Household strategy deepens with new services, share plans on top of bundles

When Canada's wireless carriers put out new two-year mobile plans after the release of the CRTC's wireless code in June, many of the new rate plans emphasized the savings that could come through household or family sharing plans. Telus Corp.’s “Share Plus” plan, BCE Inc.’s “share plans” and Rogers Communications Inc.’s “Share Everything” plan all allow between four and nine customers to save money on their wireless bills by sharing their data packages. The share plans are a signal that communications providers are reaching deeper into their bundling and whole home strategies, expanding their products, services and specials geared toward the household subscription. New products like smart home security systems or even WiFi-connected cars are in play as shared plans become another way to target groups of subscribers. “Eventually everything will be part of Share Everything. It’s just a matter of when billing systems and consumption will be there,” John Boynton, Rogers’ executive vice-president and chief marketing officer, said in a telephone interview. “For sure, your automobile … will be treated as a device and just join in the bucket. Your refrigerator. Your home monitoring system, everything will be part of it. It’s really the structure that’s the foundation of everything that we’re going to do, going forward,” Boynton said. Shared plans allow more than one customer to share their monthly data plan between a number of devices, which can be owned by different individuals. A family might have two smartphones, a feature phone and a tablet under one shared data plan, to be administered by one responsible account holder. It's a selling feature being added to so-called triple or quad play bundles, where households can receive savings by using the same provider for Internet, home phone, television, or wireless services. Rogers and Bell are now offering customers extra savings if they include a wireless plan, including a shared plan, in a bundle with TV, home phone and Internet services. While Rogers’ shared plan allows customers to add a smartphone for $55 or a tablet for $10, down the road they could add a car for $15, a refrigerator for $2, or home monitoring for $20, Boynton said. “It’ll all be based on the different consumption that those devices have,” he said. Rogers launched its home monitoring service in 2011, and said in late September it had reached a deal with U.S. wireless provider Sprint (owned by Japanese company SoftBank Corp.) to bring Internet-connected cars to Canada. In Alberta, and other areas of the country where Rogers doesn't have a cable network, the company offers a wireless home phone as part of its efforts to get more households subscribing. In the West, the wireless home phone will help the company compete in Telus Corp.'s territory, where that company has a wireline network for TV and home phone services. RBC analyst Drew McReynolds said the targeting of households helps from an administrative perspective and facilitates getting “more devices onto wireless plans,” increasing data consumption and revenues. Providers want as much data consumption as their networks can handle, he said, “which means they’ve got to make it easier for households to connect all these devices up.” Shared plans and bundling also lower churn. Putting services into groups of products and people helps increase the provider's “stickiness” with customers, said MacDougall, MacDougall & MacTier analyst Troy Crandall. It's part of the so-called “quad play” effect, where customers bundle wireless services with Internet, home phone and television for savings. “It almost makes it that there would be more incentive for the entire household to switch rather than just one, and that’s just more difficult and more complicated to do,” he said. BMO Capital Markets analyst Tim Casey said the rise of shared plans is also helping wireless providers target youth. Get them while they're young, while mom and dad are paying, and you may have them for a lifetime. “Five, 10 years ago, handheld devices were not owned by kids in school,” Casey said. “It is an obvious marketing strategy, if mom or dad’s going to pay for it, to offer them some sort of discount or incentive to put them on the same carrier as is already in the house.” Boynton said Rogers' new services and plans are responding to customer demand. “It’s really customers saying, ‘It would be great if I could put all of these things on one plan. The genesis, both in Canada and the U.S., was from the customers up,” he said. “If it’s consumer demand, then you know everybody’s going to do it.” Boynton said Rogers conducted research that showed shared plans are “definitely easier to manage,” and that data usage will average out over several individuals, saving on potential data usage overage charges. For now, it's a formula that's working for the providers, and shared plans are expected to grow as more television viewing happens on different devices and TV is increasingly delivered on a range of platforms, from wireline to wireless. Key to the growth of whole home subscriptions and shared plans will be making content consumption seamless across devices and platforms, McReynolds said. “What drives it, in my view, is just within the home how seamless it is for Internet access and content sharing across all the different devices,” McReynolds said. “As long as the demand is there, then this model to me makes a lot of sense … It’s a more simplified, homogenous, holistic model that to me is kind of inevitable, looking out over 10 to 20 years.” —With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Simon Doyle at sdoyle@thewirereport.ca

Household strategy deepens with new services, share plans on top of bundles

Broadcast | October 10, 2013

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