Which Wireless Customers Have the Most Problems?

By Markets Fool.com

The wireless customers who experience the most network problems also have the lowest tolerance for outages, dropped calls, slow data, and other issues, according to the recently releasedJ.D. Power 2016 U.S. Wireless Network Quality Performance Study Volume 2.

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J.D. Power found that customers living in urban areas had the biggest number of overall network problems, at 15 problems per 100 connections vs. 12 for people living in rural areas and 10 per 100 for those in the suburbs. Urban areas had the most problems of all three tested locales across all of the areas tracked in the study. For example, urban customers had a higher level of calling problems (19 per 100 vs. 13 for the other categories) with similar difference ratios in messaging and data issues.

Urban users are also much more willing to leave their carrier when experiencing problems, according to the study.

"Enhancing network performance to ensure customers consistently experience a high-quality connection -- especially those living in urban areas -- can substantially improve loyalty for wireless carriers," said J.D. Power Senior Director Kirk Parsons in a press release. "This can be accomplished by improving bandwidth efficiency, data connection speeds and reliability. To retain customers, carriers need to proactively expand and upgrade networks to align with the latest generation of services and devices, particularly those that rely on data speed and consistent connections, such as broadband devices."

Are urban networks actually worse?

J.D. Power's study, now in its 14th year, tracks 10 problem areas: dropped calls, calls not connected, audio issues, failed/late voice mails, lost calls, text transmission failures, late text message notifications, web/app connection errors, slow downloads/apps, and email connection errors. Scores are measured based on problems per 100 connections, with a lower score reflecting fewer problems and higher overall performance.

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The urban areas score lowest, but they are hurt by the fact that they are home to more younger wireless subscribers. Overall, 18- to 34-year-old customers experienced 17 problems per 100 connections whereas people 35 and older only had 10.

That's not because millennials complain more or have a lower threshold for problems. It's that they use their phones more, according to J.D. Power."Customers 18-34 received, on average, 39 text messages during the previous 48 hours vs. 14 text messages among those 35 years and older. Similarly, customers 18-34 connected to an app on their phone 15 times, on average, during the previous 48 hours vs. seven times among those 35 and older."

All carriers struggled in cities. Image source: Mike Mozart, Flickr.

Which carrier is the best?

J.D. Power based its report on responses from 43,300 wireless customers across six geographic regions: Northeast, Mid-Atlantic, Southeast, North Central, Southwest, and West.

Verizon(NYSE: VZ) scored the highest in five of the six regions "with typically lower PP100 scores than the regional averages in call quality, messaging quality and data quality." The carrier was only beaten by Telephone and Data Systems'(NYSE: TDS) U.S. Cellular brand, which took the top spot in the North Central region.

In most cases, the other three big carriers -- AT&T (NYSE: T), Sprint (NYSE: S), and T-Mobile (NASDAQ: TMUS) -- scored worse than the average score in all six measured territories. The only exception was Sprint, which had an 11 in the Southwest (the average was 12) and tied the average of 13 in the West region. U.S. Cellular was only ranked (based on the markets it serves) in the North Central area it won.

What does this mean?

In a broad sense, the report shows that all four big carriers have work to do when it comes to serving heavy-use customers in urban areas. Even though Verizon, AT&T, T-Mobile, and Sprint have all invested heavily in their networks, they still need to keep working on them in order to keep up with increasing data use.

"The finding underscores the importance of continued investment by carriers in urban areas as the use of 4G LTE compatible smartphones grows and customers expect faster data speeds," wrote J.D. Power.

Those demands are only likely to increase going forward, especially for Sprint and T-Mobile, which are pushing more customers to unlimited data plans. Verizon and AT&T will feel those pressures, too, as they begin to offer plans that eliminate overage charges or even possibly follow their rivals with unlimited deals.

Unhappy customers will leave. The J.D. Power study showed that 37% of customers in urban areas who experience overall network problems at a higher incidence than 12 per 100 connections said they "definitely will" switch carriers in the next 12 months. That number drops to 21% in rural areas and 17% in the suburbs, but it still shows that significant discontent remains and people will leave their carrier over service issues.

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Daniel Kline has no position in any stocks mentioned. He drove 1,300 miles in 30 or so hours last week. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.