SURVEY SHOWS MANY WIRELESS PHONE CONSUMERS DISSATISFIED WITH THEIR SERVICE
COLUMBUS, Ohio – Almost one-fourth of all cellular phone users have stayed with their original providers even though they are dissatisfied with their service, according to a new nationwide survey released today.
Overall, about one-third of the 11,492 respondents gave their cellular service a rating of “poor” or “very poor.”
The results suggest there may be a large number of cellular phone users who will be shopping for new providers starting Nov. 24 when federal regulations will allow consumers to keep their phone numbers when they switch wireless carriers.
“Cellular phone customers have not been happy with their service
but feel somewhat stuck with their current companies,” said Vivian
Witkind Davis, a leader of the study and associate director of Ohio
State University’s National
Regulatory Research Institute (NRRI).
The random survey was done over the Internet by a private, online research company, BIGresearch, on behalf of the NRRI. Almost 19,000 consumers filled out the survey in January and February 2003 and 64 percent said they had a wireless phone. Consumers who opted-in to various Internet listservs and newsletters were given the opportunity to participate in the survey. Results of the survey were balanced to ensure that the gender and age of the participants reflected the general United States population.
Witkind Davis said the results of the survey raise two red flags for state commissions who help regulate the wireless industry. The first red flag is that many consumers perceive a lack of quality service from their wireless providers. The second red flag is that, despite this poor service, consumers feel they don’t have an effective choice among wireless providers.
“When you have both of these red flags, regulators may have to
consider what they can do to help consumers,” Witkind Davis said.
When asked to grade their cellular service, 26 percent gave their service a “D” (or poor) and 9 percent gave it an “F” (or very poor). Only 4 percent gave their cellular service a grade of “A,” while 15 percent gave a “B” and 46 percent gave a “C” grade.
Of all the utilities rated by consumers – including water, electric, natural gas, local phone and long distance phone – cellular service ranked next to last among consumers, ahead only of cable service.
Consumers said they had a variety of reasons for contacting their wireless providers, but billing issues led the list. More than half (56 percent) had contacted their provider about billing issues in the previous year. Difficulty understanding the phones’ features (28 percent), dropped calls (23 percent) and static/line noises (20 percent) were the other common reasons consumers contacted their cellular company in the past year.
While many consumers were dissatisfied with their providers, a surprising number had not switched their cellular company. About 24 percent said they had stayed with their provider even though they were not happy. About 62 percent said they had stayed with their provider and were satisfied, 10 percent said they had switched providers and were satisfied with their new choice and 4 percent said they switched and were still not satisfied.
Witkind Davis said it is possible that because the survey was done over the Internet, it may somewhat over represent the dissatisfied. Internet users tend to be high-end users of technology, and these high-end users also tend to be less satisfied with telecommunications services than low-end users. However, the levels of dissatisfaction are high enough that regulators may consider ways to encourage better quality service, she said.
Phone number portability is one policy change that will help. However, there are more changes that policymakers should consider, according to Witkind Davis.
For one, there needs to be more consumer awareness of how to deal with issues concerning their wireless service.
“The seemingly high number of contacts that consumers have with cellular providers, especially on billing, suggests a need for clear consumer education materials by providers and perhaps by regulators,” she said.
Wireless bills also need to be more understandable and accurate and give contact information for the Federal Communications Commission and state regulators for any issues that consumers might face.
State regulators may also consider expanding oversight over wireless service quality to ensure that phone service works as advertised, she said.
“Regulators are obviously concerned that they don’t intervene in ways that hurt competition and the development of the free marketplace,” Witkind Davis said. “However, the red flags flying over the cellular industry are a warning that consumers may need more protection.”
The NRRI is an independent institute that provides research and assistance to the nation’s state public utility commissions. It was established at Ohio State in 1976 by the National Association of Regulatory Utility Commissioners (NARUC).
This survey was funded by the member commissions of the NARUC.