J.D. Power and Associates Reports: Three-Quarters of Households Now Bundle Local and Long Distance Telephone Service with One Provider; AT&T Ranks Highest in Customer Satisfaction in Three out of Six U.S. Regions

Business Wire, July 13, 2005

WESTLAKE VILLAGE, Calif. -- Seventy-five percent of U.S. households now receive their local and long distance telephone service from one provider -- up from 51 percent a year ago -- according to the J.D. Power and Associates 2005 Residential All-Distance Telephone Customer Satisfaction Study(SM) released today.

For the first time, J.D. Power and Associates is measuring customer satisfaction with both local and long distance telephone service in one study, reflecting the growing percentage of U.S. households bundling both services with a single provider. Overall satisfaction is measured based on performance in six factors: customer service; billing; performance and reliability; company image; offerings and promotions; and cost of service.

The study finds that despite the cost savings associated with bundling local and long distance service with a single provider, cost of service and offerings and promotions are the factors that consumers rate lowest in satisfaction. Customers report spending an average of $50.70 a month for local and long distance service, compared to $64.40 in 2004.

"Consumers continue to expect even more discounts from their carriers in exchange for their patronage and loyalty," said Steve Kirkeby, senior director of telecommunication research at J.D. Power and Associates. "With the wide array of telecommunications options and increased competition for residential customers among traditional telephone companies, competitive local exchange carriers and cable companies, consumers have a great opportunity to save money and still receive high levels of customer service."

The number of households reporting that they changed local or long distance service providers in the past year plummets -- from 17 percent in 2004 to 10 percent in 2005 for local service and from 31 percent to 12 percent for long distance. Only 7 percent of respondents indicate a likelihood of switching carriers in the future -- down from 17 percent for local service in 2004.

"This drop in switching is evidence that large numbers of subscribers have already combined their local and long distance service and expect to stay with their provider for the time being," said Kirkeby. "However, there is still strong interest among consumers in promotions that couple wireless service plans, which typically have a fixed number of minutes, with traditional telephone service, providing optimal savings."

Study results by region are:

Northeast Region: Verizon ranks highest, outperforming other carriers in billing, image, cost of service and offerings and promotions.

Mid-Atlantic Region: AT&T ranks highest, with top ratings in all six factors.

Southeast Region: AT&T ranks highest, performing particularly well in image and billing.

North Central Region: TDS ranks highest, receiving top ratings in the performance and reliability and cost of service factors.

Southwest Region: AT&T and SBC tie to rank highest in the region. AT&T receives the highest ratings in the region in image, cost of service and offerings and promotions, while SBC receives top ratings in the performance and reliability factor.

West Region: Cox Communications ranks highest, receiving top ratings in all six factors. Cox is the only cable company receiving a top regional ranking in the study.

The 2005 Residential All-Distance Telephone Customer Satisfaction Study is based on responses from 10,292 customers nationwide who receive their local and long distance service from one provider.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, BusinessWeek and McGraw-Hill Education. The Corporation has more than 280 offices in 37 countries. Sales in 2004 were $5.3 billion. Additional information is available at http://www.mcgraw-hill.com.

J.D. Power and Associates Media Relations Contacts:
John Tews                        Michael Greywitt
Director, Media Relations        Director, Media Relations
Troy, MI 48098                   Westlake Village, CA 91361
248-312-4119                     805-418-8526
john.tews@jdpa.com               michael.greywitt@jdpa.com

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