My thoughts on it are here:Bundling voice, video, data services for a higher ARPU was an obvious, great move when broadband services and advanced digital services were first introducded...... However, the market is moving more towards a lower ARPU for the triple play services. This is especially going to play a big role in future operations. The time of high ARPUs is going, and soon it will be history.
I believe operators have to lower their ARPU estimates from 2010 onward, simply because the customer won't be willing to pay as much. Today operators generate $100+ revenue per month on their triple play services. In 2010 and later, they should be happy if they can reach ARPU of $50. One example is the FTTH service in Holland, where people do not even want to pay more than €50 for their triple play bundle.
Telcos like AT&T and Verizon are actually losing money on triple-play. Think about the fact that they were getting $35 for a phone line and $35 for DSL (averages for consumers 2 years ago). Now they have to upgrade the network to offer TV, which is the least profitable service. And do that for $30.
Install and maintain the network that they will be capping. Install home equipment like ONT and STB. To give it away for $100. Now usually the telcos will add taxes and fees on that to increase their profit. But its the MSO's who are making out. They went from the least profitable service (TV) to the more profitable services of phone and Internet.
With all of the CAPEX for DOCSIS upgrades as well as FTTx and WiMax build-outs, these companies won't be able to lower ARPU for triple play.
The cost of TV content is increasing. Must carry TV channels are now asking for a bite of the pie. You have seen the battle that NFL Network and the other sports networks are having to get carried by the systems -- and to be carried in the most popular packages.
I can see how the MSO's and telcos would have to lower ARPU averages in the face of the economic tsunami we are experiencing, but they won't be offering triple play for $50.
Remember that for the Bells, RGU's include security, cellular, and now tech support. Cablevision rolled out a $350M wi-fi network in NY. The duopoly knows that to keep churn down, they have to get sticky with ubiquitous Internet Access and to get close to a quad-play. Surprisingly, while Verizon has the quad play in my town (Tampa) - FiOS TV, Internet, phone and Cell - that is not the package that they advertise to my house Every Single Day.
The cost of customer acquisition, retention, advertising, tech support, customer care, bad debt, security, upgrades, and maintenance are too high for the triple play ARPU to drop below $99.