So, we just got wave 2 of the consumer survey back last night. Over 1,500 north American consumers telling us about their comms, devices and attitudes to digital media and transactions.

Those who know me know that I love reading the open ends; and today I wanted to share a question we put at the end of the survey where we invite respondents to write an open letter to their service providers. This wave we got 2,400 letters, even more than the 1,700 last wave. I read them all and here are my thoughts.

The nice thing about these letters are that we deliberately put it at the end, typically 10-15 minutes after we’ve gathered quantitative feedback on service providers. Within that time, we’ve asked about media, TV, Internet and devices and so the respondent should be quite detached from the quant questions that head up the questionnaire.

Obviously, we get more letters to the bigger providers. AT&T got 430 letters, Comcast 268, DirecTV 151, Dish 136, Sprint 128, TWC 129, T-mobile 153, Verizon 377, Rogers 61. We ask about 65 providers in total, but these are the most numerous.

Reading these open ends also gave me a chance to review Tracfone. In my last blog on pet names for phones, I had noticed that few people, except Tracfone customers, name their phone after the service provider. I promised last time to try to understand why this is. In wave 2, there were 59 letters to Tracfone and I subjectively classified each as a positive, negative (abusive or constructive) or neither. Tracfone is 29 positives and 17 negatives; which I suspect will make them the only company to get more positives than negatives, and comments overall tend towards the rant.

What do Tracfone customers say? On the positive “Great service, nice people, reasonable prices, unpretentious”! On the negative its about handset choice, coverage and the ubiquitous whinge about price and technical issues (but no more there than all the rants).

Other companies that got generally attractive comments were AT&T and DirecTV.

So, (and this is based on anecdotes, of course), it seems that if you want customers to think well of you, be an honest partner. How old fashioned it is to think that customers are people, not account numbers! Whether Tracfone does this deliberately or by accident, I don’t know. And I’m not pretending to know whether the marginal EBITDA improvement justifies whatever costs are associated with at least appearing to be an honest partner. I’ll let our analysts do that.

Last wave, and this wave, I’ve been trying to get a sense of what matters to people when you don’t lead them with ideas. Here’s my synopsis of what people care about:

1. Price, especially the big carriers like AT&T and Verizon
2. Technical stuff, like coverage and outage/dropped calls

…no surprise there. Now for the other comments in my perceived order of how often they appear.

3. Off-shore call centers, and particularly not being able to understand the person at the other end of phone
4. Instantaneousness. Not getting a fix in real-time/waiting more than 5 seconds for a username and password
5. Marketing. Especially unsolicited phone calls
6. Lieing and hidden charges. Prices that aren’t really as advertised. (Now, I’m sure the marketing is factually accurate, but ‘perception is reality’. It doesn’t matter if the customer got it wrong, their level of irritation is based on what they thought they heard, not what was said)
7. A feeling of not being rewarded for loyalty
8. Poor billing (inaccurate or incomprehensible)

There is also a common thread of comments for pay TV providers, characterised by “Don’t change the channel line up quite so often”, “Give me the channels that I thought I was going to get”, and “Don’t put porn channels in the listing next to kids channels”. Being able to have more control over which channels appear in the listings might be popular.

I’m getting into this. Statistics are evidential and very powerful, but anedcotes are closer to the heart. My next blog will be to compare the letters from people who say they are “likely to churn” against those that are “unlikely to churn”. I want to compare them to our formal question about churn reasons.

P.S. We’ve just introduced a system that allows non-survey clients to get access to hard data by trading some of their inquiry hours. Survey clients get all the data and analysis as part of their subscription, but if you haven’t joined that club yet, let me know and we’ll get you up and running or talk about trading hours for data.

We published the first wave of the monthly Consumer Survey last week, and it’s been received well, which is great. Although I’ll leave the detailed analysis to the analysts (I’m just a product manager), we tried really hard to make the survey fun, and put in some verbatims that perhaps don’t work so well as statistics.

One feature of the survey is we ask about all the cellphones and mobile devices that people have, and to help the respondent, we ask them to give their cellphones a name. (For us and our clients, it’s about ensuring data quality when doing cross-tabs and getting clean data).

So, non-scientifically, I wanted to know what people associate their cellphones with, i.e., when not under pressure, what pet name do they give their phone? Where is the emotional attachment?

(Personally, I call my phone after the service provider, since I have two phones because no single service provider gives me coverage in my main locations.

It seems I’m abnormal.)

The overwhelming majority of people who didn’t name their phone after a person (e.g., Cindy’s) or a function (e.g., work phone), associate their phone with the manufacturer or model (e.g. my Nokia). The next most common naming convention was after the form factor (e.g. my flip).

Odd to me, anyway, was the incredible sparsity of people naming their phone after the service provider. Non-scientifically, like I say, less than 5% of people name their phone after the service provider, and of these a notable number named after both model and provider (e.g. Virgin Nokia).

(I couldn’t help noticing too, that of service provider names in the database, Tracfone seemed to be seriously overrepresented given it’s market share).

Anecdotal, I know, but here’s what I get from this: manufacturers are cool, phones are sexy and service provider are… well, unmemorable.

