Telecom companies have diversified their services beyond just connectivity, selling gadgets and offering perks to remain competitive. A survey of 5,000 people across the UK, France, Germany, Italy, and Spain indicates that consumers are willing to pay extra for their telecom provider to manage all their subscriptions through a centralised hub.
58% of respondents expressed a desire for a unified service to manage and pay for all subscriptions via a single bill, with 46% preferring their mobile provider and 36% their broadband provider. In contrast, only 17% trusted their TV provider, and a mere 6% preferred social media firms for this role. Moreover, 39% of consumers would switch providers for a “super bundle,” and 38% would pay more if popular subscriptions were included.
Currently, many telcos offer bundles with video, sports, and music streaming services, and some also include cloud gaming, antivirus, and fitness subscriptions. Features consumers desire in such a hub include the ability to pause subscriptions (45%), change subscription duration (34%), switch between subscription tiers (22%), and compare prices across platforms (32%).
Optus customers already benefit from a content hub called SubHub, launched in 2021, offering access to various streaming services, Microsoft 365, inkl, and MasterClass. An independent app, Seasons, provides a similar service, helping users manage streaming subscriptions and suggesting optimal times to unsubscribe.
Consumer awareness of subscription spending is rising. Research from Citizens Advice found that 13 million UK consumers accidentally took out subscriptions in the past year, with £688 million spent on unused services due to auto-renewals, forgotten cancellations, or misunderstood purchases. A unified billing and subscription management service could help mitigate these issues.
Streaming providers face rising costs due to new regulations, such as Canada’s requirement for platforms to invest 5% of revenues in local content and France’s tax on music streaming platforms. Despite these costs, consumer retention remains high, with 94% of French subscribers maintaining their music streaming services despite the new tax.
As market saturation and spending limits challenge subscription growth—60% would sign up for more subscriptions if affordable, and 42% have canceled due to price hikes—subscription providers seek ways to retain customers. Partnering with telcos could provide access to a larger customer base less likely to churn if bundled with multiple subscriptions. However, some subscription companies might prefer to stay independent to avoid conflicts of interest with telcos offering competing services.
With the pressure on digital service providers to turn a profit, telcos can aid in customer retention. A robust billing and settlements system is essential for managing payments between telcos and multiple subscription providers. TM Forum Open APIs and the Open Digital Architecture (ODA) could standardise this integration, ensuring compatibility and smooth customer experience. For telcos aiming to broaden their digital services, this could be a significant step forward.
The integration of a centralised content hub by telcos to manage subscriptions could be beneficial for both telecom providers and consumers. While it presents a promising opportunity for telcos to enhance customer satisfaction and retention, streaming providers may also find value in partnerships, despite potential conflicts of interest. The move towards such integrated services highlights the evolving landscape of digital consumption and the increasing demand for simplified management of multiple subscriptions.
Cerillion plc (LON:CER) is a leading provider of billing, charging and customer management systems with more than 20 years’ experience delivering its solutions across a broad range of industries including the telecommunications, finance, utilities and transportation sectors.
