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Satisfaction with Internet Service Providers fell to the lowest levels in more than five years during the year to September 2008 with 66.3% (down from 70.2% in 2003) of those with Internet connections at home reporting that their Service Provider “mostly met” or “exceeded” their expectations.

Chart 1. Internet Customers Whose Expectations were Exceeded or Mostly Met

Sample: Australians aged 14+ who have Internet Connection at Home. Total Industry Sample Size: Oct07 to Sep08: 13,307. (Other sample sizes available on request)

Proportion of those who reported that their expectations have been “mostly met” or “exceeded” by their Internet Service provider in the last 12 months.

This analysis reports only on companies with sample of at least 100 in each year.

Leading providers contribute to decline in satisfaction

The “bigger players” lead the industry in failing to exceed or mostly meet their customers’ expectations.  Bigpond’s performance seem to fluctuate over the last five years with now only 66.9% of their customers claiming Bigpond has “mostly met” or “exceeded” their expectations back in 2003.  This proportion of satisfied customers increased in 2006 to 70.2% but fell to 64.8% in the year to September 2008.

Optus was able to mostly meet or exceed the expectations of 71.6% of its customers in 2003 but this proportion of satisfied customers fell to 64.3% in the year to September 2008.

With Bigpond holding the lion’s share of the market (40% in the year to September 2008) and Optus being its most serious challenger (with 19% share in the year to September 2008), their performance brought down the satisfaction ratings for the total industry.

Smaller providers increase satisfaction over the past year

Providers with smaller shares of the market have performed better in meeting their customers’ expectations over the last year after experiencing a dip in ratings from 2006 to 2007. This dip was more visible among those who were spending under twenty dollars for their Internet service. The increase in rating over the past year was consistent regardless of spending and could be due to getting better deals and unlimited downloads/hours based on reasons given for the choice of service provider. There was also an increase in the proportion of these satisfied customers of smaller ISPs who held the opinion that their ISP offers worthwhile rewards/incentives for packaging 2 or more services together.

Internode had the biggest proportion of customers whose expectations were exceeded or mostly met (83.7%) and demonstrated the biggest increase in satisfaction over the past year (from 74.4%). Chariot runs second with 81% of their customer declaring it has exceeded or mostly met their expectations -- this was an increase from 72.8% in the last year. Other small providers that showed an increase in satisfaction rating in the last year include Netspace (from 71.1% to 74.7%) and Dodo (from 49.8% to 52.9%). Dodo, however, performed worse than average in meeting its customers’ expectations. Dodo still has a long way from service recovery after the unusually huge number of complaints filed by its customers to the Telecommunications Industry Ombudsman on complaint handling and billing codes.

Table 1.  Internet Service Providers’ Performance in Meeting Customers’ Expectations

Sample: Australians aged 14+ who have Internet Connection at Home.

Total Industry Sample Size: Oct06 to Sep07: 13,414; Oct07 to Sep08: 13,307. (Other sample sizes available on request)

Proportion of those who reported that their expectations have been “mostly met” or “exceeded” by their Internet Service provider in the last 12 months.

This analysis reports only on companies with sample of at least 100 in each year.

Howard Seccombe, Industry Director for Telecommunications at Roy Morgan Research, says:

“Amongst the Internet service providers, the smaller players are the ones stepping up and showing the greatest level of customer expectations met or even exceeded over the last 12 months.

“It would be interesting to see if these small players will be able to extend their service to cover under-served areas and premises and still maintain the same level, if not, greater level of customer satisfaction.”

About Roy Morgan Research

These findings are derived from Roy Morgan Research Single Source data.  Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has more than 60 years’ experiences in collecting objective, independent information on consumers. In Australia, Roy Morgan Research is considered to be the authoritative source of information on financial behaviour, readership, voting intentions and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.

For further information:

Howard Seccombe — Roy Morgan Research Telecommunications Industry Director

Office +61 3 9223 2427   Mobile +61 434 602 386

Howard.Seccombe@roymorgan.com

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. The following table gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. The figures are approximate and for general guidance only, and assume a simple random sample. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size	Percentage Estimate
	40%-60%	25% or 75%	10% or 90%	5% or 95%
10,000	±1	±0.9	±0.6	±0.4
25,000	±0.6	±0.5	±0.4	±0.3

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