Competition Boosts Satisfaction for Wireless Phone Service

As contracts fade in the wireless phone service marketplace, customer satisfaction surges—proof that choice matters in the battle to win over consumers. The industry’s ACSI score climbs 2.8% to 73 this year, with carriers engaging in more competitive price wars.

Compared with other telecom categories where consumers have little choice, the wireless industry shows that when companies fight for customers, good things happen: prices are competitive, service improves, and customer satisfaction is higher. Decades ago, landline phone companies were fully immersed in price wars to win and keep customers. Today, unlimited data and no contracts are hallmarks of the new battleground, and the wireless industry is truly competitive again.

Smaller wireless carriers set the bar with a 3% gain to an ACSI score of 79, followed by prepaid provider TracFone Wireless at 77 (+3%). Likewise, Verizon Wireless and U.S. Cellular climb 4% and 3% each to 74, while Sprint hits an all-time high of 73 (+4%). T-Mobile ties with Sprint and is the only company to move in the opposite direction (-1%). AT&T Mobility is at the bottom of the category (+1% to 72). As new competition arrives from companies like Comcast via its Xfinity Mobile, consumers will have even more options as they increasingly eschew landline in favor of wireless phone service.

ACSI: Wireless Competition Boosts Customer Satisfaction While Pay TV Fades »

Pay TV and ISPs: Dead Even, Dead Last in ACSI

It doesn’t take a lot of imagination to glean that U.S. consumers find little to like about their subscription television or internet service—especially when it is provided via cable. According to customers, internet service providers constitute the bottom of the barrel when it comes to customer satisfaction, and this year pay TV is no better. Both come in dead last among 43 industries in the American Customer Satisfaction Index, and many of the same companies dominate both categories.

While other telecom industries improve in 2017—most notably wireless phone service rises nearly 3% to 73—pay TV slides 1.5% to meet ISPs at 64. And some cable providers are scraping down toward the bottom of the entire Index. Comcast’s Xfinity tumbles 6% to 58, just ahead of Mediacom (56). The best pay TV can offer comes via fiber optic or satellite, as DISH Network, AT&T’s DIRECTV and U-verse, and Verizon’s Fios score in the range of 67 to 71. For internet service, Fios and U-verse also take the top (71 and 69, respectively) with Xfinity at 60, just ahead of several providers who languish in the 50s (Frontier, Windstream, Mediacom, and CenturyLink).

For pay TV, the very real threat of competition has not turned the tide for customer satisfaction. Increasingly, customers are forgoing the poor service they are receiving and switching to streaming services. In the first quarter alone, over half a million subscribers defected from cable and satellite service—the biggest loss in history.

Overall, the ACSI report does not bring good news for broadband and as other options proliferate, cord cutting is unlikely to subside or slow down. As such, the ACSI will be adding measurement of VOD (video on demand) in 2018 to capture the on-demand services of traditional providers, along with coverage of competing stand-alone video streaming services.

ACSI Telecommunications Report 2017 »

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