2016 City of Lake Oswego Gigabit Broadband Demand Assessment. City of Lake Oswego

Transcription

1 2016 City of Lake Oswego Gigabit Broadband Demand Assessment City of Lake Oswego January 2016

2 Research Objectives Validate the business case for a FTTP broadband network by determining what the city can expect for initial demand for Gigabit broadband Internet service. Understand overall customer satisfaction with existing service providers in Lake Oswego, including satisfaction with customer service, Internet speed and reliability, price and overall value. Identify any differences by demographic where they exist. 2

3 Methodology These findings are based on phone surveys conducted December 2015 and January In total, 344 residences and 103 businesses were surveyed. All sampling was constrained to the and zip codes. To qualify for the survey, respondents had to be over 18 years old and be currently subscribing to Internet service. The survey instruments were written by Pivot with input, collaboration, and additional questions provided by the City of Lake Oswego. 3

4 Residential Findings 4 Pivot Group LLC 2016 City of Lake Oswego Gigabit Broadband Demand Assessment

5 Current Internet Provider Q4. Can you tell me what company you use to access the Internet at home? (n=342) 100% 80% 78% 60% 40% 20% 0% 13% 6% 1% 3% Comcast/Xfinity CenturyLink Frontier AT&T (U verse) Other 5

6 Stated Monthly Internet Cost Q7. Can you tell me the average monthly amount you re paying for your Internet service? Asked of all respondents (n=344) 49% (169) of respondents knew the amount they pay for Internet. Total Total answering: n=169 Less than $45 per month 31% $45 to $60 per month 34% More than $60 per month 35% Stated Average: $60 6

7 Bundle Type Q5. Is your Internet service bundled with telephone or TV services? Meaning, are you paying one provider for Internet, TV and/or telephone services. (n=342) 100% 80% 85% have one provider for two or three services. 60% 40% 38% 28% 20% 19% 15% 0% Triple Play Phone and Internet Internet and TV Internet only 7

8 Stated Monthly Bundle Cost Q6. Can you tell me the average monthly amount you're paying for the whole bundle or bill? (n=292) Asked of those who bundle services Bundle Type Triple Play Internet and Phone Internet and TV Total answering: n=128 n=95 n=64 Less than $120 per month 9% 46% 28% $120 to $179 per month 32% 29% 50% $180 or more per month 59% 24% 22% Stated Average: $188 $138 $140 8

9 Stated Internet Speed Subscribed To Q9. What is the download speed in megabits per second that you are paying for? (n=95) 100% 80% 60% 28% (95) of respondents overall are aware of the Internet speed they re subscribed to. 40% 25% 39% 36% *32% nationwide knew their Internet speed in a Pivot study in % 0% Less than 20 Mbps Between 20 and 45 Mbps More than 45 Mbps <$40 $40 $60 >$60 Total answering: n=24 n=25 n=21 Less than 20 Mbps 38% 24% 10% Between 20 and 45 Mbps 38% 36% 43% More than 45 Mbps 25% 40% 48% Stated Average: 30 Mbps Monthly Internet Bill Amount 37 Mbps 48 Mbps 9

10 Satisfaction with Internet Service Attributes By Provider Q11. Using a 1 to 10 scale with 1 being "not at all satisfied" and 10 being "very satisfied," how satisfied are you with the following? (n= ) Shown are mean scores Comcast/ Xfinity CenturyLink Other ISPs Total answering: n=266 n=47 n=29 The reliability of your Internet connection The speed of your Internet connection The customer service of your Internet provider The overall value you receive The monthly price for Internet service

11 Satisfaction with Internet Service Overall Q12. Using a 1 to 10 scale with 1 being "not at all satisfied" and 10 being "very satisfied," how satisfied are you with your Internet service provider overall? (n=344) 100% 80% Mean Rating: 6.3 (no differences by provider) 60% 40% 20% 0% 2% 4% 7% 7% 1 Not At All Satisfied 15% 13% 18% 21% 13% are very satisfied (9 10 rating) 5% 8% Very Satisfied 11

