Bundling Impacts in Spanish Telecommunications Market
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Bundling is a pervasive strategy in telecommunications markets. Due to the great success obtained at Spanish Telco market, this article analyzes the impacts of the introduction of convergent bundling on that market. This commercial strategy has caused major changes in the market, both from the point of view of demand and its own structure. From the demand-side, we analyze how product bundling has produced a substantial reduction on effective prices in the sector, and by means of technological diffusion models, we show that bundling is the main factor of Fixed Broadband development, along with FTTH networks deployments, in contrast with stand-alone product marketing scenarios. Pay TV inclusion and hard-bundling strategies at communications packages has motivated the greatest growth of this product in the history of this market. Regarding market structure, the introduction of convergent bundling has led to a consolidation in the market, increasing the concentration around the main convergent players
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