Strategy Analytics: Time Warner Cable Most Vulnerable To Broadband Price Competition

Three out of every four US broadband subscribers would be willing to leave their current Broadband Service Provider (BSP), according to a survey just published by analyst firm Strategy Analytics. Within this average, Time Warner Cable is the most susceptible to customer defections if a price war breaks out. AT&T and Verizon are both vulnerable to rival offers of faster broadband speeds, while Cox Communications has the most secure customer base.

The survey, “Broadband Satisfaction and Customer Churn: US 2H’08,” focuses on the so-called “three pillars” of customer churn: customer satisfaction levels, propensity to churn, and perceived obstacles to defecting. Respondents were presented with various broadband speed and price scenarios to gauge sensitivity.

In the competitive US broadband market, churn is the most important metric for BSPs today, the analyst firm says.

“As the US broadband market matures, BSPs will increasingly compete for the same pool of customers,” says Ben Piper, Analyst and Director of the Strategy Analytics Multiplay Market Dynamics Service. “The key focus will continue to evolve from one of new customer acquisition to retention and churn mitigation.”

To measure perceived obstacles to churn, panelists were asked to rate the importance of various non product-related metrics (including inconvenience of installation, attitudes towards other providers, hassle of returning equipment) in their decision of whether or not to defect.

A key finding from the study was the importance consumers placed on perceived hassle of scheduling installation. Nearly eighty percent considered this to be “somewhat” or “very” important in their decision to switch providers.

“The implications for BSPs are clear,” noted John Lee, Analyst in the Strategy Analytics Digital Consumer Practice. “In this highly competitive and commoditizing market, companies can differentiate through customer service.”

The survey polled 1,003 “broadband decision making customers” during September and October 2008 and includes data from the top US BSPs, including Comcast, AT&T, Verizon, Time Warner Cable, Cox, Charter, Qwest, Cablevision and Embarq.

About Strategy Analytics

Strategy Analytics, Inc. provides timely and actionable market intelligence focused on opportunities and disruptive forces in the areas of Automotive Electronics and Entertainment, Broadband Connected Home, Mobile & Wireless Intelligent Systems and Virtual Worlds. Headquartered in Boston, MA, with offices in the UK, France, Germany, Japan, S. Korea and China, Strategy Analytics works with clients through annual multi-client services, management team workshops and custom consulting engagements. For more information, please visit

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