J.D. Power

Over 25% of Wireless Subscribers Indicate They No Longer Need Wireline

Bernie — Thu, 02 Oct 2008 23:04:39 -0400

According to J.D. Power’s latest U.S. Wireless Contract Regional Customer Satisfaction Index, 27% of current wireless subscribers have replaced their landline with their wireless phone. Of those 27%, 61% have completely disconnected their home landline service. “Wireless service has truly improved to the point where quality and performance are no longer barriers in the decision-making process around switching to exclusive wireless service usage,” says Kirk Parsons, senior director of wireless services at J.D. Power and Associates. It’s important to recognize that these findings are looking at existing wireless customers, and not the population as a whole. Nevertheless it highlights a trend that is probably beginning to sound like a broken record to many – consumers are giving up landlines for wireless. Yadda, yadda, yadda…

J.D. Power: TelcoTV Beats Cable

Bernie — Wed, 01 Oct 2008 21:16:28 -0400

The latest J.D. Power rankings for television service has AT&T U-verse and Verizon FiOS beating cable companies in customer satisfaction. There’s a sense of irony here, because according to J.D. Power, cable companies have been beating phone companies in telephone satisfaction. Payback I guess. AT&T U-verse led the pack, with the highest ratings in three of the four regions, including North Central, West, and South. Verizon FiOS ranked highest in the East region. WOW was the highest rated cable company, finishing second in the North Central region. DirecTV was the highest rated DBS provider, finishing second in the East.

Like the cable companies ratings in voice, telcoTV providers are probably on somewhat of a honeymoon with subscribers. Being the new kids on the block with new features and aggressive promotions tends to leave a “good taste” in the mouth of consumers. These ratings will mean much more after a few more years of competition in many more markets than today.

Cable Creams Telco on Telephone Customer Satisfaction

Bernie — Thu, 11 Sep 2008 01:49:31 -0400

Using the latest J.D. Power ratings for customer satisfaction on phone service as a barometer, cable companies are not only beating telephone companies at their own game, they are crushing them. There has to be some sense of embarrassment on the telco side. Five factors are examined in determining overall satisfaction with the J.D. Power survey. In order of importance, they are: customer service, performance and reliability, cost of service, billing, and offerings and promotions. Cable voice providers rated higher than telcos in every region of the country. TDS Telecom was the highest rated telco, placing second behind Wide Open West, in the North Central Region. Telcos didn’t place any higher than third in the remaining four regions. The two largest telcos, AT&T and Verizon, ranked below the region average in several regions. Other interesting findings of the survey include:

Satisfaction levels among customers who use Web channels for service inquiries are higher than satisfaction levels among customers who use a telephone to call a service center. On average, satisfaction averages 641 on a 1,000-point scale among Web users, compared with 626 for telephone users
Overall satisfaction is higher among customers who bundle two or more services with one provider, compared with customers subscribing to phone service alone
Satisfaction among "triple-play customers" -- those subscribing to telephone, cable and Internet service -- is 23 index points higher than among those customers subscribing to just phone service

I can hear the spin masters now explaining why cable is winning this satisfaction battle. Arguments will be made that cable is on a “honeymoon” with customers because they’re relatively new to the scene and are aggressively competing on price. There is some truth to that, but if there were ever a wakeup call to telcos, this should be it. Cable is beating telco at their own game – handily. We’ve known for some time that it’s easier for cable companies to add voice than for phone companies to add video, perhaps giving them a tangible advantage. It looks like cable is leveraging that advantage to the fullest. I have to admit that I was amazed at how easy it was to switch my phone service to Comcast last year. The technician came in (on time even), and within 30 minutes, had completely siphoned my $90 monthly ARPU contribution to Verizon, and handed an even better monthly ARPU of $140 on a silver platter to Comcast. I was floored by how uneventful the process was and how quickly the switch was made. Give cable their due. They have taken on the challenge of voice service quite competently, and appear to be having great success with it. These J.D. Power results only add to the evidence.

Sprint Trying to Claw Its Way Back

Bernie — Fri, 05 Sep 2008 09:49:17 -0400

The latest J.D. Power rankings on cell phone call quality are out and the findings aren’t terribly surprising, but there are a few caveats. Verizon Wireless rates the best for call quality in the Northeast, Mid-Atlantic, and West regions, and tied with Sprint in the Southwest region. Alltel ranked highest in the Southeast and tied with U.S. Cellular in the North Central regions. Despite the iPhone buzz and success, AT&T didn’t do too well, ranking below average in five out of six regions. As suspected, call quality is an important factor for consumers when choosing a wireless carrier. According to J.D. Power, “among wireless subscribers who say they ‘definitely will’ switch their current wireless provider, problem rates average fifty-one problems per one hundred calls (51 PP100), which is five times higher than problem rates of customers who report they “definitely will not” switch in the next 12 months (9 PP100).”

While Sprint’s ratings are not terribly impressive, they are improving. Sprint is making a concerted effort to address quality and customer service under new CEO Dan Hesse. Properly addressing those issues takes time – a long time. There is a perception issue to overcome. As the sprint connection blog points out, Sprint’s perception problem probably impacts their quality ratings, making it doubly difficult to properly address them. They’ll need to step up their game even more than they already have, because call quality, real or perceived, will be a huge factor in stopping their precipitous fall. “With an increasingly competitive environment and the complexity of services often used in conjunction with cell phones steadily on the rise, carriers that offer superior network quality will improve their likelihood of attracting new customers and will increase customer retention,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. The J.D. Power survey reveals that 14% of current wireless customers “definitely/probably” will switch wireless providers in the next 12 months. That equates to 35 million+ subscribers. How many of that number are current Sprint customers?

J.D. Power Says Cable is Beating Telecom at Their Own Game

Bernie — Wed, 11 Jul 2007 09:33:46 -0400

The latest J.D. Power and Associates 2007 Residential Regional Telephone Customer Satisfaction study, which was released today, does not bode well for telecom carriers. For the first time in history, cable companies lead customer satisfaction rankings for telephone service in all six U.S. regions. Cox is the clear winner, ranking highest in phone service customer satisfaction in the Northeast, Southwest, and West regions. A newcomer to the rankings, WideOpenWest ranked highest in the North Central region.

The study reveals that cable is performing better with bundles as well. Eighty-six percent of cable-based voice subscribers also subscribe to data services from the same provider, while the same holds true for only 36% of telecom based voice subscribers. The study reveals the growing importance of bundling, with "…36% of those who currently bundle reporting they would add even more products or services from their current provider, making the next several years crucial for both telephone and cable companies," said Steve Kirkeby, executive director of telecommunications and technology research at J.D. Power and Associates.

The study confirms the widely known trend that cable is performing quite well with their bundling strategies. The real news here is the gains cable is making in phone customer satisfaction. Past studies reveal decent inroads by cable on telephony satisfaction, but this most recent study suggests that cable is now leading the pack. Quite an impressive feat in such a short amount of time, especially for an industry with significant poor customer service 'baggage.' While it’s too early to declare long term winners, cable clearly has the momentum. The telecom industry will have to get creative, and soon. I suspect that including wireless with bundles will help close the bundling gap, but telecom players have some work to do to regain customer satisfaction rankings for their core service.

Read this J.D. Power press release for more details on the study.