Customers give home phone firms thumbs down

With cash-strapped phone customers bracing themselves for yet another round of price increases, the latest uSwitch.com Home Phone Customer Satisfaction Report reveals the first drop in customer satisfaction in three years. Sky, the newest competitor in the poll, wins ‘Best Overall Provider' while BT, the oldest contender, comes bottom for the fourth year running. Overall the survey shows customer service dropping 2%, with just 58% of customers now satisfied, and satisfaction with value for money dropping to 64% from 67% last year.

The survey of over 7,500 customers comes as BT, TalkTalk and Virgin Media introduce price increases of as much as 16% to line rental, daytime call rates or call set up charges from as early as 1st April. But, for some customers, this is the second wave of price increases in just seven months, having already undergone a round of painful hikes in September 2010. As a result, the true increase to some rates is as much as 31% in only seven months.

Winners and Losers in the uSwitch.com Customer Satisfaction Report

For the fourth time in a row, Sky is voted ‘Best Overall Provider' with 84% of its customers satisfied. The company wins 9 out of 10 categories including Best Value for Money and Most Likely to be Recommended. Sky is the youngest of the four major home phone companies included in the rankings. Formed less than five years ago, it now has almost three million customers signed up to its Sky Talk home phone service and is the only one of the Big 4 not to raise prices this Spring.

Sky's traditional arch-enemy, Virgin Media, is runner-up for Best Overall Satisfaction, overtaking TalkTalk by a mere 1% to see 76% of customers satisfied overall. Virgin Media wins three awards including Best Customer Service. But its 4.3 million phone customers have seen their line rental rise 6% this month and the company takes third place for value for money satisfaction behind Sky and TalkTalk.

For the fourth time running, BT received the lowest score for Overall Customer Satisfaction in the poll, but has seen improvements to place it above TalkTalk in both the Customer Service and Likely to be Recommended category. The UK's incumbent phone company has come last in 8 out of 10 categories and has the lowest score for Value for Money for the 8th time running. From 28th April, BT customers will see line rental rise 2% and both daytime call rates and call set-up fees rise 9%.

TalkTalk comes third with 75% of its customers satisfied overall, but has seen its satisfaction scores drop across the board. Plagued by problems since the acquisition of Tiscali in 2009, its score for customer service has dropped from 59% to 50%. TalkTalk won Best Value for Money last year, but its score in this category has now dropped by a massive 10% from 84% to 74%. Hot on the heels of BT, the company has announced a series of price increases over the last year and from 1st May, customers will see line rental rise 2%, daytime call rates rise 16% and call set-up fees rise 12%. TalkTalk's dip is most visible, however, in the Most Likely to be Recommended category. Having come second last year with a score of 70%, it has fallen to last place this year with just 54% of customers prepared to recommend the company to a friend.

Ernest Doku, technology expert at uSwitch.com, comments: "As if the VAT increase wasn't enough of a blow to customers, this latest round of price rises well and truly sticks the knife in. Customers have witnessed a double whammy of increases over the last seven months, and, if this pattern continues, they could well be in for more price rise misery in October.

"It's true that the telecoms industry is under pressure to invest in the roll-out of broadband to rural areas. It seems though that home phone rather than broadband customers could be paying the price. Hardest hit are those who are at home during the day and rely on their landline to make and receive the majority of their calls, such as the elderly and vulnerable. It's really important that they make sure they are on an all-inclusive calling plan if they want to escape these hikes.

"The best advice to keep bills down is to look at when you make the most phone calls and make sure that you are on a calling plan that fits this picture. It could be well worth moving to a deal that offers free evening and weekend calls, or for those at home all day, free ‘anytime' calls.  If you just need line rental, consider moving away from the ‘Big 4' to a company such as Primus which offers line rental for £6.79 a month, instantly saving £85 a year against the most expensive provider."