12 Likelihood to Recommend Internet Providers Q13. How likely is it that you would recommend your current Internet service provider to a friend or colleague, using a scale from 1 to 10, with 1 being "Not at all likely" and 10 being "Very likely"? (n=344) 100% 80% Net Promoter Score: 49 60% 40% 20% 0% 19% 1 Not At All Likely 61% Detractors (1 6 rating) 6% 7% 7% 16% 7% 13% 14% 12% Promoters (9 10 rating) Very Likely 4% 8% 12

13 Net Promoter Score by Provider Q13. How likely is it that you would recommend your current Internet service provider to a friend or colleague, using a scale from 1 to 10, with 1 being "Not at all likely" and 10 being "Very likely"? 100% 80% 60% 40% 20% 0% 20% 40% 60% 80% 100% Net Promoter Score Overall: 49 51% Comcast/Xfinity (n=261) 64% CenturyLink (n=44) 15% Other ISPs (n=27) 13

14 Awareness of Gigabit Q14. Prior to this survey, had you heard of Gigabit Internet? (n=343) 39% of respondents say they were aware of Gigabit Internet. *18% nationwide were aware of Gigabit in a Pivot study in

15 100% Would You Like to See the City Offer Gigabit Internet Service? Q15. If the price to local households was acceptable, would you like to see the City offer a fiber network and Gigabit Internet service? (n=344) 80% 79% 60% 40% 20% 0% 9% Yes No I don t know enough about it to know whether I d say yes or no 5% 4% 3% It depends Doesn t matter to me one way or the other 15

16 Reasons Why Not Q15A. Can you tell me the reason why you would not like to see the City offer a fiber network and Gigabit Internet service? (n=27) Asked of those who answered No to Q15 Top Themes: Government shouldn't be involved / Leave to private sector Count Don t need Gigabit speeds 2 10 I have no need for increased speeds. I don't think the City should be involved in Internet service. It's not a service the City should provide. I don't think the City should be involved. I don't want them controlling the cost to each household. The city should not be involved. It should be by private enterprise. 16

17 Information Needed to Decide Q15B. What more would you need to know about the City offering a fiber network and Gigabit internet service? (n=27) Asked of those who answered It Depends or I don't know enough about it to know whether I'd say yes or no to Q15 Top Themes: Count Need to know the price 16 Need more information in general 7 Would need to more info and would need to know pricing. How will it be paid for? 2 I would like to know what the cost is and the benefits to me and why should I change. Cost and how disruptive it would be to implement. What would be the cost and could you bundle it with other services? 17

18 Likelihood to Subscribe $59.95 per Month Q16. How likely would you be to subscribe to Gigabit Internet service offered by the City if it cost $59.95 per month? (asked of all respondents; n=344) 100% 90% 80% 70% 60% 50% 12% 10% 31% Not at all likely Not very likely Somewhat likely Very likely to subscribe Definitely would subscribe 40% 30% 20% 10% 24% 22% 47% are Likely to subscribe Respondents who are aware of their current Internet speed are more likely (63%), and so are those who were already aware of Gigabit (58%). 0% 18

19 Main Concerns About Subscribing To Gigabit Q17. What would be your main concerns, or what keeps you from saying you definitely would subscribe to a Gigabit Internet service offered by the City if it cost $59.95 per month? (n=266) Asked of all who did NOT say Definitely would subscribe in Q16. Price / Overall value 35% Total monthly cost without bundled services 23% Need more information 7% Convenience of bundling multiple services Reliability concerns / Quality concerns / City is unproven Hassle of transitioning to a new service 4% 7% 7% 0% 10% 20% 30% 40% 50% 19

20 Influence of Having One Provider for Multiple Services Q18. We d like to know how much of a factor would having one provider for multiple services have on your decision whether to switch your Internet service to Gigabit Internet provided by the City. (n=292) Asked of all who bundle services 100% 80% 60% Respondents with Triple Play are more likely than those with Internet + Phone bundles to indicate Strong Influence (29% vs. 19%). 40% 20% 24% 18% 32% 26% 0% No influence Very little Some influence Strong influence 20

21 Main Reason Why Bundling Has Influence Q19. What are the main reasons it has influence on your decision about whether to switch your internet service? (n=168) Asked of all those indicated Some influence or Strong influence on Q18; Multiple responses were allowed. 100% 80% 60% 55% 40% 43% 20% 15% 23% 0% Overall monthly cost is usually lower when you bundle Convenience of making one payment for multiple services Easier to get support from one provider for all services Other reasons 21

