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.


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