Consumers
would prefer to bundle communications services with telecommunication companies by
a 2 to 1 margin to cable companies if given the choice, according to the second annual
Telecom-Cable Industry Satisfaction Study from CFI
Group. However, cable companies still provide bundled communications to twice
as many consumers surveyed as do telecom companies.

The survey of over 1,200 households, which examined customer satisfaction for video,
broadband Internet access, and wireless communications using the methodology of the
University of Michigan’s American Customer Satisfaction Index, found that customer
satisfaction provides telecom companies with a competitive advantage. As the telecoms
roll out high-speed fiber services across their networks, they will be able to challenge
cable company dominance in bundles, high speed Internet and video.

“The cable companies are asleep at the wheel if they don’t see the threat from the
telecoms,” said Phil Doriot, program director for CFI Group. “But the network upgrades
aren’t going to happen overnight, so cable companies still have the opportunity to
improve their customer service and cover their Achilles heel.”

The study identified high rates and poor customer service as the two biggest reasons
customers would consider leaving a cable provider of communications bundles. For telecom
companies, customers cite the need for faster access as a primary reason for switching.
Video services like AT&T’s U-Verse IPTV and Verizon’s FiOS are beginning to make their
mark, and 2% of survey respondents are already using video services from a telecom
company.

“Consumers stand to benefit most from the battle between cable and telecom,” said
Doriot. “Telecoms have no choice but to upgrade their systems to offer video and faster
Internet because they are losing customers to cable. That should bring more choice
to the marketplace, stem the price hikes, and raise the satisfaction bar for the whole
industry.”

Telecom companies own national wireless carriers, giving them another potential advantage
in the battle of bundled services. Only 8 percent of surveyed consumers have bundles
that include wireless telephone, and more consumers are dropping landlines altogether
in favor of wireless telephony. The study suggests that this presents an opportunity
for telecoms and another challenge for cable companies.

“Without a wireless play, cable companies aren’t future-proofing their bundles, but
new technologies like WiMax might change the game,” said Doriot.

Though telecom companies generally enjoy better satisfaction ratings than cable companies,
churn may be the biggest issue for wireless carriers. According to CFI Group’s research,
the top reasons customers give for switching carriers are better rates, better plans,
and better coverage and reliability.

The full report is available at no charge at http://www.cfigroup.com.

Here is the original:
Second Annual Telecom-Cable Industry Satisfaction Study