J.D. Power and Associates Reports: Web Sites and Online Billing Gain Popularity among Local Telephone Customers as Web Site Visits Pick Up Dramatically in 2004

Business Wire, July 21, 2004

WESTLAKE VILLAGE, Calif. -- Telecommunications Bundling Continues to Climb in Acceptance

Twenty percent of households now report visiting their local telephone service provider's Web site in the past six months, up 6 percentage points from 2003, according to the J.D. Power and Associates 2004 Residential Local Telephone Customer Satisfaction Study(SM) released today. This represents the largest percentage increase in the past four years.

Billing is the focus of most customer visits, with 56 percent of Web site users reporting they have reviewed a bill, and 44 percent having actually paid their bill online -- up 13 percent from 2003. Remarkably, customers with Internet access who visited their local provider's Web site in the past six months have significantly higher overall satisfaction scores than those who have not.

"Online billing is a trend that the industry has been looking for," said Steve Kirkeby, senior director of telecommunication research at J.D. Power and Associates. "Customers can review their service whenever they want from wherever they are and much more cost effectively for the carrier. While billing self service has improved dramatically, the next industry plateau will be to provide a broader-based, high-quality customer service assistance via the Web or e-mail. Customer service, by far, is the most important component of overall satisfaction in this industry, and improving e-service represents a major opportunity."

The share of households reporting that they have bundled at least local and long distance telephone service with one provider took another significant jump in 2004, increasing by 11 percent to 51 percent, or nearly 10 million households nationally. More importantly, when asked whether they would be likely to switch any additional telecommunications services (wireline, Internet, wireless and television) to a multi-service provider, 43 percent of respondents report they "definitely" or "probably" would do so.

"Despite continued growth, there has been no loss of appetite nationwide for bundling," said Kirkeby. "This underscores our belief that households are most likely to leave their current provider for one key reason -- to bundle."

Customer satisfaction with local telephone service continues to rise from its low point in 2002, even as perceived monthly spending has risen each year since the study launched in 1996. Consumers report spending $38.10 per month on local service -- up from $34 in 2003.

Overall satisfaction is determined based on six factors (in order of importance): customer service, billing, performance and reliability, company image, cost of service, and offerings and promotions. Study results by region are:

Northeast Region: AT&T ranks highest, with top ratings from its customers in the areas of image, offerings, and promotions and billing.

Mid-Atlantic Region: AT&T ranks highest, outperforming its competitors in performance and reliability, billing, offerings and promotions, and image.

Southeast Region: AT&T ranks highest, and in all six factors.

North Central Region: Talk America ranks highest for the second consecutive year, receiving top ratings in customer service, offerings and promotions, and billing.

Southwest Region: AT&T ranks highest, with top ratings in billing, image and offerings, and promotions.

West Region: Cox Communications ranks highest for the second consecutive year among the largest group of regional competitors, with top ratings in customer service, billing, performance and reliability, company image, and cost of service.

The 2004 Residential Local Telephone Customer Satisfaction Study is based on responses from more than 10,500 residential users of local telephone service nationwide.

Headquartered in Westlake Village, 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.

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