What You Need to Know About Telecom Packages

1. Bundling is big. Bundles combine Internet service, cable TV and often phone service from a single provider and can be a better deal than buying each service separately. Telecommunications companies love them because they boost revenue per customer and lock users into long-term contracts, typically one to two years.

2. But not all bundles are bargains. Add-on fees can quickly turn a cheap bundle into a not-so-hot deal. For example, Time Warner Cable recently advertised digital cable TV with 200-plus channels (HD included) plus speedy 10-megabit-per-second broadband Internet for $75 a month, with free installation. What the ad didn't say, however, was that recording in HD with an HD DVR would cost an additional $18 a month, and a wireless router (if you didn't already have one) would cost an extra $5 per month. Tack on a few more dollars a month in taxes and fees, and that $75 deal could balloon to $100 a month.

3. Size up the competition. The more providers that serve your area, the more likely they'll offer inducements for you to sign up. Plus, many providers save their best deals for the Web. For example, Verizon was recently offering a $20-a-month discount to customers who ordered its FiOS Triple Play bundle online. AT&T was handing out prepaid Visa cards worth up to $350 to residential customers who purchased its U-verse TV or Internet services on its Web site. And Comcast, via its Xfinity brand, was offering $200 Visa cards to new users of its Triple Play bundle.

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4. Don't be afraid to haggle. When your contract ends and it comes time to renew, tell your provider you want the special that's advertised for new customers only -- and threaten to quit if you don't get it. In January, one Kiplinger's editor lowered his cable bill by almost $23 a month by calling the company and announcing he was quitting because his monthly bill was too high.

5. You could go a la carte. Maybe you don't want a land-line phone. Then a triple-play package doesn't make sense for you. Or perhaps you'd rather not pay for 200 cable channels you don't watch. Choose a wireless-phone service and a broadband Internet provider, and then sign up with an online video service to watch movies and TV programs. For $9 a month, Netflix will stream an unlimited number of movies and TV shows directly to your TV or PC via your wireless home network. Or consider services from Amazon, Best Buy, Vudu and others that let you rent individual movies for $1 to $6 per title (see Net Movie Night).

6. Your smart phone just got smarter. Sprint is the first wireless provider to launch fourth-generation, or 4G, data service in the U.S. (AT&T and Verizon Wireless will follow in 2011). With download speeds of up to 6 Mbps, Sprint 4G WiMax rivals home broadband Internet. Sprint customers who own an HTC Evo 4G smart phone ($200; service costs $80 a month with a two-year contract) may use the device as a hot spot to connect up to eight wireless devices, such as a laptop and an iPod Touch, provided they're willing to pay an extra $30 a month. Such 4G service may provide an affordable alternative to slower DSL, which maxes out at about 3 Mbps.