The secret to telecommunications success? It could be in the palm of your hand.

The customer satisfaction scores in telecommunications might not actually tell the whole story.

From a big picture standpoint, the results from our recent Telecommunications Report aren’t that surprising. Out of the five telecommunications industries we examined – video streaming service, subscription TV, internet service providers (ISPs), fixed-line telephone service, and video-on-demand service – only video streaming made a lasting impression, climbing 1.3% to an ACSI score of 76 (out of 100).

Fixed-telephone service was second with a score of 71, followed by video-on-demand service at 67. ISPs and subscription TV service each scored 62, tied for last place among the individual industries.

However, upon a closer examination of the various benchmarks, it would appear that one element may be more crucial to – as well as a clear indicator of – a company’s customer satisfaction: mobile apps.

Going mobile

Per a survey from the National Center for Health Statistics, 53.9% of U.S. households have done away with landlines completely, choosing to use cell phones only. This is a far cry from the 2006 survey, when only 15.8% reported no longer having a landline.

The fact is, people are becoming more reliant on their mobile phones, and as such, mobile apps are becoming a more important piece of the customer satisfaction puzzle.

Companies that place a greater emphasis on their mobile apps recognize this growing shift in customer needs. We’re seeing this in telecommunications, where higher mobile app scores tend to correlate to higher satisfaction scores overall.

The better the mobile app…

We’re not saying that mobile apps are solely responsible for a company’s overall satisfaction, but it certainly helps.

Netflix (79) and Sony’s PlayStationVue (78) have the highest scores among video streaming services, and users are also happy with the quality and reliability of their mobile apps.

Verizon’s Fios and AT&T’s U-verse TV, which tied for the top ACSI score among video-on-demand services at 72, also have high-quality mobile apps that customers find reliable.

The same goes for Verizon’s Fios (70) and AT&T Internet (69) in the ISP industry, and AT&T’s U-verse TV (69) and Verizon’s Fios (68) in subscription TV services.

The worse the mobile app…

On the flip side, companies with low-quality and unreliable mobile apps tend to see similar results in overall customer satisfaction.

Frontier Communications sits near the bottom of subscription television services at 57 and lacks a satisfactory mobile app. The company also has the lowest score (61) among fixed-line telephone services.

Charter’s Spectrum is in a similar boat among video-on-demand services. It has the lowest ACSI score in the industry at 64 and a less-than-reliable mobile app to match.

AT&T’s DirectTV Now and Sony’s Crackle fit the same bill among video streaming services. The former finished second to last and the latter took the bottom spot at 69 and 68 respectively. Both also have mobile apps that do not have the quality and reliability as compared to the rest of the video streaming industry.

There are always outliers

Of course, just because a company lacks in the mobile satisfaction category doesn’t guarantee its overall customer satisfaction will suffer. There are outliers.

DISH Network’s Sling TV has one of the top mobile apps according to customers, yet sits closer to the bottom of video streaming services with an ACSI score of 74.

Mediacom has the second-lowest score among subscription TV services at 56, but has one of the highest-rated mobile apps, both in terms of quality and reliability.

It’s not an exact science, and there are obviously a number of factors that go into customers’ overall satisfaction with a brand. But mobile apps definitely shouldn’t be overlooked when it comes to the customer experience.

Making mobile apps a priority moving forward

The game has changed. Consumers regularly stream shows, watch videos, and scour the internet on their phones, and it plays a major role in how they perceive brands.

For these reasons, we’ve started measuring – and placing a significant emphasis on – mobile app satisfaction. While there are exceptions, for the most part mobile app success in the telecom sector has some correlation to overall customer satisfaction.

Given the mobile trend is likely here to stay, telecommunication companies aiming to improve satisfaction might want to pour more resources into refining the quality and reliability of their mobile apps.

Pay TV and ISPs: Dead Even, Dead Last in ACSI

It doesn’t take a lot of imagination to glean that U.S. consumers find little to like about their subscription television or internet service—especially when it is provided via cable. According to customers, internet service providers constitute the bottom of the barrel when it comes to customer satisfaction, and this year pay TV is no better. Both come in dead last among 43 industries in the American Customer Satisfaction Index, and many of the same companies dominate both categories.

While other telecom industries improve in 2017—most notably wireless phone service rises nearly 3% to 73—pay TV slides 1.5% to meet ISPs at 64. And some cable providers are scraping down toward the bottom of the entire Index. Comcast’s Xfinity tumbles 6% to 58, just ahead of Mediacom (56). The best pay TV can offer comes via fiber optic or satellite, as DISH Network, AT&T’s DIRECTV and U-verse, and Verizon’s Fios score in the range of 67 to 71. For internet service, Fios and U-verse also take the top (71 and 69, respectively) with Xfinity at 60, just ahead of several providers who languish in the 50s (Frontier, Windstream, Mediacom, and CenturyLink).

For pay TV, the very real threat of competition has not turned the tide for customer satisfaction. Increasingly, customers are forgoing the poor service they are receiving and switching to streaming services. In the first quarter alone, over half a million subscribers defected from cable and satellite service—the biggest loss in history.

Overall, the ACSI report does not bring good news for broadband and as other options proliferate, cord cutting is unlikely to subside or slow down. As such, the ACSI will be adding measurement of VOD (video on demand) in 2018 to capture the on-demand services of traditional providers, along with coverage of competing stand-alone video streaming services.

ACSI Telecommunications Report 2017 »

BGR News: Cable Companies Need to Be Scared, Because Cord Cutting Is Here to Stay »

Fortune: The Cable TV Industry Is Getting Even Less Popular »

Consumerist: You Still Hate Your Cable Company as Much as Ever, but Think Your Mobile Carrier’s All Right »

CIO: Consumers Love to Hate the Companies That Deliver Pay TV and Broadband »

Will Mega-Telecom/TV Mergers Mean Mega-Headaches for Consumers?

As regulators take on the implications of the broadband uber-company that could emerge from a Comcast-Time Warner Cable marriage, another scaled-up competitor is in the making. AT&T announced its $49-billion deal to acquire DIRECTV, a proposal reflecting a reality where TV and telecom continue to blend into “one mutant industry.”

ACSI data have long shown that mergers are no friend of customer satisfaction. Industries where competition is limited—including virtual monopolies like the U.S. Postal Service’s mail delivery—generally show lower satisfaction overall. The airline industry with its hub structure or cable TV with its service area limitations are good examples of poor customer satisfaction.

But in the land of media, voice, data, and video, customers also take a dim view of the quality and value of their service. On one hand, they may be paying for more than they want via supersized TV packages. On the other, Internet service speed still lags consumer desires. ACSI results show that all communication categories fall well below average for customer satisfaction, with ISPs and pay TV at the very bottom among 43 industries.

telecom-v-national

Comcast and Time Warner assert that their proposed merger will not reduce competition because there is little overlap in their service territories. Nevertheless, it’s a concern whenever two poor-performing service providers merge—as well as unlikely that combining two negatives will be a positive for consumers.

comcast-v-tw

As for AT&T and DIRECTV, the two companies do well compared with other pay TV providers, but their ACSI scores have declined relative to 2013. Combining their operations may ultimately mean less choice for pay TV customers, as analysts anticipate that U-Verse subscribers will be shifted to satellite in order to free up space on AT&T’s landline network for better high-speed Internet.

tv-merger-co-compare

Download ACSI Telecommunications and Information Report 2014 »