News

Study: Modem Users Get (Some) Satisfaction

12/05/1999 7:00 PM Eastern

While most cable-modem customers are satisfied with their
online hookups, there's room for improvement, according to a recent Cable &
Telecommunications Association for Marketing study of current and prospective cable-modem
customers released last week.

A total of 84 percent of those surveyed said their
high-speed service met or exceeded expectations. Of those, 41 percent said the service was
what they expected before signing up, while 43 percent said it was better than they'd
figured. And 74 percent had already recommended cable modems to friends, relatives or
co-workers.

But 40 percent of customers expressed at least some measure
of dissatisfaction with the service, according to AT&T Broadband & Internet
Services vice president of strategic research Pete Gatseos, who co-chaired the CTAM
Research Committee at the time the study was developed.

"You really don't want to have that high a percentage
of customers unhappy with you," Gatseos said. "It hurts your ability to sell
other services."

Because those who choose cable modems tend to be
higher-than-average Internet users, they tend to notice problems like service outages more
often than others might, Gatseos said. They tend to be daily users of online services, and
they might notice outages even more frequently than they would with cable television.

CTAM surveyed 3,495 current cable-modem subscribers in 19
markets across the country during July, August and September. The study also looked at
prospective data customers in five markets, surveying consumers after they saw high-speed
cable-modem demonstrations in retail settings.

Competition from digital-subscriber-line services was
active in all of the markets CTAM surveyed, vice president of research Barbara Gural said.

The survey was designed to determine what market share a
cable-modem-service provider might expect for various offers. Variables included speed,
modem price, monthly subscription fee, installation charge and number of e-mail addresses
offered.

"Everybody is touting speed as the key driver in
people's signing up," Gural said, "but that's not the only driver. Other
attributes can affect a person's decision to go with a competitor -- particularly if they
limit a person's online time."

Still, 59 percent of current customers and 74 percent of
prospects cited speed as the primary reason for subscribing to cable-modem service.

Of current cable customers, 91 percent said they intend to
continue subscribing during the next six months. Asked why the other 9 percent didn't
intend to keep their cable-modem service, a CTAM spokeswoman said, "That's valuable
information worth paying for" -- in other words, buy the report.

CTAM has already met its sales quota for the study,
although the association expects it to appeal to other companies, including hardware
vendors, programming networks and even cable competitors such as telephone companies.

The study costs $6,400, and it is available only to CTAM
members, although nonmembers can join before buying the survey. Additional copies are
available for internal distribution within a member's company for $125 each.

The study includes an interactive market simulator, along
with a PowerPoint presentation. Study subscribers can contact CTAM about having its staff
conduct companywide presentations.

Gatseos said the high-speed customer-satisfaction survey
was more hard-hitting than the typical CTAM study. "There's certainly a wake-up call
here for better customer service" from cable-modem-service providers, he added.

CTAM has not yet determined whether this will be an annual
study. The research committee meets again in February to discuss the matter.

If the study is repeated, Gatseos suggested that CTAM look
more closely at the needs of multiple-PC owners who want less expensive cable-modem
service on a second computer.

This year's survey discovered that 54 percent of current
cable-modem users are very or somewhat interested in connecting more than one computer in
the home to the high-speed Internet service.

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