22 Likelihood to Subscribe if Monthly Internet Price is $59.95 OR Total Monthly Cost Would be the Same as it is Now Q20A. [asked of those who bundle] If your total monthly cost ended up being the same as what you're paying now for all bundled services including Internet how likely would you be to subscribe to Gigabit Internet service offered by the City? (n=344) responses from those who bundle were merged with those who don t bundle Internet with other services. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 9% 7% 23% 26% 35% 61% are Likely Not at all likely Not very likely Somewhat likely Very likely to subscribe Definitely would subscribe 0% 22

23 100% Likelihood to Subscribe To Gigabit Internet Service (of those who Currently Bundle) Q20A. [asked of those who bundle] If your total monthly cost ended up being the same as what you're paying now for all bundled services including Internet how likely would you be to subscribe to Gigabit Internet service offered by the City? (n=292) asked of those who currently bundle. 80% Based on Internet cost of $59.95 Based on total monthly (bundled) cost same as it is now 60% 40% 20% 12% 8% 11% 7% 33% 23% 24% 26% 20% 36% 0% Not at all likely Not very likely Somewhat likely Very likely Definitely would subscribe 23

24 Likelihood to Subscribe if Monthly Internet Price is $59.95 OR Total Monthly Cost Would be the Same as it is Now (likelihood lowered for respondents with <$150 bundled monthly cost) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 11% 9% 26% 26% 29% 55% are Likely to subscribe Not at all likely Not very likely Somewhat likely Very likely to subscribe Definitely would subscribe 0% 24

25 Demographics Age Group: n = to 24 1% 25 to 34 3% 35 to 44 19% 45 to 54 29% 55 to 64 23% 65 to 74 17% 75 and over 7% Gender: n = 344 Male 48% Female 52% Children in Home: n = 340 Yes 42% No 58% Mean number of children in the home 2.1 Adults in Household: n = 340 One 15% Two 64% Three 17% Four or more 4% Mean number of household adults

26 Demographics (Continued) Annual HH Income: n=257 Less than $40k 5% $40k to less than $75k 16% $75k to less than $100k 14% $100k to less than $150k 23% $150k or more 41% Zip Code: n= % % Phone type: n=342 Cell 37% Landline 63% 26

27 Business Findings 27 Pivot Group LLC 2016 City of Lake Oswego Gigabit Broadband Demand Assessment

28 Current Internet Provider Q5. Can you tell me what company you use to access the Internet at home? (n=103) 100% 80% 83% 60% 40% 20% 0% 8% 5% 2% 2% Comcast/Xfinity CenturyLink Integra Frontier Other 28

29 Stated Monthly Internet Cost Q7. Can you tell me the average monthly amount you re paying for your Internet service? (n=102) Asked of all respondents 65% (62) of respondents knew their unbundled Internet bill amount. Total Total answering: n=62 Less than or equal to $150 63% More than $150 37% Mean: $167 29

30 Bundle Type Q6A. Do you receive other services from the same provider, such as telephone or TV services? (n=103) 100% 75% have one provider for two or three services. 80% 60% 40% 20% 0% 37% Internet and Phone 27% 25% 5% Triple Play Internet Only Internet and TV 30

31 Stated Internet Speed Subscribed To Q9. What is the download speed in megabits per second that you are paying for? (n=33) 30% (33) of respondents overall are aware of the Internet speed they re subscribed to. Total Total answering: n=33 Less than 50 Mbps 45% 50 Mbps or faster 55% Mean: 56 Mbps 31

32 Satisfaction with Internet Service Attributes By Company Size Q11. Using a 1 to 10 scale with 1 being "not at all satisfied" and 10 being "very satisfied," how satisfied are you with the following? (n= ) Shown are mean scores 2 to 4 Employees 5 to 19 Employees 20 or more Employees Total answering: n=27 n=51 n=25 The reliability of your Internet connection The speed of your Internet connection The overall value you receive The customer service of your Internet provider The monthly price for Internet service

33 Satisfaction with Internet Service Overall Q12. Using a 1 to 10 scale with 1 being "not at all satisfied" and 10 being "very satisfied," how satisfied are you with your Internet service provider overall? (n=102) 100% 80% Mean Rating: % 40% 20% 0% 1% 2% 1% 2% 1 Not At All Satisfied 15% 8% 21% are very satisfied (9 10 rating) 26% 25% 10% 11% Very Satisfied 33

