Satisfaction Slumps for Global Wholesale Carriers

For more than a decade, Atlantic-ACM has been gathering feedback from global wholesale buyers to develop a market-wide service comparison in our annual Global Wholesale Carrier Report Card. Data from the 2013 study finds that market-wide customer satisfaction with product quality fell in 2012 on both voice and data products.

Looking first at voice products, which include Guaranteed Global Voice Termination, Best Efforts Global Voice Termination, IP Voice Termination, and Toll Free, we find that overall satisfaction with voice quality is down among all carriers by about 2 percent from 2012 to 2013. In fact, the market-wide scores for both voice product quality, and voice product price reached a four-year low in 2013.

Separating small and midsized players from larger carriers (those with over $15 billion in annual wireline revenue) reveals a more noteworthy trend. Whereas smaller and midsized carriers experienced a decline in voice product scores of just one percentage point for both quality and price, large carriers scored almost 3 percent lower than they had in 2012. In other words, the overall drop of 2 percent amounts to splitting the difference in declines between large carriers and their competitors.

Considering that many large carriers are pushing back on voice price compression, it is not surprising to see increasing frustration with voice pricing, but with more customers buying premium voice products it is surprising to see such a dramatic drop in quality scores across the leading global carriers.

It’s worth noting that on average, larger players continue to score higher in overall voice product quality than small and medium-sized carriers, but the gap is closing. Larger carriers consistently receive lower scores for price than their smaller competitors.

The combined scores for all global wholesale data products, including Ethernet-based IP Transit, Legacy DIA, IP WAN, and International Transport (including Ethernet) also fell slightly across the board, but, just like voice, deeper analysis is warranted.

While the overall data quality average fell by only about half a percentage point across both large and small carriers, the data price scores were hit very hard. Again, the shift in price ratings for large carriers was dramatically different from scores for smaller carriers. While smaller global wholesale providers saw their data price ratings fall only 1 percent, the average decline across $15 billion wireline carriers was over 6 percent. This is, by far, the largest shift in any major category.

It is not surprising to see smaller carriers gaining on their larger counterparts in the global wholesale marketplace. Many megacarriers are trying to slow the price compression that has plagued global wholesale for many years now, particularly on the voice side, and unlike their smaller counterparts they often are not as willing to negotiate.

While the decline in product quality scores is something we don’t like to see, the decline in price scores actually suggests that the rate of price decline may in fact be slowing. We look forward to seeing how this trend plays out over the next year.

This analysis originally appeared at Innovation Generation 


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