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Does Service Bundling Reduce Churn?

Jeffrey Prince and Shane Greenstein

No 2011-05, Working Papers from Indiana University, Kelley School of Business, Department of Business Economics and Public Policy

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. However, 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.

Keywords: Bundle; Service; Churn; Triple Play; Telecommunications; Cable; Broadband; Telephone; Screen (search for similar items in EconPapers)
JEL-codes: D12 L0 L96 (search for similar items in EconPapers)
Date: 2011-11
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (4)

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Journal Article: Does Service Bundling Reduce Churn? (2014) Downloads
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