Verizon leads Tier 1 carriers in Consumer Reports' survey, while Sprint slips to last
Verizon Wireless (NYSE:VZ) led all Tier 1 U.S. carriers in a survey conducted by Consumer Reports over cell phone service, while Sprint (NYSE:S) fell to last place after ranking No. 2 behind Verizon last year in customer satisfaction. According to Consumer Reports, Sprint received "dismal marks" in 2013 for value, voice, text and 4G reliability.
"Our latest cell service satisfaction survey revealed a somewhat precipitous decline by Sprint that shuffled the rankings of the major standard service providers," Glenn Derene, electronics content development team leader for Consumer Reports, said in a statement.
Overall, Tier 3 carrier Consumer Cellular, which uses AT&T Mobility's (NYSE:T) network, received the highest overall score of 88 out of 100, followed by U.S. Cellular (NYSE:USM). The annual ratings were based on a September survey of 58,399 cell phone service subscribers by the Consumer Reports National Research Center.
Derene said "smaller, no-frills, no-contract and prepaid service providers continue to do a better job of satisfying customers, and provide an increasingly viable alternative to some of the expensive, long-term contracts that many consumers find themselves locked into." Previous Consumer Reports' surveys have shown that smaller carriers such as Consumer Cellular and TracFone rated better than the Tier 1 carriers in customer satisfaction by offering high-quality phones, relatively reliable service, and simpler, more consumer-friendly plans.
Verizon ranked highest again in 2013 among the Tier 1 carriers with a score of 71. Consumer Reports said that T-Mobile and AT&T received "mostly ho-hum marks." T-Mobile rated 65 and AT&T came in at 64, according to survey results. However, Consumer Reports said AT&T was the lone carrier to receive the top rating for the reliability of its 4G service.
Sprint, however, took the lowest score of 59. That could be attributed to several factors. Sprint shut down its legacy Nextel iDEN network at the end of June, resulting in a loss of service for many customers. Sprint had worked to move its iDEN customers onto its CDMA and LTE networks.
Additionally, as part of Sprint's Network Vision network modernization project, Sprint has been ripping out and replacing 3G CDMA equipment, in addition to deploying LTE, as part of an effort to improve inbuilding coverage and voice quality. However, in markets where Network Vision is not yet complete, Sprint executives have said that customers have experienced degradation in service. Yet in markets where Network Vision is nearing completion, Sprint has reported improved call quality and service levels.
"In cities like Chicago, where our Network Vision build is more than 70 percent complete, we are seeing significant improvements, not only in churn, but also in gross adds, compared to earlier months when customers were experiencing the 'pardon our dust' phase of our Network Vision deployment," Sprint CEO Dan Hesse said on the company's third-quarter earnings conference call at the end of October, according to a Seeking Alpha transcript.
"It has been a very complex and it's been very hard work to take down the Nextel network and to rip out and replace the entire Sprint 3G network in order to build a flexible platform running 4G LTE on three spectrum bands with the network architecture flexibility to add even more frequencies in the future," Hesse said. "We are finally turning the corner on this massive project and seeing the light at the end of the tunnel."
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