[BETA] Fortnightly

The supplier that bundles energy and telecom services into a single, low bill will win out, say residential customers. Will it be the electric company?

The increasingly busy lifestyle Americans lead could play into the hands of energy suppliers able to ease that burden, according to the findings of a national survey.

Consulting firm PHB Hagler Bailly found that 45 percent of residential customers would consider their energy company as a supplier of telephone service. Other than price - the primary motivator for customers to consider bundled energy and telecom services - customers said they would be swayed by a single point of contact and bill.

"What this survey is saying is there is a residual market for energy companies that have a reasonably good reputation to potentially exploit that by selling telecommunications services," explains Dr. Joe Kraemer, leader of PHB Hagler Bailly's telecommunications consulting practice. In effect, the electric company would act as an agent, negotiating wholesale rates with telecom suppliers and reselling the services to its customers.

So do the telecommunications companies see energy suppliers as a potential threat?

"In terms of local phone service ¼ we have not seen any competition to speak of from energy companies, although, of course, they have lines going into peoples' homes," says Mike Pruyn, director of public relations for AT&T.

"It's been difficult enough to enter the local phone market. We've spent the last several years trying," adds Pruyn. He speculates that issues related to deregulation and Y2K preparations have kept energy companies from looking seriously at entering the telecom market. "But we welcome them, of course. The more competition the better."

Rather than viewing utilities as a threat, telecom companies see them as yet another possible entrant in an increasingly competitive market, according to Eileen Gaffen, Sprint spokeswoman.

"There are over 400 long-distance providers in the U.S. today, so the utilities would be coming into that competitive marketplace," says Gaffen.

But do customers really care which company provides their energy and phone services?

Gaffen notes that while Sprint surveys find customers are most motivated by price and value, they also rank customer service highly. She says, "I think customers should look really closely at who's providing their [telecom] service, how much experience they have in the marketplace - that it's not just [like] the utility [service] of turning on and off a light switch, that's there's more involved to your phone service than just picking up the phone and getting the dial tone.

"As Kraemer notes, however, customer preferences still boil down to price. He sums up the prevailing attitude: "If you put together a bundle and it's convenient, make me a deal, then you've got my business."

Regina R. Johnson is managing editor of Public Utilities Fortnightly.

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