J.D. Power: Prepaid services get high marks

Customer satisfaction in the prepaid sector has increased considerably since last year, driven by new pricing options and services, according to the latest survey by J.D. Power and Associates.
Overall satisfaction got a boost of 10 points on the company’s 1,000-point scale, with cost of service in particular showing the largest increase in satisfaction. J.D. Power said that contributing factors to the cost of service satisfaction increase were “improvements related to the cost/value relationship of airtime minutes offered for the price paid, and fairness of charges for calls made while roaming outside the local calling area.”
Customers also reported improved call quality and the ability to make and receive calls within buildings, as well as perceived size of the local calling area.
Virgin Mobile USA L.L.C. outperformed other prepaid competitors in the space for a second year, ranking high above the industry average index score on J.D. Powers’ scale. Virgin Mobile USA scored especially well in areas of cost of service, account management, initial activation and service plan options.
“By providing its customers with positive service experiences, Virgin Mobile continues to differentiate itself from the competition in areas related to support functions,” said Kirk Parsons, senior director of wireless services for J.D. Power.
Virgin Mobile USA had an index score of 758, and its closest competitors-Boost Mobile and AT&T Mobility’s GoPhone offering-came in at 729. T-Mobile USA Inc.’s T-Mobile To Go service had the third-highest score and stayed above the industry average of 727.
Meanwhile, prepaid offerings from Tracfone Wireless Inc., Alltel Corp. and Verizon Wireless fell below the average. Indeed, Verizon Wireless, for once, found itself bringing up the rear. The carrier typically ranks among the top providers of postpaid service.
The survey also found that:
–Prepaid users spend about $38, on average, when purchasing additional airtime. They report using about 218 minutes per month. Postpaid users average about 528 minutes of use per month.
–Nearly 60% of prepaid phones with prepackaged minutes are bought at retail stores, with another 25% purchased via the Internet. About 16% of customers bought minutes separately from their wireless phone.
–It’s a toss-up as to whether customers top-up their wireless minutes by purchasing a card through a local retailer or going through a provider’s Web site. J.D. Power found that 36% of prepaid customers went for the cards and 36% used the Web. Meanwhile, the percentage of customers who used their handsets for top-up increased from 10% in 2006 to 13% this year.
Despite the improvements in prepaid customer satisfaction, Parsons cautioned that “customer expectations will continue to rise as wireless users increasingly rely on the communication functions of their cellphones beyond voice calling. With the addition of features such as unlimited text messaging and video-sharing plans, prepaid service offerings are beginning to match postpaid offerings, which will contribute further to the increase in customer expectations.”
This is the second year of the prepaid survey. Results were based on feedback from nearly 3,000 prepaid wireless users gathered in January and April of this year. The study measures customer satisfaction in seven areas, weighted by importance in the following order: call quality, company image, cost of service, account management, initial activation, service plan options and customer service.