Abstract

http://ssrn.com/abstract=1966221
 
 

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Does Service Bundling Reduce Churn?


Jeffrey Prince


Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Shane M. Greenstein


Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

April 2013


Abstract:     
We examine whether bundling in telecommunications services reduces churn using a series of large, independent cross sections of household decisions. To identify the effect of bundling, we construct a pseudo-panel dataset and utilize a linear, dynamic panel-data model, supplemented by nearest-neighbor matching. We find bundling does reduce churn for all three “triple-play” services. The effect is only “visible” during times of turbulent demand. We also find evidence that broadband was substituting for pay television in 2009. This analysis highlights that bundling helps with customer retention in service industries, and may play an important role in preserving contracting markets.

Number of Pages in PDF File: 54

Keywords: Bundle, Service, Churn, Triple Play, Telecommunications, Cable, Broadband, Telephone, Screen

JEL Classification: D12, L96

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Date posted: November 30, 2011 ; Last revised: May 13, 2014

Suggested Citation

Prince, Jeffrey and Greenstein, Shane M., Does Service Bundling Reduce Churn? (April 2013). Available at SSRN: http://ssrn.com/abstract=1966221 or http://dx.doi.org/10.2139/ssrn.1966221

Contact Information

Jeffrey Prince (Contact Author)
Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )
Bloomington, IN 47405
United States

Shane M. Greenstein
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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