What is it about service providers that make them so unmemorable that they rarely feature as a pet name? And, what is it about Tracfone that it does get a mention quite so often?

There’s so much data about attitudes to service providers (and lots of other things) in the data that I think we’ll find out.

We also asked respondents to write a letter to their service providers (across all home services). We got over 1,500 short letters cut by service provider. Perhaps the answer lies in reading the letters to Tracfone? Any other ideas?

We love data. Data expresses and informs opinions and gives my colleagues and me ample opportunity to see numbers in action. We spend a lot of time looking at the numbers as they come in and we love to see what they tell us.
Yankee Group has three families of data product, which look at the past (Monitors), the present (Surveys) and the future (Forecasts). These little gems come from all three in December 2008. Let me know if they surprise you!

1. Europe has a reputation for leading the world in mobile. But did you know that one-third of all mobile phones are found in 4 Eastern European countries. Russia, Ukraine, Poland and Turkey. (Taken from EMEA Mobile Forecast)
2. What a growth VoIP has had! In 2003, 0.1% of US phone lines was VoIP. At the close of 2008, it’s 24%. (Taken from North America Consumer Forecast)
3. FTTH is growing at last. Surprisingly, South Korea has the biggest penetration, at 43%. (Taken from Global Consumer Forecast)
4. Mobile TV is ready for explosion: by 2012 there’ll be 299 million users worldwide. By comparison, there’ll be less than twice that number of digital TV users (576m). (Taken from Global ConnectedView Forecast)
5. More than half of US TV watchers go online at the same time. (Taken from US Entertainment Survey)
6. The most common reason people watch TV online is to catch up on missed TV episodes. 82% of internet TV watchers do this. OK, so catching up on missed TV is important, but get this: even people who own a DVR of some description are more likely to catch up online than set the DVR to record it. (Taken from US Entertainment Survey)
7. And add to that – of people who watch Internet TV, a quarter watches something every day. (Taken from US Entertainment Survey)
8. In my last blog on the economy I pointed out that the impact of the recession is yet to be too apparent in our monitor and forecast data. But still these facts astonish me taken from our wireless monitors. 96% of carriers grew subscribers since 3Q 2007 to 4Q 2007 and 93% since 2Q 2008 .73% of carriers have grown service revenue since 3Q 2007 and 83% since 2Q 2008. More than half have grown ARPU since last quarter. I can’t wait to see the 4Q results come in and will let you know if these stats continue to ignore the financial crisis.

As a product manager for our data products, one of the most common questions I get is the country granularity that we have in our ConnectedView forecasts. (ConnectedView is the name Yankee Group gives to our detailed forecasts of end user markets, which spans fixed and mobile in consumer and enterprise markets).

People find it hard to keep track of our coverage, because in September, we increased our coverage with 13 new countries detailed in the forecast (these are starred in the list), and ensured that all countries included all the metrics, which smoothed out one or two anomalies in Asia.

Yankee Group forecasts the global market, and now has 54 countries explicitly detailed as well as regional summaries. You can see what we cover by downloading an example file. Example files contain the full Excel files, with all the tools, but with the numbers scrambled. Take your pick here.

ConnectedView countries with detailed forecasts

Here’s a list of every country in the world, segmented by whether we have a detailed page for the country, or whether it is included in the total view of the region, but not explicitly detailed.

Whenever Yankee Group talks about a region, these are the definitions we work to.

North America

• Countries specifically detailed: Canada, United States

Latin America

• Countries with detailed break outs: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela
• Additional countries that complete the regional view: Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bolivia, Cayman Islands, Costa Rica, Cuba, Dominica, Dominican Rep., Ecuador, El Salvador, French Guiana, Grenada, Guadeloupe, Guatemala, Guyana, Haiti, Honduras, Jamaica, Martinique, Netherlands Antilles, Nicaragua, Panama, Paraguay, Puerto Rico, Saint Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, Uruguay, Virgin Islands (U.S.)

Western Europe

• Countries with detailed break outs: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom
• Additional countries that complete the regional view: Andorra, Cyprus, Faroe Island, Gibraltar, Iceland, Liechtenstein, Luxembourg, Malta

Eastern Europe

• Countries with detailed break outs: Croatia*, Czech Republic*, Estonia*, Hungary*, Latvia*, Lithuania*, Poland*, Romania*, Russia*, Slovakia*, Slovenia*, Turkey*, Ukraine*
• Additional countries that complete the regional view: Albania, Armenia, Azerbaijan, Belarus, Bosnia Herzegovina, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Macedonia, Moldova, Montenegro, Serbia, Tajikistan, Turkmenistan, Uzbekistan

Middle East

• Countries with detailed break outs: Saudi Arabia*, United Arab Emirates*
• Additional countries that complete the regional view: Bahrain, Iran (Islamic Rep. of), Iraq, Israel, Jordan, Kuwait, Lebanon, Occ. Palestinian Territory, Oman, Qatar, Syrian Arab Republic, Yemen

