By Dr. Judy Reed Smith (judyrsmith@atlantic-acm.com)

Background:

We are diligently working through the more than 5,000 carrier ratings that serve as the foundation for this year's Business Connectivity and Wireless Business Report Card.   We closed the research earlier this month, have been crunching the data and are beginning to assemble the report, with mid-July as our target for public availability.  Here's a sneak-peek at some of the broad trending data:

Analysis:

• What's Up, What's Down:  Overall, customers have moved their Brand ratings up a statistically significant, slow-but-steady one percent, per year for 2008-9 as well as 2009-10.  In contrast, Network Performance, which remains the single greatest purchasing driver, moved up almost three percent in 2009, then turned downward in customer satisfaction for 2010 in the only downward trend from business customers this year.  Opinions of both Sales Representatives and Provisioning were flat from 2008-9 and up for 2010. Customer Service ratings offer the best news, with statistically significant upward trends in both years.
  
• Most Companies' Customer Experience Touch Points Scores Remained Stable:  AT&T, Verizon, Qwest, Sprint, One Communications, Fibertech, RCN Metro, Optimum Lightpath and others remained stable in customers' opinions of operations centered on customer touch points. Those with significantly different scores include CenturyLink, which both merged with Embarq and increased ratings over two years, and Level 3, XO and PAETEC, which, although down or also flat for 2008-9, improved in 2010.
  
• Retail Product Pricing Scores Improved:  Product pricing showed some overall improvement in satisfaction, which sits in strong contrast to long-haul wholesale purchasers' heightened dissatisfaction with prices in 2010.   
  
• Product Quality Scores Were Generally Stable:  Customers' opinions of the quality of most products changed little in the past year.  ISDN, Internet Access, DIA, IPVPN and VoIP held their already strong ratings from customers.
  
• Ethernet Remains In Demand:  The product that the largest percentage of customers reported they wanted to move to in 2009 as well as 2010 - Ethernet - is seen as three-percent higher in quality and 2.5-percent more competitive in price in 2010.  Many providers speak of improving their Ethernet offerings which, when combined with the increased number of sites in which companies offer the service, is likely to have pushed prices to a more competitive level.  Although only a third of respondents currently use Ethernet, almost a fourth of respondents expect to add the service in 2010-2011. Those migrating to Ethernet will do so from ATM/Frame Relay, private line, and even DSL.  Ethernet also was the product with the largest anticipated spending increases this year.   
  
• Private Lines Yield Mixed Results:  Low-capacity Private Line, in the forms of DS1-DS3s, improved by four percent in both Quality and Price Competitiveness for local service, but, for long haul, were flat in quality and less price competitive.  High-capacity Private Line, including OC3 and above, as well as Wave Lengths, were seen as unchanged for local services but 14-percent improved satisfaction with quality for long-haul-- the greatest change for the year.  For price, customers with high-capacity private lines are less satisfied with both local and long-haul competitiveness, with local dissatisfaction increasing by more than three times that of long haul.
  
• IP VPN Remains on the Growth Side of the Migration Curve:  IP VPN, although less a migration target than Ethernet, still can expect migration from about 10-percent of users. These respondents were slightly more satisfied with price this year, but were neutral on changes in quality.   
  
• VoIP Migration Remains Strong.  It comes as no surprise that most migrations to VoIP will be from Integrated Access/PRI or Circuit-switched voice users, and that they are second only to Ethernet in terms of the number of companies migrating.   VoIP is becoming more of a commodity product with the competitiveness of pricing barely changing from company to company, or year over year. 

The Bottom Line:

Overall trending in terms of technology and migration are playing out as projected in our Sizing and Share Analyses, and in line with overall trending based on previous ATLANTIC-ACM Report Cards.  Customers as a whole indicate that purchases will be driven more by network performance and network security than by price, which differs from pricing pressures at the wholesale level, although the drivers will continue to vary by industry vertical.