Many Europeans buy their home telephone service from one company, Internet access from another, mobile-phone service from a third, and cable or satellite television from yet a fourth. The result—a blizzard of monthly bills and customer service channels—leaves many yearning for a simpler arrangement. About 80 percent of European consumers would prefer to buy all of their telephone services and Internet access from a single provider, according to a recent survey of more than 7,000 people in eight countries.¹ Given the option, about 40 percent of consumers would purchase everything, including media services such as television, from a single company.

This appetite for bundled services represents an opportunity for companies (such as cable television operators) that increasingly offer Internet access and telephone services and are eager to attract new customers. Companies (such as traditional telcos) that are keen to hang onto their existing clients could also benefit. Telephone companies face mounting competition, as customers shift to cheaper Internet-based telephone services or to mobile phones. The telcos must seek new sources of revenue to offset a decline in their traditional telephone business.

Customers face a growing number of options for media and phone services, thanks partly to recent technological advances...