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Cable rings up nice numbers in new J.D. Power report

Wed, 07/12/2006 - 7:48am
Jeff Baumgartner, CED

Several major cable operators are earning high marks from telephone customers, according to a new satisfaction ranking report from J.D. Power and Associates.

The study, which measured customer satisfaction of local and long distance telephone services, found that cable operators ranked highest in customer satisfaction in five of six U.S. regions studied.

Cox Communications, which cut its teeth on circuit switched telephone services before ramping up VoIP efforts, set the bar by ranking the highest in three regions: the Northeast, Southwest, and West.

Two MSOs that are offering IP-based phone services also ranked highest in two regions -- Bright House Networks in the Southeast, and Time Warner Cable in the North Central U.S.

Cable operators actually dominated in some regions. In the Northeast, Cox's score of 748 was followed by Time Warner Cable (713), and Cablevision Systems Corp. (675).

Verizon, meanwhile, was the sole traditional telco to rank highest in a region (the Mid-Atlantic) surveyed by J.D. Power.

Part of the satisfaction with cable phone services can be attributed to attractive pricing. According to J.D. Power, customers reported paying an average of $53.59 per month for local and long distance phone service from traditional telcos, and just $42.40 per month on average from cable service providers.

"We're seeing that for the first time customers are most often contacting their all-distance carrier about rates, pricing and features while questions about billing have dropped dramatically, spotlighting how intense competition and simplified rates are changing customer focus," said J.D. Power Executive Director of Telecommunications & Technology Research Steve Kirkeby. "However, the study findings consistently indicate that price alone will not satisfy or retain customers."

In fact, overall customer satisfaction index scores have continued to decline - from 692 (on a 1,000-point scale) in 2005, to 670 in 2006.

J.D. Power noted that cable companies that enter markets with phone service are averaging scores that are more than 30 points higher than the industry as a whole, but their present base of phone customers isn't large enough yet to raise overall satisfaction levels.

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