CFI Study Paints Bright Picture for Telecom in Battle With Cable
NEW YORK - More choices and superior customer satisfaction give Verizon and other traditional telecommunications companies a significant competitive edge over cable companies, according to a survey released this week from the CFI Group.
The CFI Group is one of three organizations that jointly produce the respected American Customer Satisfaction Index, a well-known measure of customer experience.
The CFI study concludes, “Given the customer satisfaction advantage of telecoms and the miserable satisfaction record of cable companies, it seems customers are more eager for an alternative to video than for voice, or at least an alternative to their current cable company.”
That telecom advantage is expected to drive more subscribers to bundled offers from companies like Verizon, the study says.
“Telecom companies have the edge in the future growth of bundled services,” the study says.
Telecom companies offer TV entertainment service both on their own and in partnership with satellite TV, and customers’ satisfaction with telco bundles beats cable by a 69 percent to 63 percent margin. Verizon now serves more than 1.3 million homes with TV service either with the company’s FiOS TV all-fiber service or with DIRECTV.
“This study is an important analysis of trends in the marketplace and customer preferences,” said Virginia Ruesterholz, president of Verizon Telecom. “Today customers have more choices than ever, and the CFI study shows that customers are turning to us based on ultimate satisfaction. That’s what our commitment to good service and great choices is all about.”
For three years, Verizon has been offering packages of voice, Internet and video service, and more recently the company has added its FiOS packages, which use state-of-the-art fiber optics right to the home.
Verizon stands to gain from future bundle subscriptions, the CFI study suggests. Of the 20 percent of U.S. households expected to purchase a services package in the next year, 54 percent are likely to buy them from a telecom company, not from cable.
The study also shows that DSL outperforms cable modem-based Internet services when it comes to customer service. Satisfaction scores for DSL are four points higher than for cable modem, and the likelihood to switch technologies is four points lower than cable modems.
Verizon has introduced packages that include wireless phones. The CFI study shows cable’s effort to counter these through a partnership with Sprint Nextel as unlikely to succeed.
Sprint Nextel has the lowest customer satisfaction numbers in the industry, and the study concludes the partnership is likely to hobble cable’s bundle performance since service quality issues drive purchases in the wireless business as well.
Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers. Verizon Wireless operates America’s most reliable wireless network, serving more than 62 million customers nationwide. Verizon’s Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings customers the benefits of converged communications, information and entertainment services over the nation’s most advanced fiber-optic network. A Dow 30 company, Verizon has a diverse workforce of more than 238,000 and last year generated consolidated operating revenues of more than $88 billion. For more information, visit www.verizon.com.
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