Cable Technology Feature Article
Service Provider Satisfaction, Quality Scores Generally Drop, According to Survey
By Gary Kim, Contributing Editor
Video entertainment, wireless and fixed-line telecom service provider quality rankings are flat to negative, according to the latest American Customer Satisfaction Index, a national measure of of customer evaluations of product quality. In fact, cable operators score at the bottom of the index across industries tracked.
Verizon’s FiOS (News - Alert), maintains the number one subscription TV service with a score of 72. AT&T’s U-verse, ranked second in last year’s survey, dropped six percent in 2010 to a score of 68, just behind DirecTV, which gained two percentage points to 69. Satellite provider Dish Network fell six percent to 67.
Satisfaction with all cable providers fell, with the exception of Cox Communications, which held steady at 67. Comcast, Time Warner (News - Alert) Cable, and Charter are in a three way tie at the bottom pf the ACSI rankings with a score of 59.
Customer satisfaction with subscription TV service overall is unchanged at an ACSI score of 66, a year after surging 4.8 percemt to an all-time high, according to by Professor Claes Fornell, Professor of Business Administration at the University of Michigan.
Fixed-line service provider scores also collectively fell, by 2.7 percent to 73. Smaller providers such as Vonage and Frontier saw their quality scored decline three percent to 76.
The large providers were generally flat. Qwest (News - Alert) Communications gained one percent to 73 and Cox Communications (in its capacity as a voice provider) fell three percent to 72. The other major fixed-line providers either declined or are statistically unchanged.
AT&T dropped five percent to 71. Verizon dropped three percent to 71.
CenturyLink is unchanged at 70, while Comcast (News - Alert), in its capacity as a voice provider, was up one percent to 69.
Customer satisfaction with wireless weakened by 1.4 percent to an ACSI score of 71, but is nevertheless much stronger than it was prior to 2010.
Smaller wireless services providers such as TracFone and U.S. Cellular lead the category, up one percent to an ACSI score of 77. Among the big providers, Verizon Wireless dipped one percent to 72. Sprint Nextel also got a 72 score. The difference is that Sprint is rising, while Verizon appears to be dropping.
Sprint’s scores have risen three percent in the most recent year and substantially over the last three years, up 15 percentage points.
T-Mobile USA scores fell four percent to 70, a five-year year low, while AT&T dropped to 66, its worst score since 2006.
A number of trends seem to be playing out, Fornell suggests. For one thing, many customers appear to be on bundled service plans that have exited their promotional periods, leading to higher monthly prices for the services, which Fornell said is contributing to growing dissatisfaction.
“A couple of years ago, a variety of bundling promotions boosted what people saw as value for money, with the advantage of both cost savings and the convenience of getting multiple services through a single provider,” said Fornell. “Now, as many of these promotions have ended, subscribers with bundled services are becoming less satisfied and more concerned about price.”
Customer complaints about picture quality, particularly for high-definition TV channels, have increased as AT&T grapples with bandwidth challenges across several of its telecommunications services, Fornell said.
To be sure, cable operators rarely have performed well on the ACSI. For whatever reason, consumers simply are not as happy with their video services than they are with other services and products, with the exception of satellite and FiOS offerings, which tend to outscore cable every year.
Apparel companies generally scored in the low 80s, for example. Credit unions scored likewise. Consumer electronics firms tended to scored in the mid-80s.Internet retailers and restaurants likewise scored in the low 80s. The worst scores were registered by newspapers, at 66. Cable as an industry scored 67.
As an industry, cable never fares well on ACSI rankings, for whatever reason. As industries, mobile tends to score better than fixed line, and both of those industries rank about in the middle of the ACSI ratings, in most years. Airlines normally score worse than telecommunications services, and about the same as cable, in most years.
But individual company rankings within each category can vary a bit. Sprint seems to be steadily improving. For all its branding as the "quality" mobile network, Verizon only managed to tie Sprint's score in 2010, for example.
To the extent that satisfaction scores are flat to dropping, and that higher prices for bundles seem to be a factor, we might see quite a bit of oscillation in scores over the next couple of years. More significantly, we might see higher churn at most firms offering triple-play services. It does not seem to be an accident that firms such as Dish Network now are offering value priced packages, for example.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.
Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Jennifer Russell