and there’s very little paid for that isn’t utilized.

    I got my brother to sign up to a crappy Nokia E5 because he doesn't care what phone he as, He also got a 1gb usb modem. So all up its on a $29 cap with Vodafone. Its really good.

    He doesn't have net at his house and was nagging me for a month and then i saw this deal pop up from vodafone!

    Plus he was on a $49 plan, never used his phone. So the $29 is even more attractive. He hasn't used the cap much. Been monitoring it everyday as most calls are to Vodafone or 3 which is free

    This i think where bundles work:) Since he has internet now and cheaper plan for 24months..

    I'm not too sure whether telstra requires you to recontract when going from one bundle to another. Though i have spoken to many people who have experienced this when changing from one bundle to another while in contract.

    FYI telstra changed the way it processes bundle changes some months ago which is probably the reason for these occurances. As far as I'm aware you are not required to recontract when changing bundles

    Most of the budles involve Internet/phone, where all i want is a phoneline to connect to the internet, I will never make a call from it. Not worth my time. Bring on NBN where (I hope) i can just get the internet without the phone line... I i know i can get Naked ADSL, but its difficult to set up and doesnt really work out cheaper than hooking up a phone line.

    Been pretty happy with Optus and their latest bundle 'Fusion' deals. For $99 a month I receive 500GB in data allowance for our broadband cable plan, unlimited national calls for my (landline-bound) parents and included line rental. For our family it works brilliantly - young adults have an endless quota of data, older adults have an endless quota of calls.

    AFAIK iinet only makes you sign a 24 month contract if you want a discount on their hardware - ie a discount on a modem/router. I know of many people signed up to iinet bundles on a month to month basis.

    Exetel offer bundles, without the free-call scam, whereby you bundle your MOBILE on a standard Cap plan, and get a discount off your ADSL. The mobile is not contracted, and the ADSL is a 12 month contract not 24 months. Much cheaper than Optus, Telstra and iinet too!

    I found it interesting that the article specifically mentioned Internode's bundling plans in the second para, then started the third para with "The biggest issue with bundling deals is that they invariably require you to sign up for a 24-month contract."

    Internode bundles are all available on month-to-month. You can agree to a 24 month contract to reduce the setup fee, but you're not *required* to sign a long term contract.

    MY ADSL IS WITH TELSRA ON A 24 MONTH CONTRACT WITH HOME PHONE BUNDLE AFTER DISCOUNTS I PAY $40 A MONTH FOR MY PC WELL I KNOW YOU DONT GET MUCH FOR $40 BUT IF YOU ARE A TIGHT BUDGET IT IS BETTER THAN NOTHING.

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