‘Virtual’ phone companies winning against big networks
Plucky stars Virgin and Tesco are stealing a march on the established mobile networks, according to the first ever Mobile Phone Customer Satisfaction Report from uSwitch.com. Virgin Mobile has been rated Best Network amongst contract customers while Tesco Mobile comes top for pay as you go - even though both survive by piggybacking off established network giants. But, while the winners are leaping forward with new initiatives to win the hearts of consumers, service levels across the board remain meagre with less than 6 out of 10 (58%) satisfied with customer support and just 68% feeling that their provider offers good value for money.
Best Network - Virgin Mobile is rated top by those on a phone contract while Tesco Mobile scores best amongst pay as you go customers. The two companies have shown the ‘Big 4' networks a clean pair of heels despite being the only two virtual network operators (MVNOs) in the poll. Since entering the market in 1999, Virgin Mobile has offered consistently cheap line rental, first class customer service and a user-friendly website. Virgin may not have the headline handsets, but it has been able to secure exclusives that are out of the reach of the network giants. Initiatives such as teaming up with Nokia on V Festival phones have given customers a unique range of devices to choose from. Virgin Mobile has swept the board, winning six out of the nine awards for pay monthly operators including Best Value for Money and Best Customer Service.
Tesco Mobile has also made a determined, aggressive push to become a major industry player since it launched in 2003. In league with the brand, Tesco Mobile has championed value and undercut the competition with an impressive range of affordable handsets whilst also offering supermarket style incentives, including Clubcard points. The newcomer has won five pay as you go categories including Best Value for Money and Best Choice of Handsets. Its network rivals face further pressure as the company strives forward in its ambitious plans to grow contract sales in much the same way.
Lowest scores - despite being runners up for Best Value for Money, pay monthly customers have given 3 Mobile the lowest overall score. The network comes bottom in four categories including Customer Service and Network Coverage. Just 55% of Three's customers surveyed are satisfied with the customer support - possibly scarred from call centre and reception issues experienced when the network was still in its infancy, or needing tighter hand holding to get to grips with data-driven features such as Skype and Windows Live Messenger. Things may change with Three's concerted attempt to appeal to smartphone users - its new all-you-can-eat ‘One Plan' offers 2,000 minutes, 5,000 texts and 1GB of internet from as little as £25 per month. By pairing the One Plan with all manner of handsets - including the new iPhone 4 - Three is aiming to offer as compelling a package for voice and messaging as it has for data and this could turn reverse customer perceptions.
T-Mobile takes the bottom spot for pay as you go customers, losing three categories including Network Coverage and Handset Choice. Despite being considered as one of the big four, the delay in securing popular handsets first and stocking the simplest of handsets for the prepay crowd has seen the magenta network fall out of favour with consumers. T-Mobile recently finalised its merger with Orange to form Everything Everywhere, the UK's largest mobile phone operator. But, with Orange ranked just fourth amongst pay as you go customers, the new management team could have its work cut out.
Network coverage - O2 is rated Best for Network Coverage amongst pay monthly customers with 80% satisfied, while 3 Mobile comes last in this category with just 60% satisfied. Pay as you go customers, however, give Tesco the highest score for network coverage (80%), despite the fact that the operator piggybacks off the O2 network. T-Mobile is rated worst for network coverage amongst pay as you go customers with just 60% satisfied. Interestingly, 3 Mobile and T-Mobile, the two losers in this category, share the same 3G infrastructure. 3 Mobile launched the UK's first 3G network which is now estimated to cover 95% of the population, but its low score suggests that core functions such as calling and texting, which are not 3G applications, are still the priority for consumers over add-ons such as web browsing.
Value for Money - with customers spending an average of £15 a month on their mobile phones, there is a great difference in the value for money they are receiving. Virgin Mobile, offering customers 200 minutes of talk time for £15, is voted Best Value for Money in the pay monthly category, while Orange, offering just 100 minutes for the same price, comes bottom. Overall, the 52% of customers that have a monthly contract are more satisfied with the value they get from their phone than those on pay as you go - 73% are satisfied compared to 65%. But, with five million customers (10%) still not satisfied, the pressure remains on all operators to keep offering their customers a good deal.
Best Perks - all the phone operators are competing hard to win new customers and retain existing ones with a variety of ‘freebies' and incentives over and above the basic elements of their tariff. However, the report shows a considerable difference in their popularity. With bonus Clubcard points and in-store incentives, Tesco Mobile has swept in to win the Best Perks category whilst Vodafone comes bottom. But Vodafone has recognised its lack of competition against Orange's 2-for-1 cinema ticket offer or O2's Priority gig passes by recently launching a new ‘VIP' service, giving customers front row access to fashion events, Formula 1 races and a host of music festivals.
Ernest Doku, communications expert at uSwitch.com, comments: "In such a saturated market it's remarkable to see new entrants sweep in and steal the glory. Customer satisfaction is not rocket science but networks have taken a long time to get it right. Our hats go off to the new operators that recognise that customers want more than fancy marketing.
"Customers need to see beyond the glitz. The winning formula includes an interesting range of handsets, tariffs that offer real value for money, backed up by first class customer service and a user-friendly website.
"Established carriers would do well not to forget their existing customer base in the quest for new sign-ups. Dedicated helplines and perks for loyal subscribers are equally as important as securing the latest handsets or offering freebies in appealing to price conscious shoppers."