WSJ : The Leading Cellular Service -- In Customer Complaints.
[Guess who ?
Jon.]
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January 27, 2004
The Leading Cellular Service -- In Customer Complaints
AT&T Wireless Earns Highest Gripe Rate at FCC; Verizon Wireless Has Lowest
By JESSE DRUCKER and CARL BIALIK
Staff Reporters of THE WALL STREET JOURNAL
At&T Wireless Services Inc. has won a dubious distinction in an industry that consumers love to gripe about.
For the past year, the nation's No. 3 cellular network operator, in terms of subscribers, consistently has had the highest customer complaint rate of any national wireless carrier, according to complaints received by the Federal Communications Commission and obtained by The Wall Street Journal through a Freedom of Information Act request. Despite that record, AT&T Wireless is the focus of a fierce bidding war in the battered telecommunications industry because of its many assets, such as a strong balance sheet and a high concentration of business customers.
It isn't a surprise that complaints about AT&T Wireless would be so high in the fourth quarter, given the company's problems installing customer-management software last fall and difficulties implementing rules allowing callers to keep their cellphone number when they switch carriers. Indeed, figures released last month by the FCC show that AT&T Wireless generated more "number portability" complaints than any other wireless company.
Still, the FCC records obtained by the Journal suggest that the company's problems with customers extend beyond the number-switching issue and temporary software problems. Complaints about everything from billing to marketing have consistently been higher than competitors for a year -- and they have been rising.
"We take this customer feedback seriously; we take all customer feedback seriously," an AT&T Wireless spokesman said. "That said, the number of complaints we received is so small that it's almost not measurable in terms of the size of our customer base. And it's important to keep that in context, it's not like we're getting millions of complaints every quarter."
Given the size of the wireless industry, the number of overall FCC complaints is relatively small, as few consumers take the trouble of actually contacting the government agency. Still, Roger Entner, an analyst for the Yankee Group, says the numbers are significant because lodging a complaint is time-consuming. "These are people who are truly upset," Mr. Entner says.
In the third quarter, AT&T Wireless had a rate of 6.4 complaints per 100,000 customers. The rate of complaints for Sprint PCS was next highest at 4.0 per 100,000 customers, while T-Mobile USA Inc., the U.S. arm of Germany's Deutsche Telekom AG, had complaints of 3.5 per 100,000. A spokesman for Sprint PCS declined to comment on the complaint figures. "Sprint continues to place a major emphasis on customer satisfaction, network improvements and product price satisfaction," he said. Until complaints for all carriers soared in the fourth quarter, Sprint's complaint rate was fairly steady for most of 2003, unlike AT&T Wireless, which consistently increased.
The FCC provided the total complaint figures, but the rate was calculated by the Journal. An FCC spokeswoman cautioned that the existence of a complaint doesn't mean the carrier has done anything wrong, and said the FCC doesn't rank carriers. Cingular Wireless, the nation's second-largest wireless company based on subscribers, posted 3.2 complaints per 100,000 customers, while Nextel Communications Inc. had 2.0 complaints per 100,000. Verizon Wireless, the nation's largest cellphone operator, had the lowest rate of complaints, with 1.5 per 100,000 customers. The rates for AT&T Wireless and Sprint were calculated including the two carriers' affiliates.
None of this comes as a surprise to Rich Colley. A customer of AT&T Wireless for 11 years, he recently experienced difficulties switching his old cellphone to a newer model that would work on AT&T Wireless's new network. It took two weeks and multiple calls to customer service before he could get it to work, including one call that left him on hold for 52 minutes.
"When I called tech support or customer service, they didn't have answers to anything," said the sports rehab specialist from Tujunga, Calif., who says he is canceling his service after his contract expires. "I feel like they don't really care about their customer base." An AT&T Wireless spokesman attributed Mr. Colley's woes to problems with the installation of new customer-service software.
At the end of the third quarter, AT&T Wireless, plus its affiliates and resellers, had 23.3 million customers. Verizon Wireless had 36 million. Cingular had 23.4 million. Sprint PCS, including its affiliates, had 19.3 million customers. Nextel had 12.3 million subscribers. T-Mobile had 12.1 million subscribers.
In the quarter, the FCC received 1,494 complaints about AT&T Wireless; 529 about Verizon Wireless; 749 complaints about Cingular; 767 about Sprint PCS; 247 about Nextel; and 429 about T-Mobile.
Other surveys bolster the FCC complaint data. The Consumers Union this month released the results of a survey it conducted last fall in 12 big U.S. cities. It found Verizon Wireless consistently at the top in every market in terms of customer satisfaction. Nextel frequently was No. 2, although the difference between Nextel and at least one other carrier in several cities often wasn't statistically meaningful. AT&T Wireless and Sprint PCS were last or next to last in nearly every market. (The difference between those two carriers and the other carriers ranked just ahead of them was almost never statistically meaningful.) AT&T Wireless's satisfaction rating fell from a year ago in every single market Consumers Union measured in both years.
Write to Jesse Drucker at jesse.drucker@wsj.com and Carl Bialik at carl.bialik@wsj.com
Updated January 27, 2004
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