Wireless provider satisfaction declining in US

[Fire14]

Satisfaction with Wireless Service Providers Decreasing

Overall satisfaction performance with the USA's wireless service providers has decreased 10% over 2004, the biggest year-over-year change since the study's inception, according to the J.D. Power and Associates 2005 U.S. Wireless Regional Customer Satisfaction Index (CSI) Study.

Since the study was launched in 1995, overall wireless satisfaction performance has fluctuated in a downward trend based on a number of industry changes such as competitive expansion, key regulatory programs and mergers. These forces have made it difficult for carriers to meet customer expectations as wireless service gained mass appeal.

Over the past two years, the industry has experienced two of the largest mergers in its history: Cingular and AT&T Wireless in 2004 and the most recent union between Nextel and Sprint. As past experience has shown, mergers, at least in the short-term, negatively impact customer attitudes and perceptions with their wireless service, creating a sense of confusion and uncertainty. Most affected are those carriers that experience a merger. Nextel and Sprint experience the largest declines compared to their overall satisfaction index ratings in 2004. However, even carriers not involved in mergers are impacted, with most experiencing some decline in overall satisfaction from 2004.

"Given the number of major changes consumers have experienced over the past couple of years, the gap between customer expectations and actual service experience tends to widen as uncertainty from mergers greatly influences consumer perceptions," said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "Case in point is the impact major market dynamics plays in future switching intent. Between 2004 and 2005, there has been a 5 percent increase in the intent to switch wireless carriers in the next 12 months?a reverse from the past two years, where future switching intent remained stable."

The study measures customer satisfaction based on 42 specific service-related measures grouped into six key factors that impact overall wireless carrier performance. These are (in order of importance): call performance and reliability (26%); customer service (17%); service plan options (17%); brand image (14%); cost of service (14%); and billing (12%). Carriers are ranked across six regions in the United States.

T-Mobile performs particularly well in the study, ranking highest in all six regions (including four ties), largely by demonstrating a competitive advantage in service plan options, cost of service and billing. Verizon Wireless also ranks highest in a tie in four regions: Northeast, Mid-Atlantic, North Central and West. The carrier's main strengths are in the call quality and brand image dimensions. U.S. Cellular is the only other provider to rank highest, tying with Verizon and T-Mobile in the North Central region.

Study results by region are:

Northeast Region: T-Mobile and Verizon Wireless rank highest in a tie. T-Mobile performs particularly well in the areas of customer service, service plan options, cost of service and billing. Verizon Wireless' main strength is in call quality.

Mid-Atlantic Region: Verizon Wireless and T-Mobile rank highest in a tie. Verizon Wireless outperforms the competition in call quality and brand image. T-Mobile's strength lies in cost of service.

Southeast Region: T-Mobile ranks highest overall. T-Mobile performs particularly well in customer service, service plan options, cost of service and billing.

North Central Region: This is the most competitive region, with T-Mobile, Verizon Wireless and U.S. Cellular all tied for highest customer satisfaction. T-Mobile leads the region in cost of service, while both Verizon Wireless and U.S. Cellular receive the highest ratings in customer service.

Southwest Region: T-Mobile ranks highest overall, with superior ratings in call quality, service plan options, cost of service and billing.

West Region: Verizon Wireless and T-Mobile rank highest in a tie. Verizon Wireless performs particularly well in call quality and brand image. T-Mobile receives the highest ratings in cost of service.

The 2005 U.S. Wireless Regional CSI Study is based on experiences reported by 24,096 wireless users.

[bobolito]

I still don't understand if T-Mobile is so high up in customer satisfaction, why are their churn levels demonstrating the opposite? You'd think their churn level would be about the same as Verizon.

Now, I believe the reason for a decline in overall satisfaction is not because carriers aren't performing as well as before. Nowadays, wireless networks are far more robust and reliable than they were 2 years ago. They can handle far more callers with better call quality and with stronger signal in more places. That's an overall truth even though isolated areas remain unchanged for the past few years. However, the overall decline in customer satisfaction is primarily because customers are expecting FAR more from their carrier than they did 5 years ago. I remember many people thought of dead spots as a thing you had to live with and they never complained. It was simply normal not to have a signal at home and were happy with just having to go outside to get a signal to make a call. Nowadays, even having a weak signal is a major complaint generator. People pay ETFs simply because they don't have a signal in their bedroom. People expect their wireless coverage to be omniprescent.

Now, maybe these overly demanding expectations have been provoked by the carriers themselves when they advertise to the world that "you can hear me now" no matter where I am and that you can get more bars in more places. People have been educated to expect more from their carrier, but it seems that their expectations have grown a lot faster than what the carriers can offer.

[Matt]

Part of TM's churn levels is the lack of 2-year contracts, but supposedly that is changing next week (for EXISTING customers only) with an option for handset upgrades for a 1-year or 2-year agreement to some customers. All new contracts will have a one-year agreement.

I agree about current consumer expectations.

[Fire14]

Originally Posted by bobolito

Now, I believe the reason for a decline in overall satisfaction is not because carriers aren't performing as well as before. Nowadays, wireless networks are far more robust and reliable than they were 2 years ago. They can handle far more callers with better call quality and with stronger signal in more places. That's an overall truth even though isolated areas remain unchanged for the past few years. However, the overall decline in customer satisfaction is primarily because customers are expecting FAR more from their carrier than they did 5 years ago. I remember many people thought of dead spots as a thing you had to live with and they never complained. It was simply normal not to have a signal at home and were happy with just having to go outside to get a signal to make a call. Nowadays, even having a weak signal is a major complaint generator. People pay ETFs simply because they don't have a signal in their bedroom. People expect their wireless coverage to be omniprescent.

Now, maybe these overly demanding expectations have been provoked by the carriers themselves when they advertise to the world that "you can hear me now" no matter where I am and that you can get more bars in more places. People have been educated to expect more from their carrier, but it seems that their expectations have grown a lot faster than what the carriers can offer.

I agree with your statments bobolito, people are expecting more from there carriers with coverage & don't want dead spots (and some are the NIMBYers, that don't have a clue about how the networks work).
And the Carriers keep advertising how good there networks are with Verizon's "Reliable Network" and Cingular's "Allover Network" they have made people expect alot more out of the carriers.
Hopefully 1 day in the not too distant future we will have the coverage where we need it all the time then the survey's will be able to give more "Satisfactory" ratings from customers, till then, the carriers have there work cut out for them.

[bobolito]

Since the past couple of weeks I've noticed a marked improvement in all the areas I visit around NJ/NYC. Except for the hill down by William Paterson University, I can't find any other places where I would drop calls when driving by. New towers have been turned on and have fixed numerous bad spots.

Here's an example: http://gallery.wirelessadvisor.com/s...id=511#post511

Also, at Valley Rd. and Ratzer Rd. intersection and also at the top of the hill on Preakness Ave. by PCTI, calls used to drop all the time. Those bad spots have been fixed.

I think I am beginning to understand how it works. First they have to create a dead spot by powering down or adjusting neighboring sites and then they add the new cell site. This is why I found an increase in bad spots in recent months and now those bad spots are gone. It was simply Cingular preparing the area to add a new cell site. Now, service has improved to be far better than what it was before the dead spots were created.