CFI Group: Consumers Still Like Telcos Better

A new study finds consumers prefer to bundle communications services with telcos, rather than cable operators, if they have that choice.

The data has changed little from CFI Group’s 2007 survey on the same topic.

CFI Group, a consultancy that measures customer satisfaction, said consumers chose telcos by a 2-to-1 margin. That’s because they felt cablecos charge too-high rates and provide poor customer service, according to the study. Respondents also said they need faster Internet access and identified video services such as AT&T Inc.’s  (T) U-verse and Verizon Communications Inc.’s (VZ) FiOS as attractive products. Two percent of the more than 1,200 households surveyed already use telco video, CFI Group said.

“The cable companies are asleep at the wheel if they don’t see the threat from the telecoms,” said Phil Doriot, program director for CFI Group. “But the network upgrades aren’t going to happen overnight, so cable companies still have the opportunity to improve their customer service and cover their Achilles heel.”

The survey further found that telecom carriers have an advantage over cable in the form of wireless service.

“Without a wireless play, cable companies aren’t future-proofing their bundles, but new technologies like WiMAX might change the game,” said Doriot.

Still, telcos with wireless offerings have to watch for churn. CFI Group said its research showed customers switch wireless providers for better rates, better plans and better coverage.

CFI Group used the methodology of the University of Michigan’s American Customer Satisfaction Index for its survey.

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