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Our love-hate relationship with cell phones

In the last three years, more people complained to the Better Business Bureau about cell phone companies than any other industry. ConsumerMan by’s Herb Weisbaum

We love our cell phones. Most of us couldn’t imagine getting through the day without them. But many of the 250 million subscribers in this country are less than thrilled with their wireless phone company.

In the last three years, more people complained to the Better Business Bureau about cell phone companies than any other industry — and the bureau tracks more than 3,800 industries!

Unhappy customers are annoyed by dropped calls, static, and poor coverage. They’re frustrated with billing errors that often seem impossible to resolve and customer service representatives who can’t help or don’t seem to care.

Consumer Reports says cell service is one of the lower-rated services it surveys. It’s been that way for the past six years.

For its annual report on cell phone service, published in the January 2008 issue, the magazine surveyed 47,000 readers. Fewer than half of the respondents were completely or very satisfied.  Based on this feedback, the editors conclude that cell phone service “seems to stubbornly resist improvement.”

As you might imagine, the wireless industry hears things differently. Joe Ferran, a spokesman for CTIA — The Wireless Association, says you’d get more favorable results if you surveyed the general public and not readers of a specific publication.

I’m not so sure. Consumer Reports is not alone in citing widespread customer dissatisfaction. J.D. Power and Associates finds the same thing. “Wireless services tend to rate much lower than other industries, such as auto, finance, and health care, says Kirk Parsons, Power’s senior director of wireless services. “Typically, they’re in the bottom third of the overall rankings.”

CTIA’s Joe Farren says customer service is something carriers are always trying to improve. “In a competitive marketplace that has to be fixed or you’re going to have a problem,” he says. The question is, how long will it take the industry to fix its customer service problems?

But wait, there is some good news!
Wireless companies have spent billions of dollars the last few years to upgrade their networks. That investment is starting to pay off – fewer dead spots, fewer dropped calls, and less static.

“We do see improvement,” says J.D. Power’s Kirk Parsons. “It’s going in the right direction, but we still have a long way to go.”

The industry is also becoming more customer-friendly. The big companies just started to prorate their $150 to $200 early-termination fees. These steep penalties have kept many unhappy customers from switching to a competitor.

The major carriers have also announced they will stop forcing customers to extend their contract for two years just because they make a change to their service plan. These mandatory contract extensions were one of the top two complaints in the Consumer Reports survey, tied with the high cost of cell service.

And more change is on the way. Last month, Verizon Wireless promised to allow “open-access” to its network by the end of 2008. This means customers will not be forced to buy their phones from Verizon. They’ll be able to use any phone that is compatible with the Verizon Wireless network. AT&T already offers a wide open network. Sprint Nextel will launch one next year.

Why is the industry removing these strong arm tactics? Consumer Reports says they were pressured into doing it by a constant stream of lawsuits filed by consumer groups and state governments.

The Wireless Association says the industry is not reacting to lawsuits; it’s listening to the marketplace. “The customer is making his or her demands very clear and the carriers are responding,” says spokesman Joe Farren.

Verizon Wireless and Alltell had the highest overall scores in the 20 markets Consumer Reports surveyed. But T-Mobile was close on their heels. In most cities, it matched Verizon’s customer satisfaction rates. And the editors say T-Mobile plans “generally offer more for the money than those of Verizon and Alltel.

In a few cities, such as Philadelphia and Tampa, AT&T is also in the running. Even so, Consumer Reports says it “trails the better carriers in almost all respects.”

Sprint was the clear loser, rating the lowest in all of the markets surveyed except Minneapolis-St. Paul. Customers in most cities rated Sprint worse than the competition for dropped calls, customer service, and overall satisfaction.

Sprint also rated poorly in the latest J.D Power and Associates Wireless Customer Satisfaction Index. The survey, based on responses from 22,158 wireless users was released in October. Sprint rated lowest in every region of the country.

Sprint tells me the company has been working hard to improve its network and customer service. It’s opened a new customer service center and hired more service representatives.

“We believe this will pay off in better results in future customer satisfaction surveys,” says spokesperson Roni Singleton. “We still have some challenges, but we are planning an even greater emphasis on improving the customer experience.”

My two cents
When it comes to customer service, cell companies have talked the talk but have failed to walk the walk. Finally that’s starting to change.

One-sided contracts that hold customers hostage are going away. Customers will now have the ability to vote with their wallets. Carriers that don’t provide both reliable service and responsive customer support will lose business. That’s the way a free market is supposed to work.

We are all in debt to the consumer groups and state regulators who have spent years battling the cell giants to bring true competition and fairness to the marketplace.