Competitive pricing strategies have contributed significantly to a steep increase in the average number of minutes used per month by wireless consumers, according to J.D. Power and Associates’ “1999 Wireless Customer Satisfaction Study.”
Minutes of use increased from 199 per month in 1998 to 242 per month in 1999, the study said. This upward trend could continue because consumers report having more than 300 minutes per month available with their calling plans.
The best example of the impact of pricing strategies can be seen with AT&T’s Digital One Rate plan, which offers free long-distance and no roaming charges, said J.D. Power. This plan, coupled with its strong brand recognition, has propelled AT&T to the forefront in customer satisfaction in nine of the 13 markets surveyed where AT&T operates.
In Denver; Las Vegas; Miami; Minneapolis; Pittsburgh; Portland, Ore.; Sacramento,Calif.; Tampa, Fla.; and Washington/Baltimore, AT&T ranked highest in customer satisfaction, said the study.
Bell Atlantic Mobile, which offers a regional version of a single-rate plan, took the lead in overall customer satisfaction in the Northeast. In Los Angeles, San Diego and Seattle, AirTouch Communications Inc. was the leader.
The study also found that average monthly wireless household expenditures have remained fairly flat for the past two years, with the 1999 level at $64 per month. About one-half of the wireless users surveyed said they receive discounted or free minutes, and more than one-third said this incentive has led them to use their wireless service more often during the discounted time periods.
“The trend of simplicity in pricing and the inclusion of larger amounts of airtime has benefited the consumer, who sees wireless service becoming more and more affordable,” said Joan Barten Kline, director of research and operations for the telecommunications services group at J.D. Power. “From the carrier perspective, as the national programs expand their reach, smaller local/regional providers will find it more difficult to compete with national carriers that have broader networks to support their value-added services, such as free long distance and no roaming charges.”
Approximately 43 percent of households with incomes above $25,000 reported having a wireless phone, increasing from 35 percent in 1998, said the study. An additional 8 percent of households surveyed indicated they plan to subscribe to wireless service within the next year, and about 15 percent of wireless households reported having service from more than one provider.
