The Time Warner-Comcast Merger Could Be A Nightmare For Customer Satisfaction
AP Photo/Gene J. Puskar
Comcast's plan to buy Time Warner Cable for $45.2 billion will face heavy government scrutiny to make sure it does not negatively affect consumers. One reason to be concerned is that both companies were already rated terribly for customer satisfaction, and mergers typically reduce customer satisfaction in the near term.
Time Warner's television service received the worst score for a national company on the American Consumer Satisfaction Index, which evaluates companies each year based on some 70,000 customer surveys. The company's telephone and Internet service also received abysmal scores.
Comcast's Internet service tied for the second-worst score among national companies, with similarly bad scores for television and phone service.
ACSI has noted that telecom companies, like airlines and large banks, many have low customer satisfaction scores because they are in industries with low competition. Unlike retail stores that have to compete for every dollar, telecom companies know that customers are slow to switch providers and sometimes have no alternative. When competition is available, as with satellite and fiber optic providers like DirectTV and Verizon in the television market, traditional cable providers are increasingly losing out.
Common complaints about Internet Service Providers, for instance, include poor call center service, poor variety of plans, poor quality services, and high prices.
As for the prospect of a merger, this process has historically led to lower customer satisfaction scores due to complications in integrating two companies, according to ACSI. For instance, Delta's acquisition of Northwest in 2009 led to a "two-year customer satisfaction free-fall."
Generally, the concern with such a large merger - combining the two biggest cable companies in the U.S. - is that it would enable the combined company to take advantage of the lack of competition to screw over consumers.
Comcast and Time Warner are selling the merger in positive terms, promising "a leading technology and innovation company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale." In other words, they say they will be both better and cheaper.
Customers have reason to be dubious.
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- Foreign tourist arrivals in India will cross pre-pandemic level in 2024
- Upcoming smartphones launching in India in May 2024
- Markets rebound in early trade amid global rally, buying in ICICI Bank and Reliance
- Women in Leadership
- Rupee declines 5 paise to 83.43 against US dollar in early trade
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market