J.D. Power and Associates Reports: More Than One-Half of Households Now Bundle Their Long-Distance Service with Another Telecommunications Product

Business Wire, July 1, 2004

WESTLAKE VILLAGE, Calif. -- Cox Communications and Qwest Rank Highest in Satisfying Customers in Bundled and Standalone Long Distance Service

The number of long distance telephone customers opting to bundle their telecommunications products with one provider continues to rise significantly, with more than one-half of households now bundling services, according to the J.D. Power and Associates 2004 Residential Long Distance Telephone Service Study(SM) released today.

The share of households that report at least bundling their local and long distance services with one carrier has increased from 26 percent in 2002 to 51 percent in 2004 -- an overall increase of almost 20 million households. Customers who bundle services continue to report higher overall satisfaction, despite the fact that average household spending is essentially the same among those who bundle and those who do not. Overall, long distance spending continues to fall. The average monthly household expenditure for long distance is currently $20.80 -- down $3.60 (15 percent) from 2003.

"With so many telecommunications products now available under the umbrella of a single provider, consumers are rushing to bundle, not only for the competitive pricing, but also and most often to simplify the billing process," said Steve Kirkeby, senior director of telecommunications research for J.D. Power and Associates. "More than 35 percent of respondents say they would be likely to switch all their telecommunications products (wireline, wireless and cable TV/satellite) to one provider, demonstrating a continuing strong demand among consumers for a single point of contact."

The study segments have been restructured for 2004 due to the overwhelming impact of bundling on the long distance industry. Customer satisfaction is now measured from two perspectives: bundled long distance customers, who purchase some telecommunications services from their long distance provider, and standalone long distance customers. Factors affecting overall satisfaction are performance and reliability, cost of service, billing, image, offerings and promotions, and customer service.

Under the new structure, a cable company ranks highest in customer satisfaction for the first time in the history of the study. Cox Communications ranks highest in the bundled long distance telephone service segment, performing particularly well in performance and reliability, billing, and image.

Qwest ranks highest in customer satisfaction among standalone users, performing particularly well in billing, customer service, performance and reliability, and cost of service.

While overall satisfaction with long distance providers remained steady compared with 2003, customer service has become significantly more important to long distance customers.

"Even though prices are down and all factors show some improvement, customer service now carries the lion's share of the weight for determining overall customer satisfaction with long distance service," said Kirkeby. "The message is clear: Long distance providers must rededicate their efforts in this very competitive area, especially with service bundling taking over."

The 2004 Residential Long Distance Telephone Service Study is based on a national representative sample of more than 10,500 households.

Headquartered in Westlake Village, Calif., J.D. Power and Associates (www.jdpower.com) is an ISO 9001-registered global marketing information services firm operating in key business sectors, including market research, forecasting, consulting, training and customer satisfaction. Media e-mail contact: michael.greywitt@jdpa.com or john.tews@jdpa.com.

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.