34 Satisfaction with Internet Service Overall By Company Size Q12. Using a 1 to 10 scale with 1 being "not at all satisfied" and 10 being "very satisfied," how satisfied are you with your Internet service provider overall? (n=102) Mean Rating Overall: to 4 employees (n=27) to 19 employees (n=51) Significantly higher or more employees (n=24) 34

35 Likelihood to Recommend Internet Providers Q14. How likely is it that you would recommend your current Internet service provider to a friend or colleague, using a scale from 1 to 10, with 1 being "Not at all likely" and 10 being "Very likely"? (n=101) 100% 80% Net Promoter Score: 24 60% 40% 20% 0% 9% 1 Not At All Likely 1% 49% Detractors (1 6 rating) 5% 7% 23% 4% 17% 10% 9% 25% Promoters (9 10 rating) 16% Very Likely 35

36 Net Promoter Score by Company Size Q14. How likely is it that you would recommend your current Internet service provider to a friend or colleague, using a scale from 1 to 10, with 1 being "Not at all likely" and 10 being "Very likely"? (n=101) 100% 80% 60% 40% 20% 0% 20% 40% 60% 80% 100% Net Promoter Score Overall: 24 41% 2 to 4 employees (n=27) 27% 5 to 19 employees (n=51) 4% 20 or more employees (n=23) 36

37 Awareness of Gigabit Q15. Prior to this survey, had you heard of Gigabit Internet? (n=103) 49% of respondents say they re aware of Gigabit Internet. 37

38 Would You Like to See the City Offer Gigabit Internet Service? 100% Q16A. If the price was acceptable, would you like to see the City offer a fiber network and Gigabit Internet service? (n=103) 80% 78% 60% 40% 20% 0% 9% 7% 7% Yes No It depends I don t know enough about it to know whether I d say yes or no 0% Doesn t matter to me one way or the other 38

39 Reasons Why Not Q16B. Can you tell me the reason why you would not like to see the City offer a fiber network and Gigabit service? (n=9) Asked of those who answered No to Q16A Top Themes: Government shouldn't be involved / Leave to private sector Count Unable to bundle all services 2 I am not in favor of the city government or any government providing these kinds of services. They should stay out of Internet and let the private sector provide these services. Any time you have the government involved with private industry, it does not work. 7 The city needs to stick to fixing pot holes. I don't want them in any private business like this at all. Because I wouldn't be able to keep all my services together like I have with Comcast, I bundle and will continue to bundle. So unless I was able to bundle everything with the city, I wouldn't have interest in having this in Lake Oswego. 39

40 Information Needed to Decide Q16C. What more would you need to know about the City offering a fiber network and Gigabit internet service? (n=9) Asked of those who answered It Depends or I don't know enough about it to know whether I'd say yes or no to Q16A Top Themes: Count Reliability concerns 4 City monopolizing Internet service 2 Bundle / Tie in with phone service 2 Cost associated 2 Would the City then become the sole provider of Internet in Lake Oswego, driving Comcast out? Because if all the competition was removed my answer is no. I would want to look at the cost involved and all the unknowns that would surely need answering once the City moved forward like reliability and ease of change. How will the City service this if there is a problem? Will this service be able to tie in with our phone system? 40

41 Likelihood to Subscribe Same Price Q17. How likely would your organization be to subscribe to Gigabit Internet service offered by the City if it cost the same amount per month as you re paying now? (n=103) 100% 90% 80% 70% 60% 50% 5% 13% 25% Not at all likely Not very likely Somewhat likely Very likely to subscribe Definitely would subscribe 40% 30% 20% 10% 34% 23% 57% are Likely to subscribe Respondents who indicated their speed needs aren t being met are more likely (77%). 0% 41

