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Survey: Consumers went big on Internet, video, voice purchases in 2020

While 2020 may have been the year of the COVID-19 pandemic, it was also the year when switching Internet, voice and video providers reached a fever pitch, according to the latest BroadbandNow consumer shopping study.

Drawing from anonymous shopping data collected from its service finder website, BroadbandNow estimated that consumers spent a whopping $118 billion to switch or buy new Internet, phone and TV services last year.

Consumers appeared to be more motivated to find better wireline and wireless data connections in 2020, according to the survey. In wireline, BroadbandNow estimated that 38 million households signed up for new Internet service in 2020, up 46% compared to 2019 levels. The increase was driven by demand for home broadband service during the COVID-19 pandemic, as well as increased interest in higher-speed fiber and other Gigabit service offerings.

The survey also estimated that 29% of new Internet purchases were in tiers offering 300 Mbit/s or greater, compared to just 9% in 2019. Almost a third of consumers surveyed said slow speeds were a problem with their existing service, while 20% said performance issues such as high latency and unreliable service were frustrating.

That result tracks with other recent research indicating Americans are moving up to higher-speed data tiers. In its recent Quantified Customer study, Parks Associates estimated that 24% of US broadband households are likely to upgrade their Internet service over the next six months.

Consumers may have seen a need for speed, but they were also looking for better deals. The survey found that more than a third of those who switched Internet service said they did so for a better price.

There were even more shifts in wireless, as BroadbandNow estimated 49 million consumers switched or bought new mobile phone plans in 2020, more than double the 22.7 million households that did so the year before – a leap BroadbandNow attributes to aggressive switch offers and new phone demand. The beleaguered landline phone also saw a small revival in 2020, as 9.4 million households bought new service, up from 8.9 million in 2019. While some customers were probably going back to tried-and-true landline phones with better in-home voice quality, others probably added it as part of attractive bundles, BroadbandNow concluded.

In contrast to voice and data, there wasn’t as much change in video, even as customer satisfaction ratings held steady for traditional pay TV and streaming offerings. About 72.6 million households bought a new streaming video service, down from 80.9 million households in 2019. Among households that bought or switched streaming services, 60% said they did so to watch a specific show or event, 40% sought more affordable pricing and 35% wanted to watch content without advertisements.

Similarly, 24.9 million households bought new cable and satellite TV service, down from 26.6 million in 2019. When asked why they bought or switched TV service, 49% of respondents said they wanted a better price, and 36% said they wanted better quality service. Another 34% said they were moving.

Elsewhere, other estimates indicate cable and satellite TV viewership is still dropping. In a new report, Pew research estimated that just 56% of Americans subscribe to a cable or satellite TV service, markedly down from 76% in 2015.

TV service spending may be declining, but the power of the bundle improved. BroadbandNow found that more than 78% of shoppers who bought cable or satellite TV service in 2020 did so as part of a bundle with other telecom services, up 18% compared to 2019 rates. About a third of these customers said bundle package savings were the primary draw, preventing them from cutting the cord and relying on streaming service options.

— Karen Brown, Special Contributor, Light Reading

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