Mobile and internet service providers

Our latest telco survey found 64% of consumers had experienced lengthy waits to speak with their internet service provider (ISP) in the past year. A third encountered unhelpful customer service once they made contact.

Some telcos struggled with business basics, such as ensuring their customers’ bills were accurate. One out of four consumers had encountered a billing dispute with their ISP.

Net satisfaction

Of the seven ISPs in our survey, Flip was best dressed: 64% of its customers were “very satisfied” with the service they received, compared with the industry average of 47%.

Flip was better than most across all performance measures. But its major strength was value for money: 77% of the company’s customers felt they got very good bang for their buck compared with an industry average of 40%.

Flip’s customers were also less likely than the average to encounter a billing dispute, unhelpful customer service or long wait times to reach a customer service representative.

Slingshot and Orcon were the next cabs off the rank. Overall, 58% of Slingshot customers and 53% of Orcon customers were very satisfied. Like Flip, Slingshot and Orcon are owned by Vocus Communications, the third largest broadband retailer in New Zealand.

The news wasn’t so peachy for Spark and Vodafone, the two largest players. Only 43% of Spark customers and 41% of Vodafone customers were very satisfied with their retailer.

Both companies scored comparatively poorly when it came to value for money. “Spark is adding services that we don’t want for free (Lightbox, Spotify, etc.) but I would rather pay less,” a customer remarked.

In addition, Vodafone’s customers were less likely to be very satisfied (and more likely to be very dissatisfied) with the customer support they received and the accuracy of their bills.

A third of Vodafone’s customers had encountered at least one billing dispute in the past year. “It is extremely difficult to know exactly what is going on with my statements and to ensure that I am getting the best deal possible,” a customer said.

Mobile satisfaction

Skinny Mobile (a division of Spark) had the most satisfied customers in the mobile market: 69% were very satisfied with the service they received. It did significantly better than the Spark mothership, which had an overall satisfaction rating of 53%.

Skinny was strong across all performance measures it was rated on. The company’s customers were also less likely to encounter problems, particularly slow or unhelpful customer service, incorrect billing and unexpected charges (see Consumer Trusted).

2degrees was runner-up in the satisfaction stakes with 59% of customers very satisfied. The company’s notable strengths were value for money and technical support. “Great service all round. Great value. Very helpful in-store staff,” a customer said.

Again, Vodafone lagged behind. Half of its customers were very satisfied, compared with an industry average of 54%.

In the past year, Vodafone’s customers were more likely than average to strike unexpected charges and inaccurate bills. To make matters worse, those who called with an inquiry were more likely to experience lengthy queues and unhelpful advice compared with customers of other retailers.

Switching companies

Internet companies

12% of consumers had switched internet providers in the past year. The top three reasons for switching were:

• found a cheaper plan (54%)
• found a better plan (32%)
• experienced poor customer service (22%).

It wasn’t always plain sailing for those who switched. 44% ran into problems, such as connection delays or billing issues, during the handover.

More than half of consumers (57%) said they were unlikely to change companies in the year ahead. Only 12% were very likely to switch. Vodafone’s customers were slightly less likely than the average to stay put.

Consumers had mixed views about the ease of switching. Less than half (48%) agreed it was easy to compare companies and services. About a quarter (27%) thought it was difficult. Those aged 60 years or older were more likely than others to think comparisons were tricky.

Similarly, about a quarter (24%) of consumers thought the switch itself would be problematic. Surprisingly, those aged 18 to 29 were more likely than others to think the switching process was tough.

Mobile companies

Overall, 55% of consumers had been with their company for five years or more. The percentage was higher among Spark and Vodafone customers: two-thirds had stuck with their companies for five years or more.

Only 9% of consumers had switched mobile retailers in the past year. A further 9% said they were very likely to switch in the year ahead. Despite its strong satisfaction ratings, a comparatively large proportion of Skinny customers (16%) were very likely to shift companies.

Overall, consumers were more comfortable weighing up mobile companies and services compared with internet companies and services: 60% agreed it was easy to navigate the mobile market. Skinny’s plans were considered significantly easier than others to compare.

The mobile marketplace

Of consumers with a mobile phone, 85% had a smartphone. But there was significant variation across age groups: 97% of consumers aged 18 to 29 years had a smartphone compared with 67% of those aged 60 years or more.

When choosing a mobile plan, call minutes followed by data allowance were the most important considerations overall. The number of texts bundled with the plan and add-ons, such as subscriptions to music streaming services, were next in line.

Priorities shifted depending on age. The majority (56%) of consumers aged 18 to 39 listed data allowance as the primary consideration when choosing a plan. Conversely, those aged 60 years or more tended to favour call minutes over other factors.

Most consumers (62%) had a prepay plan as opposed to a fixed- or open-term account plan. Consumers with prepay plans were more likely than those on account plans to agree they were getting very good value for money. Top-rated Skinny only sells prepay plans.

53% of consumers spent less than $20 per month on their mobile plan. Among Skinny’s customers, 80% spent less than $20 per month.

Consumers who spend more on their mobile plans usually receive extra benefits, such as greater data allowance. However, we found the more people spent, the less likely they were to agree they were getting value for money. For instance, only 34% of consumers who spent $61 to $100 per month were very satisfied with value for money compared with 53% who spent less than $20 per month.

Survey results