ACSI: Subscription TV and ISPs Plummet, Cell Phone Satisfaction Climbs

  • ACSI
ANN ARBOR, MI – Subscription TV and Internet service providers (ISPs) sink to the bottom of the American Customer Satisfaction Index (ACSI) in its annual measure of communications industries. According to the latest ACSI results, ISPs drop 3.1 percent to an ACSI score of 63 on a 100-point scale, while subscription TV falls 4.4 percent 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 percent to 78 and wireless phone service remains at 72.

ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States.

Internet as Disruptor
“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 U.S. consumers.

Bad Customer Satisfaction News for Subscription TV
Customer satisfaction is deteriorating for all of the largest pay TV providers. Viewers are much more dissatisfied with cable TV service than fiber optic and satellite service (60 vs. 68). Though both companies drop in customer satisfaction, DIRECTV (-4 percent) and AT&T (-3 percent) 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 percent to 63).

Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5 percent to 60, while Time Warner registers the biggest loss and plunges 7 percent 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.”

ISPs 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. Customer satisfaction with ISPs drops 3.1 percent to 63, the lowest score in the Index.

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 percent fall to 64. Customers rate Comcast (-8 percent to 57) and Time Warner Cable (-14 percent to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.

Cell Phone Satisfaction Rises

Customer satisfaction with cell phones is up for a second straight year, rising 2.6 percent to a new all-time high ACSI score of 78. Steady growth in the use of smartphones, which have much higher levels of customer satisfaction, helps drive the overall industry gain. However, as data usage increases, costs to access overloaded networks are high, leaving customer satisfaction with wireless service providers stagnant at an ACSI score of 72.

Only the Most Satisfied Fixed-Line Phone Customers Remain
Customer satisfaction with fixed-line telephone service dips 1.4 percent 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.

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