Telco vs. cable: The bundle battle continues

New data from CFI Group suggests that while cable TV companies may have had the early edge in getting consumers to buy their bundled services, telco may yet attain some revenge.

The CFI Group Telecom-Cable Industry Report found by surveying about 1200 households that higher customer satisfaction with telcos gives them a long-term advantage over cable companies. About 54% of households that said they were planning to buy a bundled service plan in the next 12 months told CFI surveyors they preferred to buy it from a telco. About 44% said they preferred the cable TV company.

The study used the University of Michigan’s American Customer Satisfaction Index (ACSI), the measurement tool developed by U of M professor Claes Fornell and his team at the university’s Ross School of Business in 1988. Fornell’s private firm CFI (Claes Fornell International) frequently teams with the Ross School and the American Society for Quality to deploy the ACSI to measure customer satisfaction and quality across a variety of industries and markets.

As part of the bundled services study, CFI Group also analyzed customer satisfaction for video, broadband Internet access, and wireless communications, finding that cable TV companies lagged telcos in all areas where they offer competing services. In broadband access, telcos’ DSL services scored 70 on a 100-point scale to beat out cable modem customer satisfaction, which came in at 66.

“For many customers, it’s a choice between the lesser of two evils, but our research suggests that telecom has an opportunity to take advantage of its relatively superior customer satisfaction,” said Phil Doriot, Program Director for CFI Group, in a press release. “That’s not to say that cable companies are out of the game. They’re just not accustomed to this kind of competition and have a lot of work to do if they want to keep customers from defecting.”