"Customers increasingly want telecom services and products to be bundled" - says study on US market

The J.D. Power and Associates 2007 Residential Regional Telephone Customer Satisfaction Study says cable companies, which for the first time lead the customer-satisfaction rankings for telephone service in all six U.S. regions, are proving to be tough competition, mostly due to the rise of triple-play bundles.
The study is based on responses collected in April and May from 11,911 customers nationwide who receive their local and long-distance telephone service from one provider. J.D. Power looked at six factors are examined in determining overall satisfaction: performance and reliability, customer service, billing, image, cost of service, and offerings and promotions.
The study says 86 percent of cable-based voice subscribers also subscribe to data services from the same provider--up from 71 percent in 2006. Conversely, 36 percent of telecom-based voice subscribers also use their providers to fulfill their data needs, an increase of 7 percentage points year over year. The impact of bundling is further evidenced by the boost in importance weight of the offerings and promotions factor, which has increased by 3 percent since the 2006 study.

Customers increasingly want multiple services and products bundled into one convenient package under a single provider, and cable companies are doing a great job of achieving this with their voice, data and video packages. Even still, local and long-distance phone services remain the most widely accepted services to bundle, with data and video steadily closing the gap over the past three years. While rolling out their video-service offerings, telephone companies can improve their near-term competitiveness by either lowering prices on their core products or perhaps even adding wireless service to their bundle options, as some have already done.
The study also finds that 43 percent of customers are loyal to their voice provider, an increase from 41 percent in 2006. However, among the 12 percent of subscribers who "definitely" or "probably" intend to switch providers, the most frequently cited reasons for doing so include competitive/discounted pricing, convenience and receiving a single bill.

It seems as though most subscribers are becoming more loyal, with 36 percent of those who currently bundle reporting they would add even more products or services from their current provider, making the next several years crucial for both telephone and cable companies. Kirkeby continues.