Internet and Broadband Consumers Driven by Price and Customer Service
Claritas' Convergence Audit Shows Price and Customer Service Are Key Factors for Cable/Satellite and Internet/Broadband Users. Despite Gains, Consumers Also Continue to Remain Slow in Responding to Technological Advances
When looking at products and services within the highly competitive world of telecommunications, especially the more widely-used ones like cable/satellite and Internet/Broadband, consumers say they are driven, in part, by two key factors -- competitive pricing and reliable customer service, according to recent findings from the 2004 Convergence Audit.
It also showed that while consumers continue to take a measured approach in responding to the array of technological advances, some offerings, such as wireless home networking and Wi-Fi usage, are beginning to make strides.
The Audit, which is administered by Integras, Claritas' advanced analytical services division, is an annual survey of 38,000-plus households that covers the converging industries of wireline and wireless telephony, cable television, Internet, satellite and energy, providing important insight into the attitudinal direction of the buying public.
"For cable/satellite users who switched from one service to the other over the last year, the number one reason for doing so was 'attractive pricing,'" said Kristin Borgman, Integras' Director of Customer Research.
"This is especially true for previous cable subscribers who switched to satellite, where price is cited by nearly one out of every three households as a reason for switching, followed by 'better program choices.' While price is also a factor for previous satellite subscribers who switched to cable, the reasons are more evenly split between pricing, program choices and most notably high-speed Internet service," she added.
Customer service came to the fore in choosing one type of high-speed Internet access over another for both cable modem and DSL users at 68 percent and 61 percent, respectively, while "unlimited online hours" was a distant second for cable modem users at 28 percent, and 24 percent for DSL customers.
But despite the advantages of high-speed connectivity, the most prevalent type of Internet connection in the home continues to be conventional dial-up, though the numbers are declining. In 2003, 62 percent of households with Internet access still used a standard phone line to connect at home, but in 2004 the number dropped eight points to 54 percent. The differential from two years ago was even more significant when nearly 80 percent of households with Internet access said they were connecting by dial-up. And, as in previous years, cable modem usage was far behind in second place, coming in at 26 percent, followed by DSL at 16 percent.
Elsewhere, Subscription Video on Demand (SVOD) penetration remains low despite usage by digital cable households more than doubling from 2003 to 2004, jumping from three percent to eight percent. And, when asked if they intend to use SVOD, just six percent of the respondents indicated they would definitely/probably pay to use it in the next year. As for free VOD, digital cable subscribers are still slow to respond with 81 percent saying they may or may not, or definitely/probably would not use it.
The advent of wireless home networking, though still far from the mainstream, is beginning to make inroads, suggesting consumers are becoming better acquainted with the benefits of a wirelessly connected home. Penetration in 2004 reached seven percent among households with PCs, up from four percent in 2003.
Wi-Fi usage is also on the rise, doubling from two percent in 2003 to four percent this year. The Audit also found that the top locations for Wi-Fi were weighted towards hotels/resorts/RV parks at 52 percent, followed closely by libraries/universities at 49 percent.
Rounding out the list were airports -- 30 percent, coffee houses/restaurants -- 19 percent, shopping malls/stores -- 16 percent and office/business centers -- 12 percent.
Elsewhere, usage for another new technology, Voice over Internet Protocal (VoIP), remained quite low, however awareness is increasing. Specifically, 50 percent of the households surveyed said they had heard of using the Internet to make phone calls.
Source: press release
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