Sprint Nextel: Last in Customer Service

For the fourth consecutive year, the wireless carrier's struggle to satisfy subscribers is evident in a J.D. Power ranking of mobile service providers

Once again, Sprint Nextel (S) finds itself at the bottom of the wireless provider heap when it comes to customer service. For the fourth time running, Sprint Nextel received the lowest ranking among the largest mobile-phone service providers in a semi-annual study of customer care by J.D. Power & Associates.

The showing reflects Sprint Nextel's perennial struggles to keep customers from switching to rival providers, a tendency that has contributed to slumping sales and rising churn rates, or the average number of subscribers who defect each month (see BusinessWeek.com, 5/2/07, "A Tough Slog for Sprint"). Sprint didn't do itself any public-relations favors recently when it sent letters to a heap of customers to inform them that they're being dumped for contacting customer service too often (see BusinessWeek.com, 7/5/07, "Sprint to Customers: You Are Fired").

Unsurprising Ratings

Sprint Nextel customer Sean Fitzgerald said he wasn't surprised his carrier finished last in the J.D. Power study. "I've talked to many friends who've complained about not getting great service there," he says, noting that he had to contact the company multiple times because of billing errors that surfaced during the Sprint Nextel merger, completed in 2005. He says there were inaccurate charges on his bill five months in a row. Fitzgerald wouldn't be swayed to switch to another provider, however; he lives and works in an area of the northeastern U.S. where Sprint connectivity, he says, is "stellar."

J.D. Power, which like BusinessWeek.com is owned by The McGraw-Hill Companies (MHP), assigned Sprint Nextel two out of five so-called Power Circle ratings. That's based on feedback from more than 10,500 customers in the past year on such matters as phone assistance, contact made in wireless retail stores, and connections online. J.D. Power measured the efficiency and hold-time duration of processing issues, and how often the customer had to repeat requests.

Sprint Nextel is working to improve its Web site and automated response system. "We know that customer service is a challenge for us," says Sprint Nextel spokeswoman Roni Singleton. "We want to assure [our subscribers] that we are working really hard to enhance their customer care experience. We really are committed. We've certainly enhanced certain tools for customers, like self-service tools, so they can get the answers to their questions quicker."

Top of the Heap

At the top of the rankings for the sixth-straight time was Deutsche Telekom's (DT) T-Mobile USA. The provider received five Power Circle ratings. Rounding out the list: Alltel (AT), AT&T (T), and Verizon Wireless (a joint venture of Verizon (VZ) and Vodafone (VOD)), all received 3 ratings and were deemed "about average" by J.D. Power.

According to the report, of the 40% of wireless customers who contacted their providers this year, 43% made billing inquiries and more than half of those were attributed to incorrect charges. The study also found that most service questions are made via telephone, with the average hold time just over three minutes. "Obviously any contact that you have with your carrier will impact your experience with that carrier," says Rich Ellrodt, senior director of telecom and technology research at J.D. Power. "I can tell you that people who are satisfied with the service are less likely to switch."

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