Computer Weekly recently compared the behavior of cellular customers in the UK from before the pandemic and after the pandemic. The analysis compared cellular customer usage from November 2019 to November 2021. Ookla took the findings and also looked at Switzerland and the U.S. to see if there were similar trends. The analysis revealed some interesting trends in mobile broadband usage that I think have implications for ISPs.
The percentage of consumers who describe themselves as always online grew from 30% to 69% during the pandemic. The analysis looked deeper at the reasons customers considered themselves as always online. Users who were always online for economic reasons (employment, traffic, remote working, social media, and information sharing) dropped from 16% of all users to 7%. However, the percentage of users who were always online for lifestyle reasons (parenting, caregiving, health and fitness, and gaming) grew from 3% to 32%. There has been an obvious shift in the reasons people are using the Internet.
By 2021, users who identified as always online were twice as likely to have reported an issue to customer service. About one-third of cellular customers are unhappy with customer service. The study looked at a wide range of the expectation that customers have for a customer service interaction, including the clarity of communications, the feeling that the carrier valued users as customers, the availability of multiple options for communicating with customer service, and how quickly issues were resolved.
Always online consumers have a higher expectation for the customer service interaction. They were more bothered by things like long wait times or customer service staff that doesn’t have the expertise to resolve a problem immediately.
One of the most interesting findings is that almost half (47%) of customers who had a customer service issue in the past 18 months either have switched or want to switch to another cellular carrier. I don’t recall a major survey that had a similar finding from before the pandemic and I wonder if people’s expectations have changed during the last few years. It’s certainly possible that the isolation of the pandemic made folks more dependent on broadband, which translates into a lower tolerance for poor service.
This finding is probably not news to cellular carriers – but it’s clear that carriers that want to keep the most active users need to step up the customer service game. I’ve heard several presentations in recent years that claimed that cellular companies spend as much as $350 on average to get a new customer. That’s a large number, especially considering that all it takes to lose many customers is a single negative customer service interaction.
How might all of this apply to broadband? First, it’s becoming clear that people are using broadband more, and I’m sure that the percentage of people who would say they use broadband for most of the day has also increased during the pandemic.
It’s probably not a big stretch to say that the customers who use broadband the most have the highest expectations for the performance of an ISP network and for the ability of customer service to resolve issues. Unfortunately, the large cable companies and telcos have the lowest-rated customer service in the country. To be ranked at the bottom can only be due to an accumulation of poor customer service experiences with customers.
It’s not as easy for most customers to change ISPs as it is to change a cellular carrier since in many markets there is only one ISP with a network fast enough to satisfy the heavy broadband users. But that doesn’t mean that customers don’t want to leave – and they will leave if they get another broadband choice. My consulting firm does surveys, and I invariably find that at least 30% of the public in every market are ready to change to a theoretical new fiber ISP, meaning that they are unhappy with the incumbent cable company. In some markets, this is much higher, and during the last year, I’ve worked in a few cities where more than 60% of existing broadband users said they were ready to change to a new ISP.
Many markets are going to see new competitors in the next few years. There will be almost ubiquitous FWA cellular broadband in most cable markets. It will be interesting to see how many people will bail on the existing cable company to change to 100 Mbps cellular broadband. If we believe all of the press releases of the big telcos and others, there is also a huge amount of fiber overbuilding underway across the country. It’s going to be interesting to see how many people will bail from a cable company to a fiber ISP. It can’t be good news for the cable companies if the trend for landline broadband is similar to cellular broadband, where half of its customers are ready to bail after a bad customer service experience.
I donno … reading the various monopoly analysis books that are out now (eg., The Myth of Capitalism by Tepper and The Profit Paradox by Eekhout) doesn’t encourage the idea that ISPs are suddenly going to become more competitive. The basic premise is that the parties that are engaging in monopoly market segmentation (57% of Americans have only one viable high speed ISP choice) get more from their monopoly holdings than expanding their market with competitive offerings. Monopoly/duopoly/oligopoly raises profits, supresses wages, and increases prices. And, it’s often explicit but also implicit cartel behavior.
Hard to believe that’s going to be something the big ISPs walk away from without significant government engagement.