US consumers unimpressed by ISPs

Warc, 27 May 2014

ANN ARBOR, MI: In an increasingly fragmented communications market, American shoppers are currently least satisfied with pay-TV platforms and their internet service providers.

The American Customer Satisfaction Index (ACSI) assessed consumer sentiment regarding internet service providers (ISPs), subscription TV services, fixed-line and wireless telephone services, computer software makers and cellphones.

It found that the first two of these categories were the worst-performing industries among the 43 it tracked.

More specifically, ISPs registered a score of 63 on a 100-point scale. Subscription TV was only slightly better off, on 65. Both industries had fallen from the levels recorded last year, and were down by 3.1% and 4.4% in turn.

By contrast, satisfaction with cellphones had risen by 2.6% to 78, while wireless phone services remained steady on 72, just behind the fixed-line alternative on 73.

"The internet has been a disruptor for many industries, and subscription TV and ISPs are no exception," said Claes Fornell, ASCI chairman and founder.

"Over-the-top video services, like Netflix and Hulu, threaten subscription-TV providers and also put pressure on ISP network infrastructure," he explained.

"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."

Customer satisfaction was deteriorating for all of the largest pay-TV providers, with Comcast and Time Warner Cable, which are planning to merge, suffering most, as the former was down by 5% to 60, and the latter logged a 7% dip to 56.

These two operators were also bottom of the rankings for ISPs, with customers rating their internet services even lower than their TV services. Comcast fell by 8% to 57 in this area, with Time Warner Cable down by 14% to 54.

David VanAmburg, of the ACSI, doubted the merger would improve satisfaction levels. "ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term," he said. "It's hard to see how combining two negatives will be a positive for consumers."

Customer satisfaction with cellphones had risen in part because of the uptake of smartphones, but that trend was not mirrored by the figures for wireless service providers, as ACSI noted that increasing data usage had resulted in higher consumer costs and overloaded networks.

Data sourced from ACSI; additional content by Warc staff