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AT&T, T-Mobile Customer Satisfaction Dive Pre-Merger

The major U.S. carriers, cable companies and satellite companies wont be bragging about these numbers.

Just when you thought customer satisfaction with wireless telephone service couldnt get much lower, a new survey by the American Customer Satisfaction Index (ASCI) shows wireless satisfaction dropped another 1.4 percent in the first quarter of 2011. To be fair, the ASCI score of 71 on a 1-100 scale is actually much stronger than it was before 2010. And despite a flurry of exciting new devices hitting the market, satisfaction with cell phones also dipped slightly, down 1.3 percent to 75. Motorola (+1 percent to 77) outpaced last-place Nokia (-4 percent to 73), whose U.S. market share has contracted.

The top performers in wireless customer service were the little guys. TracFone and U.S. Cellular continue to lead the category, up 1 percent, to an ACSI score of 77. Among the big providers, Verizon Wireless dropped 1 percent for a second straight year, falling to 72. That ties with Sprint Nextel, which continues its upward trend, rising 3 percent following consecutive double-digit gains. In just three years, Sprint has emerged from 15 points below even the second worst in the category to claim a share of the industry lead, ASCI said.

Merger talk hasnt helped AT&T and T-Mobile. T-Mobile fell 4 percent to an ACSI score of 70, matching a 5-year low, while AT&T also dropped 4 percent to 66, its worst score since 2006 the year before the first iPhone took the world by storm.

It is common to find a reduction in customer satisfaction after mergers, but it is rare for customer satisfaction to drop ahead of a merger,” said Claes Fornell, founder of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference.” Assuming the deal is approved, it remains to be seen if a much larger AT&T can regain the strength of its customer relationships.”

As telcos put most of their efforts into wireless, it probably comes as little surprise that wireline service ratings are also down. Overall, fixed-line customer satisfaction fell by 2.7 percent to an ASCI score of 73. The aggregate of smaller local and long distance providers such as Vonage and Frontier also fell 3 percent to a score of 76, but remains ahead of the top two larger companies: Qwest at 73 (+1 percent) and Cox Communications at 72 (-3 percent).

The big boys saw their fixed-line ratings decline or remain unchanged. AT&T drops 5 percent to 71, erasing the gain it earned one year ago and tying Verizon (down 3 percent). CenturyLink is unchanged at 70, and Comcast, although in last place, was up for a second straight year, to 69.

The pay-TV world didnt fare quite as badly, but numbers are still low. Customer satisfaction with subscription TV service was unchanged at an ACSI score of 66, a year after surging nearly 5 percent to an all-time high.  While quality is up, ASCI says higher fees are making it tough for pay-TV operators to gain more ground.

Bundling of services such as phone and Internet access may have been both a blessing and a curse for the industry,” said Fornell.  A couple of years ago, a variety of bundling promotions boosted what people saw as value for money; but now, as many of these promotions have ended, subscribers with bundled services are becoming less satisfied and more concerned about price.”

Verizons FiOS dropped 1 percent in customer service, but is still the industry leader, at 72. DIRECTV is next at 69 (+1 percent), recapturing the satellite lead from DISH Network, which fell a whopping 6 percent. AT&Ts U-verse, Verizons fiber-optic competitor, dropped 6 percent also, to 68.  Customer complaints about picture quality, particularly for HD channels, have increased, as AT&T grapples with bandwidth challenges across several of its telecommunications services.

Cox Communications remains the highest-scoring cable provider (unchanged at 67), well above the other three cable companies. Comcast, Time Warner and Charter Communications all dropped and are tied at the bottom of the industry with ACSI scores of 59.


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