J.D. Power and Associates Reports: Service Outage Reductions Lead to Performance Gains among Telecommunications Data Service Providers

WESTLAKE VILLAGE, Calif., June 17 /PRNewswire/ -- Business satisfaction with data providers' network reliability improved markedly from 2009 as a result of fewer service-impacting outages, according to the J.D. Power and Associates 2010 U.S. Major Provider Business Telecommunications Study(SM) – Data Services, released today.

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Overall, the average number of short duration outages (those that last less than five minutes) experienced by customers during the past six months has decreased by more than 16 percent, to 5.9 incidents in 2010 from 7.0 in 2009. The average number of extended outages (greater than five minutes) has dipped more than 11 percent in the same period, to 2.6 incidents in 2010 from 2.9 in 2009.

Consequently, satisfaction with performance and reliability has improved across all three business segments, compared with 2009.  Although satisfaction with this factor only improves by one index point for the large enterprise business segment, satisfaction among small/midsize businesses has increased by 16 points. In the home-based business segment, satisfaction has improved by 10 index points from 2009.

In addition to driving increases in satisfaction scores, the frequency of outages impacts the likelihood that customers will switch providers. Among those customers who experienced two or fewer brief outages in a year, 9.4 percent say that they "probably would" or "definitely would" switch providers in the coming months. Customers experiencing three or more outages are more than twice as likely to switch, at 19.7 percent.

"While carriers will never be able to eliminate outages due to weather or natural disasters, reducing outages directly attributable to factors they can control may have a favorable impact on customer retention and the provider's bottom line," said Frank Perazzini, director of telecommunications at J.D. Power and Associates.

Aided by the reduction in outage frequency, business data service providers have improved substantially in the area of timely resolution of customer issues. Overall, 86 percent of customers say that their issue was resolved in a timely manner in 2010—a 10-percentage-point gain from 76 percent in 2009.

"This increase in timely resolution does seem to have come at a price for service providers," said Perazzini. "Business customers are bypassing interactive voice response systems in greater numbers and talking directly to support representatives (44% in 2010 vs. 38% in 2009). This is a double-edged sword that may adversely impact customer service economics, should this trend continue."

The study measures customer satisfaction with providers of telecommunications data services, such as cable modem, DSL, T1, T3/DS3, Ethernet and frame relay. Providers are ranked in three segments: home-based businesses (companies based in a residential location with one to five employees); small/midsize businesses (companies with two to 499 employees); and large enterprise businesses (companies with 500 or more employees). Five factors are used to measure satisfaction across all three segments: performance and reliability; billing; cost of service; offerings and promotions; and customer service. A sixth factor—sales representatives/account executives—is included for small/midsize businesses and large enterprise businesses.

With an index score of 645 on a 1,000-point scale, Optimum Business by Cablevision ranks highest in the home-based business segment. Optimum Business performs particularly well in the cost of service and offerings and promotions factors. CenturyLink (638) and Verizon (637) follow in the segment rankings.

Cox Communications ranks highest in the small/midsize business segment with a score of 683, and performs particularly well in four of the six factors driving satisfaction: sales representatives/account executives; billing; performance and reliability; and customer service. Optimum Business follows Cox in the segment rankings with a score of 668, and AT&T ranks third with 647.

In the large enterprise business segment, Verizon ranks highest in customer satisfaction with a score of 696, and performs particularly well in all six factors: performance and reliability; sales representatives/account executives; customer service; cost of service; billing and offerings and promotions. AT&T follows Verizon in the segment rankings with a score of 680.

The 2010 Major Provider Business Telecommunications Study is based on responses from 5,439 business customers of telecommunications data services at home-based, small/midsize and large enterprise businesses in the United States and includes evaluations of their data service providers. The study was fielded in September and November 2009 and January and March 2010. Visit the J.D. Power Business Center for additional information on J.D. Power's telecommunications research.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a global information and education company providing knowledge, insights and analysis in the financial, education and business information sectors through leading brands including Standard & Poor's, McGraw-Hill Education, Platts, and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2009 were $5.95 billion. Additional information is available at http://www.mcgraw-hill.com/.

J.D. Power and Associates Media Relations Contacts:

John Tews; Troy, Mich.; (248) 312-4119; [email protected]

Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; [email protected]

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

SOURCE J.D. Power and Associates