Customer Satisfaction With ISPs, Pay TV the Lowest of Any Industry

By Michelle Maisto  |  Posted 2014-05-20

Customer Satisfaction With ISPs, Pay TV the Lowest of Any Industry

There are two major stories in the latest American Customer Satisfaction Index (ACSI), released May 20. The first is that smartphone owners have for the first time given Samsung a higher satisfaction rating than Apple.

The second, particularly notable as the number of merger proposals in the federal government's inbox increases, is that customer satisfaction with subscription TV and Internet service providers (ISPs) has sunk to a new low. So low, said the report, that these industries are the worst performing of the 43 industries the ACSI tracks.

Samsung Tops Apple in Customer Satisfaction

That first story is more happy news for the company that sells more smartphones and mobile phones worldwide than any of its competitors. The ACSI points out that while in the United States Apple sells "nearly twice the number of smartphones" as its nearest competitor, "Samsung now comes out on top in one critical metric—customer satisfaction."

While last year customers gave Samsung a 76 out of 100 to Apple's 81, this year Samsung's score rose to an 81, while Apple's fell to 79.

"This is the second year of improvement for Samsung, which was near the bottom of the industry at 71 in 2012, but now leads all manufacturers," said the report. "By contrast, Apple declines for a second straight year, slipping 2% to 79, but still maintaining a slim lead over Motorola Mobility and Nokia (now Microsoft), both at 77."

Nokia's score of 77 was up 1 point from last year, HTC grew its score by 3 points to 75, and BlackBerry improved its score, jumping from a 69 in 2013 to 74 in 2014. BlackBerry tied with Samsung's 7 percent improvement, the highest increase among those tracked.

Overall, customer satisfaction with the mobile phone experience increased—sentiment around the ease of sending or receiving messages, the size of displays, the quality of audio and video, and the ease of navigation all improved. Scoring around actually talking on a mobile phone was static, while ratings around battery life were rather poor, which the ACSI chalks up to people now using intense amounts of data, which uses battery life more quickly than talking and texting.  

ISPs and Pay TV

Customer satisfaction with ISPs fell by 3.1 percent year over year, the ACSI found, while subscription TV scores fell by 4.4 percent.

Specifically, Time Warner Cable (TWC) received the lowest score of any subscription television service, falling by 7 percent to 56 out of 100.

Comcast and Charter Communications, falling 5 and 6 percent, respectively, each scored a 60. Dish, down 4 percent, received a score of 67. Verizon FiOS, down 7 percent, scored a 68. And AT&T U-Verse, down 3 percent, scored a 69, tying it with DirecTV, which was down 4 percent from last year.

Customer Satisfaction With ISPs, Pay TV the Lowest of Any Industry

Satisfaction with the industry paled beside other types of household services, said the report; utilities, for example, averaged a 76 and fixed-line telephone service a 73.

"High prices, poor reliability and declining customer service are to blame for low customer satisfaction with pay TV services," states the report. "The cost of subscription TV has been rising 6 percent per year on average—four times the rate of inflation."

Customers have new choices, though, in services from companies such as Netflix and Amazon; paired with service and pricing complaints, the industry saw its "first-ever net loss of television service subscribers for the full year in 2013," said the ACSI.

In regard to ISPs, TWC again showed the most precipitous drop, declining 14 percent from 63 in 2013 to 54 this year.

Comcast fell 8 percent to 57, while Charter and Cox each fell 6 percent to scores of 61 and 64, respectively. Verizon FiOS and AT&T U-Verse managed to remain static, with scores of 71 and 65, respectively.

"Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories. Still, it's a concern whenever two poor-performing service providers combine operations," ACSI Director David VanAmburg said in a statement.

"ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term," VanAmburg continued. "It's hard to see how combining two negatives will be a positive for customers."

The only areas where customers found the benchmarks of their ISP experience to have improved were the speed of data transfers and the quality of video streaming. Satisfaction fell in areas including the ability to keep service interruptions to a minimum, the ease of understanding bills, the quality of all non-video services, performance during peak hours and call center experiences.

Nearly three-quarters of all U.S. households now have broadband Internet connections, which is more than the number with landline telephones, said the report. As the number of Internet users increases, however, "Customer satisfaction with the service retreats."


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