J.D. Power and Associates: LTE Meets Expectations, Other Network Technologies Disappoint

Carl Weinschenk

Carl Weinschenk interviewed Kirk Parsons, senior director of wireless services at J.D. Power and Associates. In late August, the company released its “2012 U.S. Wireless Network Quality Performance Study—Volume 2.

Customer satisfaction is higher on LTE networks than on slower platforms that call themselves 4G, according to a study by J.D. Power and Associates. The reason most likely is that LTE enables operators to actually deliver what the marketing departments tell customers is available. Parsons told IT Business Edge blogger Carl Weinschenk that LTE networks increase network usage and drives revenues.

Weinschenk: Describe the research, please.

Parsons: The study is the “Official 2012 Wireless Network Quality Study: Volume 2.” Every six months we conduct daily interviews with an online panel trying to measure the current experience of wireless customers and their network quality experience. We ask folks to measure any problem, such as dropped calls, initial disconnects, audio issues, voice mail issues, text messaging issues, data issues — such as slow Web connections or failed connections — and email issues. We’ve done this study for 10 years.

Weinschenk: Was anything different this year?

Parsons: The theme [this year] was the fact that we have collected enough surveys now to look at the different technologies, especially 4G LTE. Verizon was first, about a year ago. AT&T was right behind. Now Sprint is to start offering LTE. Most of the information in the report is based on Verizon and AT&T customers.

Weinschenk: What did you find?

Parsons: We at least initially found that incidents-per-100 [operations] — the average incident rate — was much lower than other 4G-enabled technologies such as HSPA+ or Sprint’s WiMax system.

If you think about the marketing that’s going on for last year, the use of the 4G acronym is kind of loosely used; it’s not technology-based. The real 4G LTE from the customer experience point-of-view has lower problem incidence than other services. It also claims to be much more efficient on spectrum and on data and quickly downloads and uplinks. That is exactly what customers we talked to experienced.

Weinschenk: Can you give me an example?

Parsons: For instance, the diagnostic of connecting to the Web and trying to get on the Internet with 4G LTE was 15 [per 100]. When we looked at “faux G” services like HSPA+ and WiMax, it was 22 and 23.

Weinschenk: Such problems certainly will be frustrating to subscribers.

Parsons: The wireless industry is famous for getting ahead of the curve relative to expectations. The fact that when talking about devices, they talk about all that they can do with them. But people still experience blocked calls. People still are experiencing that despite the problems with other things. The experiences are not quite there yet. LTE is the closest to being there.

Weinschenk: What is the importance of these metrics?

Parsons: It is important because it impacts brand loyalty or churn. The better a network is, the more folks tend to do. They call more, use their phone more and get charged more. Carriers get more money. It is really is to carriers’ advantage to upgrade. It is a lot cheaper to run the network in the long term. You can offer better service, you can load more expensive devices and therefore charge more. The recoup of investment tends to be higher on the 4G compared to 2G or 3G. The numbers we ran among 4G spending is higher, churn rate lower on 2G versus 3G.

Weinschenk: Are things the same all over the country?

Parsons: From a ranking perspective, there are six regions … They are pretty consistent from a ranking perspective. Verizon Wireless lower per-100 scores — and again, lower scores are a good thing. That’s no surprise because they’ve had it longer. They walk the walk and talk the talk. They are communicating the fact that they have a better network for years now. That’s true. We see it in the numbers consistently.

Regional scores tend to be relatively the same. The lower mid-Atlantic and North Atlantic had 11 problems per hundred. The north central region had 11, with the highest being a couple of 13s. The Northeast and the Southeast and the West all were at 13.

You typically look at metro versus non metro. Metro has higher problem per 100 score. They experience more problems. There are problems with higher traffic, the topologies are more challenging. San Francisco not only has taller buildings, for instance, but tough topology.

Weinschenk: How are things progressing on an industry-wide basis?

Parsons: Over time, the industry has improved in terms of problems. Incidences have gone down by a fair amount. When we started doing the study it was in the high 30s, low 40s [problems per 100]. Now down to 12 nationally. It’s obviously going in the right direction. We find that the industry hits an inflection point then levels off. With LTE advancement, we saw a dip to 14 per 100 six months ago, now it is 12. I predict scores will go down over the next couple of reporting periods. If you look at it per month, you do see spikes occasionally. There are blackouts, for instance. But the spikes are very short lived. It’s a living, breathing thing.

Weinschenk: What would you say the major takeaway is?

Parsons: The one major takeaway is that networks are getting better. For 4G LTE, what they are advertising is what customers are experiencing. They are advertising fast connection speeds. We are seeing that.

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