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Just as the legal slapfest between Verizon and AT&T (NYSE: T) was put to rest in court, consumers rendered their own verdict, consumers have rendered their verdict -- the latest Consumer Reports customer satisfaction survey of wireless carriers ranks Verizon first and AT&T last.
The ratings are based on more than 54,000 responses about contract and prepaid services from ConsumerReports subscribers, Donato Vaccaro, associate director of survey research at Consumer Reports, told CRM Buyer.
T-Mobile came out second to Verizon Wireless in the survey, while Sprint (NYSE: S), which took last place in 2008, is now third.
Getting to Vox Populi
Consumer Reports subscribers in 16 cities were selected at random for the survey. The cities include Atlanta, Boston, Chicago, Detroit, Las Vegas, Los Angeles and Miami. The were asked to name their carrier and answer a series of questions.
"We had to have a sufficient number of respondents in each city to report on the provider," Vaccaro explained.
About 3,200 of the more than 54,000 respondents had prepaid services. The survey was conducted in September.
Findings of the Survey
Regardless of which company they use, a lot of people are not entirely happy with their wireless carriers, the survey found. About 54 percent said they were completely satisfied or very satisfied with their cellphone service, meaning 46 percent were not. That compares poorly with most other services Consumer Reports rates, the organization said.
Almost two-thirds of respondents had at least one major complaint about service.
The biggest problem respondents had was the high cost of cellular service. About one in five readers cited this as their top complaint, far more than for any other issue.
Texting and data usage is up -- about 70 percent of respondents said they sent and received text messages, compared to 55 percent in 2007. About 40 percent of respondents said they accessed the Internet with their cellphone, compared to 23 percent in 2007. About 19 percent used Web-based cellphone applications.
For the first time, Consumer Reports asked readers about their experiences with text messaging and Web surfing this year. Only 24 percent rated their experience in these areas as excellent.
While Verizon Wireless leads the pack in customer satisfaction, its prices also generally run high. T-Mobile came in second to Verizon Wireless in customer satisfaction, and offers lower prices for similar types of services. Consumer Reports recommended buyers look at T-Mobile and other carriers in cities where they have fared particularly well, as an alternative to Verizon.
However, the T-Mobile results may not be quite up-to-date. The survey was conducted before the Sidekick crash, a high-profile technical foul-up in October that impacted thousands of T-Mobile Sidekick users.
Sprint fell down because of customer service, the survey found, although the company has been claiming its customer service has improved over the past year. AT&T's main weakness was voice connectivity -- the ease with which people could place calls free of static and without being dropped. However, it also scored below average in every attribute except Web access and texting, the survey found.
The iPhone's a Mixed Blessing
Strong demand for the Apple (Nasdaq: AAPL) iPhone -- for which AT&T is the only U.S. carrier -- may be one of the causes of the telecom's problems. "The crush of all the e-mailing, Web surfing and other data-heavy activity from the iPhone's dizzying 100,00 available software applications has heavily strained the network and may have contributed to AT&T's relatively low satisfaction scores," the customer satisfaction survey report stated.
This year, iPhone users will likely download about 1 billion apps in the United States alone, according to the Yankee Group.
"iPhone users certainly use data services more heavily than other users," AT&T spokesperson Mark Siegel told CRM Buyer. However, other smartphones also contribute to heavy data usage, and AT&T has a wide range of these devices.
"We have twice as many smartphones as Verizon, and our data traffic is the highest in the industry," Siegel pointed out. "It increased 5,000 percent in the past three years."
The downside of that statistic is the poor service resulting from the heavy demand. The problem is worse in cities with many iPhone users, Consumer Reports said. AT&T is working to up capacity in tech-hip cities like San Francisco, New York and Boston, it added.
AT&T's difficulties in keeping up with bandwidth demand have led analysts to suggest Apple sign up a second U.S. wireless carrier for the iPhone, and Verizon is often looked at as an apt candidate. T-Mobile may also be an alternative, since the technology its network uses is more similar to AT&T's than Verizon's is.
To remedy the situation, AT&T spending about $18 billion this year on its wireless and wireline networks. The carrier is also putting a lot of other work into improving its wireless service.
"Billions of dollars are going to our mobile networks," Siegel said. "We're in the process of adding HSPA 7.2, which will effectively double theoretical maximum download speeds on our 3G network; we're adding backhaul to thousands of cell sites; we're adding 2,000 cell sites to boost coverage; and we're rolling out the 850MHz spectrum, which should improve coverage inside buildings."
Also, the reports of dropped calls sound worse than they really are, Siegel contended. "Our dropped call rate for 3G networks is only about 1 percent," he pointed out. "Not perfect, but very good, and we're seeing tangible progress. We'll serve as a blueprint for other carriers who may begin to have the number of smartphones on their networks that we have."
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