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Telco, DBS kicking cable butt in customer satisfaction

Wed, 10/07/2009 - 8:55am
Brian Santo

The prevailing wisdom the past couple of years is that pay-TV companies by necessity must compete on quality, and that’s becoming evident in customer satisfaction numbers. And competition is fierce; telcos and DBS companies consistently topped MSOs in customer satisfaction rankings.

Customer Satisfaction - East Region

Customer polling by J.D. Power also detected evidence that the poor economy is having a deleterious affect on cable operators.

The study found the number of cable customers who subscribe to additional premium channels has declined to 29 percent in 2009, from 32 percent in 2008. The number of customers who buy video-on-demand and pay-per-view services has also moderately declined, as 33 percent reported using VOD (compared with 35 percent in 2008) and 16 percent reported using pay-per-view (compared with 18 percent in 2008).

"It appears the economy has had an impact on the use of additional video services in 2009," said Frank Perazzini, director of telecommunications at J.D. Power and Associates. "However, while there has been some belt-tightening regarding most additional services, DVR usage has risen 22 percentage points to 40 percent this year as more households utilize this tool to shift the view time for their preferred free programming."

Customer Satisfaction - North Central Region

J.D. Power creates a satisfaction index to produce an overall customer satisfaction score. This year the average score was 632 on a 1,000-point scale, an increase of 23 points from 609 in 2008, which was the lowest industry average during the past five years.

"Average time on hold required to resolve a customer's most recent problem has declined 13 percent from 2008 to 9 minutes, 5 seconds this year,” Perazzini wrote. “Additionally, fewer customers are experiencing outages, with 11 percent reporting an outage in 2009, compared with 15 percent in 2008."

Rising satisfaction does not correlate to customer loyalty, however. That is perhaps a function of real competition, Perazzini noted.

Customer Satisfaction - South Region

"The percentage of cable customers affirming their loyalty to their provider has declined to 25 percent in 2009 from 27 percent in 2008,” he said. “Satellite providers have experienced a similar decline, with a loyalty rate of 40 percent in 2009 – a four-percentage-point drop from 2008. Given the current state of the economy, customers generally want to keep their options open, even if they are satisfied with their current provider. To increase loyalty, providers should continue to enhance the service improvements offered this year and remain competitive from a cost and offerings perspective."

J.D. Power divides its rankings by geography in its 2009 U.S. Residential Television Service Satisfaction Study. In every region, AT&T U-verse (where available) and Verizon FiOS outrank their cable competitors. DirecTV consistently outranks all MSOs, and Dish Network frequently does.

For a second consecutive year, AT&T U-verse ranks highest in the West (with an index score of 721) and South (718) regions.

Customer Satisfaction - West Region

In the East, AT&T is followed, in order, by Verizon, DirecTV, Dish, Cox, Cable One, Time Warner Cable, RCN, Comcast, Mediacom and Charter.

In the South, AT&T tops Verizon, DirecTV, Bright House, Insight, Dish, Cox, Cable One, Suddenlink, TWC, Comcast, Charter and Mediacom.  

In the East region, Verizon FiOS ranks highest for a second consecutive year with a score of 714. Next were DirecTV and Dish, then Cablevision, Cox, TWC, RCN, Comcast and Charter.

WOW! ranks highest in the North Central Region (724). It was followed by AT&T, Verizon, DirecTV, Insight, Cox, Dish, Bright House, TWC, Comcast, Charter and Mediacom.

More Broadband Direct 10/07/09:
•  Blog: Despite economy, RCN Metro Optical finding sweet spot
•  Telco, DBS kicking cable butt in customer satisfaction
•  Comcast's digital upgrade continues in Bay area
•  SCTE to develop GIS standards
•  AT&T to expand Internet calling services on iPhone
•  Sprint, Virgin Mobile agree to settle lawsuits
•  Flo TV goes solo
•  Ciena bids $521M for Nortel business units
•  BroadSoft to buy Packet Island
•  Sigma Designs adds new home control chip
•  Sales of digital STBs in North America cool; China heats up
•  Report: Home networks the next opportunity
•  Broadband Briefs for 10/07/09

 

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