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Cell phone survey shows major problems with service persist


January 4, 2005
CONTACT:
Lauren Hackett (914) 378-2561 (hackla@consumer.org) or
Jennifer Shecter (914) 378-2402 (shecje@consumer.org)

CONSUMER REPORTS’ ANNUAL CELL PHONE SURVEY SHOWS NO MEANINGFUL IMPROVEMENT IN SERVICE SINCE 2001 BENCHMARK STUDY
Merging Cell Service Providers Are Among Lower-Rated; Report Also Includes First-Ever VoIP Tests; Tips to Save Money on Service; Handset and Headset Buying Advice and Ratings

YONKERS, NY — Consumer Reports’ annual cell phone report shows that consumers experienced chronic, major problems with service, billing, and complaint handling with every national wireless carrier. The survey, conducted last September and based on the experiences of over 39,000 ConsumerReports.org subscribers in 17 cities, indicates that overall levels of satisfaction for wireless service remain lower than for most other services that Consumer Reports rates. The report also shows that Consumer Reports’ overall satisfaction index has only nudged one point, from 65 to 66 points, since the annual survey was begun three years ago.
Although Verizon topped Consumer Reports’ Ratings in each city, as it did in the previous two surveys, it wasn’t problem-free. And in 10 cities it wasn’t ahead of the pack in a statistically meaningful way. In most of the 17 cities, T-Mobile came in a close second. Some other highlights from the survey include:
• Thirty-five percent of respondents were seriously considering a switch of carrier. Most of those who had already switched said they were after better service.
• Nearly 70% of those who use a cell phone frequently had at least one dropped call in the week before the survey. Nearly 60% said they had a bad connection.
• Only 40% said the company’s response to a billing inquiry was very helpful.
• And only 31% said the company’s response to a service inquiry was very helpful.
“Our survey findings are particularly troubling in the context of the recent spate of mergers within the wireless industry, which we believe will lead to decreased competition and increased prices,” said Jim Guest, President of Consumers Union, nonprofit publisher of Consumer Reports. “Consolidation is not a panacea to the service and customer satisfaction problems that continue to plague the industry. In the case of the Cingular and AT&T, both companies had problems with overloaded circuits. We don’t see how a merger could improve that.”
For the first time ever, Consumer Reports asked subscribers about their shopping experiences. Respondents complained of the challenges associated with shopping for a wireless plan. At least 83% had some trouble shopping for wireless phone service and 52% complained that they had to sign up for a long contract to get the best price on a phone. When trying to compare plans from competing carriers, 48% said it was hard, and 43% also found it difficult to figure out the true cost of the service.
VoIP: Internet Phoning
Phone service over the Internet, properly known as Voice over Internet Protocol or VoIP, is now being offered by just about every major telecommunications and cable TV company. But Consumer Reports’ first-ever tests of VoIP show that although there are some advantages, consumers still have a lot to consider before giving up their landline. The February issue of Consumer Reports found that consumers who spend $60/month for local and long-distance may save money with VoIP, but:
• Installation difficulties, voice quality, and incoming call problems put VoIP behind landlines.
• VoIP does not provide reliable access to 911 in an emergency.
Tips to Save Money on Service
As phone rates have steadily declined, consumers have snapped up more and more minutes of telephone time. Households with landline and wireless service shell out more than $1400 a year according to one industry estimate. Average callers, defined as those who use 70-110 long-distance minutes on a landline and 400-900 wireless minutes, are spending around $120 a month. Consumer Reports recommends the following tips for average callers looking to save money:
• Use a wireless phone for long-distance calls.
• Avoid landline plans that involve a monthly fee on top of charges for calls made.
• Know how much phone time is really used and scrap plans getting the least use.
• Consider cheaper alternatives like a calling card.
Consumers should also be aware of cell-service “gotchas.” Consumer Reports recommends:
• Take advantage of the trial period to assess service carefully.
• Sign up for the shortest contract, even if it means paying more for the phone, because it provides the fastest way out if service deteriorates.
• Read all the terms and conditions before signing up.
• Beware of signing up for service through a company other than the carrier.
Some agents impose cancellation fees on top of the carrier’s cancellation fees.
Consumers can also access a free interactive worksheet on www.ConsumerReports.org that presents other money-saving strategies for phone service and a guide to deciphering cell-phone bills.
Handset and Headset Ratings
Consumer Reports February issue also includes ratings of handsets from the major carriers including a closer look at the two predominant technologies: GSM, which gives better global coverage, and CDMA, which can give better coverage in rural areas. The package reviews some of the most popular extras that cell phones offer and outlines the associated costs, including custom ring tones, text messaging, web browsing and games.
Consumer Reports rated the Belkin ActiFlex Boom F8V920-AFB ($20), which connects to phones with a standard connector, as the top-rated headset. For headsets using Bluetooth technology, the Jabra FreeSpeak BT 250 ($100) is a better choice than the higher-priced Plantronics M3500 ($150).
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FEBRUARY 2005
© Consumers Union 2005. The material above is intended for legitimate news entities only; it may not be used for commercial or promotional purposes. Consumer Reports® is published by Consumers Union, an expert, independent nonprofit organization whose mission is to work for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves. To achieve this mission, we test, inform, and protect. To maintain our independence and impartiality, CU accepts no outside advertising, no free test samples, and has no agenda other than the interests of consumers. CU supports itself through the sale of our information products and services, individual contributions, and a few noncommercial grants.

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