ATandT, T-Mobile Deal Hurts Carriers' Customer Service Scores: Report
AT&T and T-Mobile customers reported being the least happy of all wireless subscribers. Sprint was the only big-four carrier to have its score increase in an ACSI survey.Has AT&T's proposed $39 billion purchase of T-Mobile already soured some T-Mobile customers to their carrier? A new survey from the American Customer Satisfaction Index (ACSI) found AT&T and T-Mobile customers to be the least satisfied customers in the mobile industry.
T-Mobile's score fell from 2010's 73-which had tied it with Verizon Wireless and put it ahead of Sprint and AT&T-to 70, putting it below all of its larger competitors, except AT&T. Down from 69 last year, AT&T scored a 66-its worst rating since 2006, the year before it began offering the Apple iPhone.Verizon's service ranking also dropped a point, from 73 to 72, but Sprint-which is vehemently fighting AT&T's T-Mobile purchase, which would put nearly 80 percent of the industry market share in the hands of AT&T and Verizon-rose from 70 to 72. Sprint has made customer service an enormous priority since its ratings sunk disastrously following its own merger with Nextel in 2005. During its most recent earnings announcement, CEO Dan Hesse shared that Sprint had been named a J.D. Power 2011 Customer Service Champion-a distinction awarded to 40 U.S. companies-and that its Boost Mobile prepaid brand had received the highest rating in J.D. Power and Associates 2011 Wireless Non-Contract Customer Satisfaction Index Study.
"It is common to find a reduction in customer satisfaction after mergers," ACSI said in a May 17 statement. "It is less common that customer satisfaction drops ahead of a merger. But this is the case for AT&T and T-Mobile, whose proposed merger should be completed in about a year, pending what is expected to be a long regulatory process. Both companies show a large deterioration in customer satisfaction and in customer service."
"In just three years," ASCI added, "Sprint has emerged from 15 points below even the second worst in the category to claim a share of the industry lead. Improved quality of services and aggressive pricing appear to have paid off. The ability of smaller, more local carriers to compete at the national level has been a point of focus as federal regulators such as the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights have investigated the amount of true competition that would remain in an industry dominated by Verizon and AT&T. Whether they really compete with the big boys, the customers of these tiny carriers are the nation's happiest, reports ACSI. Small carriers such as TracFone and U.S. Cellular led the survey, increasing 1 percent to an average score of 77-"far outdistancing the larger companies," said ACSI.
The survey, which polled 8,000 households, additionally found customer satisfaction with mobile phones to have dipped. Motorola, whose score rose from 76 in 2010 to 77 during the first quarter of 2011, was the only manufacturer with an improved score. Nokia fell from 76 to 73, Samsung from 76 to 74 and the combined score of all other device makers fell from 77 to 74. In an April report, Consumer Reports had offered little to cheer T-Mobile customers in the early days of the AT&T announcement. With its survey data finding T-Mobile to offer "meaningfully better" service than AT&T, the consumer watchdog group wrote in an April 11 blog post that it found little to "clearly support the expected pitch from AT&T that the proposed takeover of its smaller competitor will improve service for current customers of both AT&T and T-Mobile."