Dial-Up Users Happier Than Broadband Users

    September 19, 2007

High-speed Internet service continues to attract new subscribers, but satisfaction measurement for high-speed customers indicates that service providers are not making significant progress in producing loyal customers, according to the J.D. Power and Associates 2007 Internet Service Provider Residential (ISP) customer Satisfaction study out today.

The study found that 42 percent of high-speed customers are loyal to their ISP, while 51 percent of dial-up users are loyal to their ISP. Overall satisfaction is also higher among dial-up users than high-speed users, increasing 13 points from 2006 to 709 on a 1,000- point scale in 2007. Customer satisfaction of high-speed users has declined by 13 points since 2006 to 680 in 2007.

"Although high-speed subscriptions continue to increase annually-to 65 percent of the market in 2007-more than one-third (35%) of Internet service subscribers still use a dial-up service," said Frank Perazzini, director of telecommunications at J.D. Power and Associates.

"The cost of high-speed Internet is up nearly $2 per month since 2006, averaging $44.09 in 2007, yet dial-up service costs have dipped $0.12, averaging $17.81. As long as high- speed Internet prices continue to rise and dial-up providers offer a viable level of service at a low price point, significant market opportunity will continue to exist for dial-up service."

In 2007, 70 percent of households with high-speed service report they had outages, while only 51 percent of households with dial-up service reported the same. Over the past 12 months, only 9 percent of dial-up users switched Internet providers. Among dial-up users who did switch providers, 74 percent switched to another dial-up service.

The study also found that Internet service subscribers are more likely to use other Web-based email from a third-party provider, such as Google Gmail, MSN Hotmail, Yahoo Mail or AOL Mail, as their main email service instead of the email from their ISP. Web-based e-mail usage is much more common among high-speed subscribers (63%) than dial-up (38%).

"Web-based e-mail users can now switch ISPs without the fear of losing a long-standing e-mail address," said Perazzini.