Wireless Service Spending Increases Among Customers on Faster Networks
Wireless customers who experience faster and more consistent network speeds spend considerably more on their wireless service plans, according to J.D. Power and Associates.
The study finds that the amount of monthly wireless spending is considerably higher among customers who experience fewer problems with slower connection speeds. For example, smartphone customers who experience between one "problem per 100 connections" (PP100) and 10 PP100 with slow mobile web speeds spend an average of $11 more per month than those who experience between 11 PP100 and 20 PP100 ($140 vs. $129, respectively).
Customers experiencing more consistent network speeds are more likely to be brand advocates, as 31 percent of smartphone customers who experience between 1 PP100 and 10 PP100 "definitely will" recommend their carrier, compared with 24 percent among customers who experience between 11 PP100 and 20 PP100.
"It's very interesting to see the dramatic financial difference between wireless customers who consistently experience a fast network connection and those who experience higher problem incidence in this area, especially when using Internet-based services," said Kirk Parsons , senior director of telecom services at J.D. Power and Associates. "Added to this, the network advantages of using 4G LTE technology, in terms of spectrum efficiencies and increase in data connection speeds and reliability, it's not unexpected that wireless carriers are rushing to expand and upgrade their networks to align with this latest generation of service."
According to Parsons, the key is getting wireless customers to upgrade to 4G-enabled devices, including smartphones and tablets, as satisfaction and loyalty levels among these customers is much higher than among those using devices with other 3G/4G technology standards, such as WiMAX and HSPA+. Overall, satisfaction is significantly higher among smartphone customers using 4G networks than among those using previous-generation networks (7.3 vs. 7, respectively, on a 10-point scale). This satisfaction gap is due to the level of problems experienced with network quality. On average, 4G LTE smartphone customers experience significantly fewer issues with data than do 3G customers (16 PP100 vs. 19 PP100, respectively). This in turn translates to higher brand loyalty. Notably, 12 percent of smartphone customers using 4G LTE service indicate they are likely to switch their carrier within the next year, compared with 15 percent among those using 3G.
"Based on varying degrees of consistency with overall network performance, it is critical that wireless carriers continue to invest in improving both the voice quality and data connection-related issues that customers continue to experience," said Parsons.
For a 17th consecutive reporting period, Verizon Wireless ranks highest in the Northeast region. Verizon Wireless achieves fewer customer-reported problems with dropped calls, initial connections, transmission failures and late text messages, compared with the regional average. Verizon Wireless also ranks highest in the Mid-Atlantic, Southeast, Southwest and West regions.
U.S. Cellular ranks highest in the North Central region for a 15th consecutive reporting period. Compared with the regional average, U.S. Cellular has fewer customer-reported problems with dropped calls, failed initial connections, audio problems, failed voice mails and lost calls.