IDC Names Cox as Best Bet for Strongest Competitor in U.S. Multiplay Marketplace

FRAMINGHAM, MA – JUNE 26, 2006 – Competition in the U.S. consumer communications marketplace is red hot as telephone companies and cable TV companies aggressively compete with full service – voice, broadband, video – offerings. Service providers in both industries are committed to bundled service packages as a way to grow their share of residential spending. The beauty of bundled service offerings for providers is their ability to reduce customer churn and increase average revenue per user (ARPU). Based on current position and market momentum, IDC believes Cox is the best-positioned service provider in the U.S. multiplay marketplace.

Top cable providers such as Cablevision, Charter, Comcast, Cox, and Time Warner Cable hold a commanding position in the multiplay marketplace. However, telephone companies such as AT&T, BellSouth, Embarq, Qwest, and Verizon are fighting back with attractive bundles and innovative service integration strategies. IDC predicts that telephone companies will close the competition gap over the next five years. While Cox prevails as the best-positioned service provider overall, IDC believes AT&T is the best-positioned telephone company in the U.S. bundled services competitive landscape.

According to IDC research, telephone companies are in a unique position to leverage their existing voice relationships to add broadband, video, and wireless in an integrated package. Based on earlier studies, IDC believes broadband is the anchor to the existing bundle and the key ingredient to offering next-generation bundles and a full-featured product portfolio. Ultimately, service providers will offer a quadruple play of voice, video, broadband, and wireless services. These foundation service offerings are essential to success, but adding services to existing customer packages is just the beginning, according to IDC analysis.

"Bundled service offerings and particularly the triple play are the key to a strong competitive position in today's communications marketplace," says Matt Davis, director of IDC's Consumer Multiplay Services. "However, service providers that rely solely on these basic services will find themselves with no alternative but to compete on price. Multiple service offerings incorporating broadband-delivered video, online gaming, audio, flexible IP-based voice integration, unified messaging, and a host of other applications will lock in customer loyalty and lure customers to alternative providers," forecasts Davis.

This IDC study, U.S. Multiplay Bundled Services 2006 Service Provider Analysis (IDC # 201727), examines penetration rates, product and service breadth, technology choices, partnerships and scale of the top 10 U.S. service providers in the field of bundled service delivery. Applying an industry-first methodology, IDC analyzes each provider's current position and market momentum in the multiplay arena. The communications service providers featured in this study include AT&T, BellSouth, Cablevision, Charter, Comcast, Cox, Embarq, Qwest, Time Warner Cable, and Verizon.

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