Selling Bundles by Leading With VoIP

IP telephony has long been lost in the shadows of bundled residential services and downplayed in SMB packages — with TV or Internet instead taking center stage. So what in the world were SureWest Communications’ (SURW) strategists thinking when they decided to buck the trend and launch a triple-play offer with VoIP in the leading role?

SureWest said it was the powerful value of VoIP that led it to launch the bundle.

Consumers that commit to a one-year agreement to Digital National Phone get Internet access at up to 3mbps and 78 channels of Digital Basic TV free for the first six months, with the bundle costing only $39.99 per month thereafter. The unlimited local and national calling VoIP service comes with 22 features, including voice mail that can be managed via the Web using the carrier’s Phone Manager feature. After the first six months, users pay $120 per month for the three services combined, not including taxes and fees. For a discounted rate, customers can upgrade their Internet and Digital TV packages. As a bonus offer, SureWest said, the customer also has the option of taking its $10.99 per month HDTV service, or four additional set-top boxes, valued at $5.99 each per month, for 50 percent off for six months.

“SureWest created this promotion to give them a break from their bills for six months while introducing them to our superior services,” said Pete Drozdoff, marketing vice president for SureWest. “We chose this promotion as a way to reach out to the customers in our region during a time when the costs of many things they are purchasing on a regular basis are increasing. Add that into the current state of our economy, and we understand that a lot of hardworking people are going through difficult times.”

This VoIP promotion, which launched in April, is one of the industry’s least expensive triple-play packages. And that six-month promo, SureWest believes, will give it a chance to win over customers.

“We are seeing that our current triple-play customers are satisfied with all three of our services and enjoy the competitive pricing they receive from the bundling of products. In return, they are the customers that tend to stay with us long term,” explained Drozdoff. “We feel this promotion is a great way to introduce our services to new customers. It’s a great deal that we believe will cause them to call in and consider SureWest for their communications services.”

While this VoIP-led triple-play deal grabbed headlines, it is unclear whether leading with VoIP will be an isolated occurrence or a new trend.

However, AT&T Inc. (T) earlier this fall began pushing VoIP in a new U-verse promotion, which seems to be aimed at moving people from older, standalone services to newer services that are part of bundles.

Under the new U-verse promo, which expires Jan. 31, 2009, the cost for each U-verse TV U100, AT&T U-verse High Speed Internet Pro and U-verse Voice Unlimited is $30 per month for 12 months. $30 is the standard monthly rate for the Pro tier and U-verse Voice Unlimited, and subscribers receive a $14 monthly discount on the TV package. Customers still receive the $14 monthly discount if they choose to upgrade their TV package to U200 or higher.

Rolling VoIP into the U-verse bundle is a relatively new direction for AT&T, which this past summer informed interested users, via a brief Web site message, that it no longer was taking new customers for its 4-year-old VoIP-only CallVantage services.