Customers have a better opinion of prepaid MVNOs like AT&T’s Cricket Wireless, Metro by T-Mobile and Sprint’s Boost Mobile than they do of traditional carriers like AT&T, T-Mobile, Sprint and Verizon. That’s according to the American Customer Satisfaction Index’s (ACSI) latest "Wireless Service and Cellular Telephone Report".
The results are based on surveys conducted over a 12-month period ending March 2019.
Overall, ASCI reports customer satisfaction with wireless services has increased 1.4% over the past year, to reach a score of 75 on ASCI’s 100-point scale. But, carriers AT&T, Verizon, Sprint and T-Mobile make up the lowest-scoring category for customer satisfaction.
T-Mobile leads the pack with a score of 76. Its proposed merger partner, Sprint, scored the lowest among the four carriers, with a score of just 65. ASCI noted that customers complained of data speeds and lack of wireless plan options among this group.
On average, these carriers held a score of 73, below the average for what ASCI refers to as “full-service MVNOs,” which had a score of 77. ASCI lumps Cricket Wireless, Metro by T-Mobile, Virgin Mobile and Boost Mobile in this category. The report noted that straight-forward billing, and in-person customer service earned top marks among this group.
Verizon ranked at the top in terms of network quality, earning a score of 80. AT&T came in second place, with a score of 78. T-Mobile was tied with U.S. Cellular for third, each earning a score of 77. Sprint came in last in terms of network quality, with a score of 72.
David VanAmburg, managing director, the ACSI, noted that network quality isn’t a significant differentiator between the traditional carriers and the MVNOs that use the same networks.
“Customer satisfaction differences in MNOs and MVNOs then come down to everything else such as flexibility, pricing, and value propositions,” VanAmburg told FierceWireless. “Here, MVNOs are doing better than MNOs. One distinguishing factor is MVNOs’ prepaid options offer more flexibility than MNOs’ contracts.”
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The leaders in customer satisfaction, according to the data, were the “value MVNOs,” which include companies like Consumer Cellular, Straight Talk Wireless and Tracfone Wireless. That group averaged a score of 81, with ease of billing ranking as one of the top pluses for this group.
ASCI noted that while the majority of wireless customers spend $100 or less per month on mobile phone service, customers who spend over $100 have lower customer satisfaction and are less loyal. ASCI estimates these higher ARPU customers make up about 18% of the wireless customer base, but account for 40% of revenue lost to annual churn.
“Obviously, higher prices play a role in the lower satisfaction and loyalty for the higher spending groups. But lower perceived value tells only a small part of the story,” Forrest Morgeson, director of research, the ACSI, told FierceWireless. “In fact, at the industry level, the biggest differentiator between lower spend customers, [paying] up to $100 per month and higher spend customers, [paying] greater than $100, is in their understanding of their bill. The higher spend customers find it significantly harder to understand their bill, while also being critical of the variety of voice and data plans to choose from.”
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While the survey did not include cable companies’ wireless offerings, it did note their existence is impacting the traditional wireless market. “Competition from new alternatives like Comcast’s Xfinity Mobile and Charter’s Spectrum Mobile is putting pressure on traditional carriers to improve service,” the report said.
“While we’re starting to see samples of them in our data set, these providers don’t have a large enough market share,” VanAmburg said, adding that the data would not be statistically significant. “But cable MVNOs are gaining subscribers, and there’s a possibility we’ll be reporting on those brands in the future,” he said.
This story has been updated to include commentary from ASCI representatives.