Verizon, Cox Rank Tops With Business
Verizon Communications and Cox Communications generally do the best job of delivering wireline data, voice and video services to US businesses, according to the latest report from market research firm J.D. Power.
In its annual study of commercial customer satisfaction with wireline telecom providers, J.D. Power found that both very small firms (companies with up to 19 employees) and small-to-midsized businesses (SMBs) (companies with 20 to 499 employees) ranked Verizon Communications Inc. (NYSE: VZ) the highest.
Improving upon its second-place ranking in last year's survey, Verizon beat out all other major US telcos and cable operators in both categories and almost achieved a hat-trick, coming in a close second among large enterprises (companies with 500 or more employees).
As it did last year, Cox Communications Inc. starred among the big US cable providers, although it didn't quite match last year's stellar performance when it captured top honors in two of the three segments. The third-largest US MSO came in a close second to Verizon in both the very small business and SMB segments, while edging out Verizon for the top spot in the large enterprise category. (See Small Firms Love Cable.)
Unlike last year, none of the other major US cable and telecom providers really distinguished themselves in this year's customer satisfaction rankings. Of the rest, only AT&T Inc. (NYSE: T) managed to score higher than the industry average in any of the three categories, narrowly beating the average index score in the large enterprise arena.
Instead, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Charter Communications Inc. and CenturyLink Inc. (NYSE: CTL) all came in below the industry index average in all three segments. Most notably, TW Cable, which ranked highest in the large enterprise category just last year, tumbled to the bottom of the scale this year, despite its strong growth in commercial services revenues.
In another significant study finding, nearly one in six business customers, or 16%, indicated that they are likely to switch telecom providers in the next 12 months. SMBs showed the greatest propensity to switch, with one in five, or 20%, indicating that they're likely to change providers.
By far, firms cited better pricing from an alternative provider as their top reason to switch, with 73% of respondents choosing this option. Some 30% chose new features of services plans offered, while 29% picked favorable pricing options and 28% selected better/more reliable service performance.
The study also found that both short-term and long-term service outages have markedly dropped since 2011. The average number of short-term data outages (lasting less than five minutes) experienced by customers during the past six months fell by more than 28% during the three-year span, while the average number of long-term outages (more than five minutes) dipped by more than 16%.
Such outages make a big difference in customer retention efforts. The study found that companies experiencing two or more lengthy outages after they purchase services are about three times as likely to change telecom providers as those that don't experience any outages.
— Alan Breznick, Cable/Video Practice Leader, Light Reading