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August 23, 2007

Survey Shows Prepaid Wireless Customers Satisfaction Increasing

By Susan J. Campbell, TMCnet Contributing Editor

Despite the stigma that was once associated with prepaid wireless, this service has seen tremendous growth over the past few years. Part of this growth could be due to the change in customer perception and increased customer satisfaction.
According to the J.D. Power and Associates 2007 U.S. Wireless Prepaid Customer Satisfaction Study, overall customer satisfaction with wireless prepaid service has increased considerably since 2006 as customers have responded to new service offerings, aggressive pricing strategies and improved network quality.

Now in its second year, the study measures customer satisfaction with current prepaid wireless service across seven key dimensions, including call quality (24 percent); company image (19 percent); cost of service (17 percent); account management (15 percent); initial activation (11 percent); service plan options (8 percent); and customer service (6 percent).
Customer satisfaction overall has improved 10 index points since 2006 to 727 on a 1,000-point scale. The study finds that in particular, the availability of new services and more attractive pricing options has contributed to the industry-wide increase. For instance, the cost of service factor increases by 21 points, which is the largest increase of any factor since 2006.
This increase in satisfaction is due in part to the cost of service improvements related to the cost/value relationship of airtime minutes offered for the price paid and fairness of charges for calls while roaming outside the local calling area.
“It’s encouraging to see that industry-wide service improvements such as expanded service offerings and aggressive service plan pricing have resulted in higher satisfaction with wireless service experiences,” said Kirk Parsons (News - Alert), senior director of wireless services at J.D. Power and Associates, in a Thursday statement.
“However, customer expectations will continue to rise as wireless users increasingly rely on the communication functions of their cell phones beyond voice calling. With the addition of features such as unlimited text messaging and video sharing plans, prepaid service offerings are beginning to match postpaid offerings, which will contribute further to the increase in customer expectations.”
The study also found that call quality improved by 14 index points since 2006. Improvements were noticed particularly regarding connection and quality-related issues such as the perceived size of the local calling area and the ability to place or receive calls inside buildings.
Of those companies ranked in this study, Virgin Mobile ranks the highest in prepaid wireless satisfaction for a second consecutive year and performs particularly well in cost of service, account management, initial activation and service plan options. AT&T GoPhone, Boost Mobile and T-Mobile (News - Alert) To Go also rank above the industry average.
By providing its customers with positive service experiences, Virgin Mobile continues to differentiate itself from the competition in areas related to support functions,” said Parsons. “From initial account setup and activation to account management tools that track and update available minutes, Virgin Mobile continues to provide its customers with important elements that positively impact their daily service experiences.
Although customers using prepaid wireless are not in a contracted arrangement with a provider, they still have the same expectations as if a contract did exist and the company was responsible for ongoing service and support. As a result, these prepaid providers are under increasing pressure to deliver a satisfying experience.
Given the intense competition that has developed in the prepaid wireless arena and the ease in which customers are able to switch providers, these organizations must pay close attention to their level of service, call quality and customer perception. If not, they will likely lose their customers to those providers that make such elements a priority.
Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for To see more of her articles, please visit Susan J. Campbell’s columnist page.
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