Telcos trump pay-TV in US satisfaction index
May 20, 2014
Subscription TV and Internet service providers (ISPs) sink to the bottom of the American Customer Satisfaction Index in its annual measure of communications industries. According to the latest ACSI results, ISPs drop 3.1 per cent to an ACSI score of 63 on a 100-point scale, while subscription TV falls 4.4 per cent to 65. These industries, which include many of the same companies, are the worst performing among 43 tracked by the ACSI. Meanwhile, customer satisfaction with cell phones improves 2.6 per cent to 78 and wireless phone service remains at 72.
“The Internet has been a disruptor for many industries, and subscription TV and ISPs are no exception,” says Claes Fornell, ACSI Chairman and founder. “Over-the-top video services, like Netflix and Hulu, threaten subscription TV providers and also put pressure on ISP network infrastructure. Customers question the value proposition of both, as consumers pay for more than they need in terms of subscription TV and get less than they want in terms of Internet speeds and reliability.”
The ACSI report includes the annual measure of ISPs, subscription TV service, fixed-line and wireless telephone service, computer software and cell phones, as well as detailed findings for the top-selling smartphone brands available to US consumers.
Customer satisfaction is deteriorating for all of the largest pay-TV providers. Viewers are much more dissatisfied with cable TV service than fibre optic and satellite service (60 vs. 68). Though both companies drop in customer satisfaction, DirecTV (-4 per cent) and AT&T (-3 per cent) are tied for the lead with ACSI scores of 69. Verizon Communications FiOS (68) and DISH Network (67) follow. DISH Network may be the lowest-scoring satellite TV company, but it is better than the top-scoring cable company, Cox Communications (-3 per cent to 63).
Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5 per cent to 60, while Time Warner registers the biggest loss and plunges 7 per cent to 56, its lowest score to date.
“Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories,” says David VanAmburg, ACSI Director. “Still, it’s a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It’s hard to see how combining two negatives will be a positive for consumers.”
The report also found that Internet Service Providers’ ratings are at rock bottom without much incentive to improve. High prices, slow data transmission and unreliable service drag satisfaction to record lows, as customers have few alternatives beyond the largest Internet service providers.
At an ACSI score of 71,Verizon’s FiOS Internet service continues to lead the category, surpassing AT&T, CenturyLink and the aggregate of other smaller broadband providers, all at 65. Cable-company-controlled ISPs languish at the bottom of the rankings again. Cox Communications is the best of these and stays above the industry average despite a 6 per cent fall to 64. Customers rate Comcast (-8 per cent to 57) and Time Warner Cable (-14 per cent to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.
Among wireless phone providers, Verizon Wireless separates from the pack after climbing 3 per cent to 75. T-Mobile (69), Sprint (68) and AT&T Mobility (68) are tightly grouped behind. As smartphone adoption continues to grow, network demands increase along with costs to the consumer, each contributing to stagnant customer satisfaction.
“Consumers once used their cell phones primarily for talking, whereas now smartphones are becoming lifestyle accessories that we just can’t live without,” says Fornell. “But these powerful devices rely on networks that are still playing catch-up with consumer demand.”
Customer satisfaction with fixed-line telephone service dips 1.4 per cent to an ACSI score of 73, but remains the most satisfying of all types of telecommunications. However, the score is due to shrinking landline usage. As more households abandon fixed-line service for cell phones, the customers that remain tend to be the most satisfied.