Africa

• Countries that make up the region: Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Rep., Chad, Comoros, Congo, Côte d’Ivoire, Dem. Rep. of the Congo, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Libyan Arab Jamahiriya, Madagascar, Malawi, Mali, Malta, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Reunion, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Togo, Tunisia, Uganda, United Rep. of Tanzania, Zambia, Zimbabwe

Asia-Pacific

• Countries with detailed break outs: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand*, Pakistan*, Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam
• Additional countries that complete the regional view: American Samoa, Bangladesh, Bhutan, Brunei, Cambodia, Fiji, French Polynesia, Guam, Kiribati, Laos, Macau, Maldives, Marshall Islands, Micronesia (Fed. States of), Mongolia, Myanmar, Nepal, New Caledonia, North Korea, Northern Mariana Islands, Papua New Guinea, Samoa, Solomon Islands, Sri Lanka, Tonga, Vanuatu

Composite Regions

• Middle-East & Africa: this is all the countries in the Middle East and in Africa
• EMEA: this is Europe (Western and Eastern), Middle East and Africa
• Americas: this is all the countries listed above in North and Latin America

The telecom industry has been taking a knock in the media. If stock prices for service providers and vendors were a measure, then we’d think it was 2001 all over again.

Yankee Group doesn’t agree with many of the steep downgrades reported in the media. In an attempt to avoid a knee jerk reaction by downgrading forecasts as if avian flu had wiped out the population; we’re looking at lessons learned from previous recessions and holding forth the belief that the trend towards Anywhere is irreversible. People simply won’t cut their service. The economic crisis will shape rather than stop the momentum towards ubiquitous connectivity.

Data from the 3Q 2008 results for global mobile carriers in our monitors paints a rosier picture than expected. Our estimates–to be published in the next few days–show:

• 94% of carriers have grown subscribers since 3Q 2007 and 91% since 2Q 2008
• 75% of carriers have grown service revenue since 3Q 2007 and 83% since 2Q 2008
• More than half have grown ARPU since last quarter

(But, it’s worth noting – apart from Vodafone Australia – that the bad news stories are all in the US and UK.)

That does not mean that the industry is immune to the global recession. Consumers will certainly seek to reduce expenditure… they will attempt to pay less.

(I, for one, just shaved £5/month from my personal mobile expenditure by reducing my HSDPA allowance from 3GB to 1GB on my personal cellphone; but that was because I rarely use more than 200MB).

Yankee Group analysts who drive our thinking are more bullish on wireless subscriptions than some reports in the information media space. They question:

• Declining Subscribers? What are the characteristics of someone who would cut cellphone service completely? Or broadband service. To go from having connectivity to not having connectivity is a big step. People see connectivity like a utility, not a dispensable luxury.
• Declining ARPU? There are unimaginably large amounts of money being pumped into the system by governments around the world, which should increase inflation and prices. If it weren’t for the perception of recession, we could argue for ARPU increases. Balancing increased money in the system against decreased perception of wealth will ultimately define the prices people will pay.

The Enterprise segment behaves differently. Some companies will go bust, reducing service provider addressable market. More importantly, buyers of services are franticly renegotiating contracts to get more for their money, or if wise, more for less money. This means that average revenue per connection is either going to stay static, or future growth potential is softened. There is some upside – as travel reduces, people will look to conferencing solutions, which might represent upside.

(I remember as an analyst in London in 2001, everybody talked about a video conferencing revolution. It didn’t happen. But, this time, it might just happen through free or nearly free services such as Skype and ooVoo).

Clearly, the capex market is affected, since it is highly sentiment- and liquidity-based. Yankee Group’s report ‘Will the Anywhere Economy Slow Down?‘ addresses this.

So, how is Yankee Group addressing changes to its forecasts to adjust for the economic crisis? We’re taking both a global and country-specific view. That’s because we know that every country is going to be different, and a blanket global statement is only a start.

(In the UK, where I pay a mortgage, interest rates are down to 2% and I frankly have £300 a month more in my pocket than I did in August. In the US, my colleagues are all paying double the healthcare, and their mortgages are at fixed rates.)

Despite this potentially rosy picture, behavior will change as people come out of contracts. This month, we are downgrading our forecasts of the growth in consumer and enterprise markets in economies that are most affected – those where the IMF predicts less than 3% real growth next year in the overall economy. In addition, we are reducing the outlook for countries with economies that are closely linked to countries expected to have seriously weakening economies.

There are just about as many exceptions as rules, though. Our forecasts will show softening growth in subscribers & connections; but we’re still playing the wait-and-see game on ARPU in all services, as the actual amount of cash being pumped into national economies becomes better known. We think we’ll have better evidence of governmental responses in 1Q, and we may make changes to ARPU again in our 1Q iteration or before.

Part of our close scrutiny on the economic impact on local markets will be reflected in our survey work as well. Our survey products are interrogating the market closely, and our new survey style being launched in January allows flexibility in questions to ask enterprises and consumers every month. We’ll be asking thousands of consumers and enterprises every month from January precisely what they think the economy is doing to them.

So expect no knee jerk reactions from Yankee Group forecasts. We prefer let the data tell the real story. Right now the data tell us that the economic crisis has yet to impact carrier revenues and end user behavior. It’s not as bad as the media would have you believe.