We are used to mobile phone companies offering packages with technology, media, broadband and TV – but soon, it could become commonplace to buy your energy from your phone provider. Many analysts have suggested that energy might be a good step for phone companies wishing to diversify the services they offer, and Amaysim has already taken the plunge. If Telstra do enter the energy market, it could shake things up in a big way.
Why Telcos Want to Bundle
Selling services as a bundle is an attractive prospect for telcos who have the financial ability to offer them. Cross-selling makes the most of a company’s resources and allows them to easily target a wider audience than the two services would be able to reach individually.
Part of the benefit is being able to combine marketing and brand recognition in order to attract customers. People looking for a new energy plan could be convinced to change mobile phone providers, and vice versa.
Brand recognition also crosses over to increase the likelihood that a customer of one service will trust the other. Bundling services means that customers are more likely to stay with a provider, as it becomes more difficult and inconvenient to change providers for more than one service.
NBN will become a requirement by 2020, so it’s a natural and logical time for people to reconsider their utilities providers. Companies who have multiple options to discuss with potential customers will have the advantage in this period of turnover.
Bundles Work for Customers
One way customers can benefit is having the option to get all their household bills in one bundle, with an added discount possible. It makes it easier for customers who don’t like to spend too much time researching, as they can find their household needs in a single location.
There is the obvious convenience and comfort of belonging to a single brand that will be attractive to many people. If that brand is a major company like Telstra, the appearance of quality and trustworthiness naturally transfers to other services they may provide.
Telcos and Energy
In April 2017, Amaysim acquired Click Energy for $120 million. Click Energy is 100% online, which suits Amaysim as an MVNO. Much like the telco, it offers no lock-in contracts, monthly billing and the ability to manage customer accounts online.
While the product they offer is different, both Amaysim and Click Energy have a budget-conscious, customer-focused approach that makes them a good combination. The ability to bundle a low-cost, month-by-month energy plan with a similarly cost effective mobile plan will be attractive to many customers.
Electricity providers are moving towards a bill that has a similar structure to a phone plan, which makes the crossover a logical move. With the combination of services, customers would have the ability to log in to their account and see a range of available services, track their usage and manage their utilities in one place.
Telstra’s Venture into Electricity
Telstra have already acquired some energy assets, but at this stage those assets are mostly being used to cover their own electricity needs. They hold a range of renewable energy sources including solar and wind power.
The move into energy is partially being spurred on by the end of the NBN rollout looming, forcing Telstra to look elsewhere for additional income. While it would be a huge move for Australia’s biggest telco to take on a whole new market, they have the size and the finances to support a new venture. Telstra have access to over 5.1 million households, while the largest energy provider only reaches 4.2 million. Telstra would have the option to either act as a reseller of energy, or to become an outright owner and operator in their own right.
Telstra have made big purchases in solar and wind farms, and have indicated that their battery storage capacity could support the grid in the case of an emergency. Investing in infrastructure to support energy services could be a logical step forward – especially when those investments are being made in renewable energy. Telstra certainly have the funds, the reputation and the structure in place to make an affordable energy package a real incentive for customers.