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J.D. Power and Associates Reports: O2 Ranks Highest in Satisfying Both Pre-Pay and Contract Mobile Telephone Customers in the UK


June 1, 2006

Incentives and Rewards Programs from Mobile Telephone Service Providers Lead to
Higher Satisfaction

LONDON: — O2 ranks highest in customer satisfaction with mobile telephone service in both the pre-pay and contract service sectors, according to the J.D. Power and Associates 2006 UK Mobile Telephone Customer Satisfaction StudySM released today.

Among pre-pay providers, O2 ranks highest with an overall index score of 738 points on a 1,000-point scale. O2 performs well in all six factors that contribute to overall satisfaction in the segment: image, cost, call quality/coverage, offerings/promotions, handset and customer service. Vodafone (729) follows O2 in the rankings, performing particularly well in image and call quality/coverage. Virgin Mobile (728) ranks third overall and performs well in cost and customer service.

O2 also ranks highest in the contract services sector, with an overall index score of 740 points. Among the seven factors contributing to overall satisfaction in the contract segment, O2 receives the highest ratings in offerings/promotions, cost, call quality/coverage and handset. Orange follows O2 in the segment rankings with 730 points, achieving a particularly high rating in billing.

With improvements recorded in all customer satisfaction factors in both segments, overall satisfaction within the pre-pay sector has increased 8 points (723) from 2005, and satisfaction among contract customers has increased 6 points (729). These increases are driven most significantly by improvements in call quality/coverage in the pre-pay segment and customer service in the contract segment.

The study also finds that more than one-third of customers received some form of incentive or reward from their network provider to encourage loyalty. The most frequent incentive/reward cited by customers was extra call time. Nearly 15 percent of pre-pay customers and 12 percent of contract customers say they were offered extra call time.

“Whether it is offering extra call time, handset upgrades or credits for spending a certain amount, incentives can go a long way in boosting customer satisfaction levels,” said Gunda Lapski, director of European telecommunications and utilities services at J.D. Power and Associates. “Pre-pay providers who offered their customers incentives averaged satisfaction levels of 746 points, while those not offering incentives only averaged 709 points. With contract customers, satisfaction levels, based on the same criteria, averaged 759 compared to 710.”

The study also finds several key mobile phone usage patterns:

* Reflecting increasingly attractive offers by contract providers, 40 percent of mobile users are now on a contract tariff—up from 35 percent in 2005.

* The percentage of customers who own a video phone has increased from 20 percent in 2005 to 40 percent in 2006. However, fewer than 7 percent of customers actually use the video calling feature—down from 11 percent in 2005.

* The average number of weekly calls made by pre-pay customers has risen from 11 in 2005 to 14 in 2006, and the average number of text messages has risen from 26 to 27 in 2006. Among contract customers, calls have increased from 31 in 2005 to 35 in 2006 and text messages have risen from 30 to 32.

* Despite higher usage, monthly expenditures continue to fall. Pre-pay customers pay an average of £19.29 per month in 2006—down from £21.48 in 2005—and contract customers pay £40.44—down from £41.81.

The 2006 UK Mobile Telephone Customer Satisfaction Study is based on 2,200 telephone interviews conducted between March and April 2006 with pre-pay and contract customers of the UK’s leading mobile network providers. The study is in its ninth year.

About J.D. Power and Associates
The European headquarters of J.D. Power and Associates is located in Guildford, UK. With world headquarters in Westlake Village, California, U.S.A., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 290 offices in 38 countries. Sales in 2005 were $6.0 billion. Additional information is available at
Media Relations Contacts:
John Tews
J.D. Power Media Relations
Troy, MI
(248) 312-4119, or cell (248) 321-5109
Lisa Crane
Cohn & Wolfe Media Relations
London WC2H 7LZ
0207 331 5472

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates.


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