42 Main Concerns About Subscribing To Gigabit Q18. What would be your main concerns, or what keeps you from saying very likely to subscribe to a Gigabit Internet service offered by the City same amount per month as you re paying now? (n=43) Asked of all who responded Very likely or less to Q17. Top Themes: Count Concern about unbundled costs 9 Government shouldn't be involved / Leave to private sector Satisfied with current service 5 Hassle of transitioning to a new service 5 Convenience of bundling multiple services 5 Government ran. I am not a fan of government, usually when government is involved with these types of services they don't run well. 6 l would have to look at this closely, break down all the costs involved with separation of phone and Internet. Cost. I bundle service so if the Internet stayed the same, I still would have to use another provider for phone and would not get it at the same price as when bundled with Internet, so I would pay more. 42

43 Likelihood to Subscribe Same Speeds Q19. How likely would your organization be to subscribe to Internet service offered by the City if your speed was the same as it is now, but you would pay a substantially lower amount per month than you re paying now? (n=103) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 5% 18% 29% 26% 21% 48% are Likely to subscribe Not at all likely Not very likely Somewhat likely Very likely to subscribe Definitely would subscribe 0% 43

44 Main Concerns About Subscribing To Gigabit Q20. What keeps you from being more likely? (n=49) Asked of all who responded Very likely or less to Q17. Top Themes: Count Concern about unbundled costs 16 Reliability concerns / City is unproven 12 Satisfied with current service 8 Hassle of transitioning to a new service 8 Would prefer higher speeds over lower prices 6 The Internet might be cheaper than what we pay now, however I would have to look at phone costs, that would be higher when not bundling with Internet. What would be the level of service reliability we could expect? We are content with Comcast and are not looking at making changes. If the City can lower the Internet price substantially, I would then at least take a look at it, splitting up the bundle. Price is very important. Dependable service is also a criteria we look at. 44

45 Influence of Having One Provider for Multiple Services Q21. Currently you pay only one provider for multiple services including Internet. We d like to know how much of a factor having one provider for all your business services would be in your decision whether to switch your Internet service to Gigabit Internet provided by the City. Would it have strong influence, some influence, very little influence or no influence on your decision? (n=77) Asked of all those who bundle services 100% 80% 60% 40% 20% 18% 19% 36% 26% 0% No influence Very little Some influence Strong influence 45

46 Main Reason Why Bundling Has Influence Q22. What are the main reasons it has influence on your decision about whether to switch your internet service? (n=48) Asked of all those indicated Some influence or Strong influence on Q21; Multiple responses were allowed. 100% 80% 60% 52% 40% 38% 29% 20% 8% 0% Convenience of making one payment for multiple services Overall monthly cost is Easier to get support lower if you bundle with from one provider for all one provider services Other reasons 46

47 Firmographics Employees at location: n = 103 2to 4 26% 5to 9 26% 10 to 19 23% 20 to 49 18% 50 to 74 3% 75 or more 3% Employees Using PCs: n = 103 2to 4 38% 5to 9 30% 10 to 19 17% 20 to 49 11% 50 to 74 2% 75 or more 2% #of Locations: n = 103 Only 1 69% 2or more 31% 47

48 Firmographics (Continued) Industry: n=103 Health Care (hospital/clinic, physician, dentist) 17% Business Services/ Consulting 15% Finance, Insurance, Real Estate 15% Retail 11% Manufacturing 6% Construction 5% Legal 5% Restaurant / Food service / Bar 4% Education/Schools / Libraries 3% Nonprofit 3% Automotive 2% Hospitality/Recreation 2% Wholesale 2% Transportation/Trucking/Hauling 1% Other 12% Title: n=103 Owner 35% Manager / COO 30% President / VP 13% Executive Director 5% Other 17% 48

49 Key Findings & Conclusions 49 Pivot Group LLC 2016 City of Lake Oswego Gigabit Broadband Demand Assessment

50 Pivot s Gigabit Take Rate Estimates Months from Launch Conservative (bare minimums based on overstatement bias formula): Residential: 32.6% Business: 32.2% Achievable (depending on total monthly cost and awareness growth): Residential: 37.2% (if customer s total monthly unbundled cost will be less than $150) Business: 34.2% (if customer s total monthly Internet cost will be less than $150 and reliability concerns are alleviated) 50

51 More Findings and Conclusions In the City s favor: 79% of residents and 78% of businesses would like to see the City offer a fiber network and Gigabit Internet service. High proportion of speed hungry residents Mbps is well above the national among those aware of their speed. The actual average is 12 Mbps, aware or not. Awareness of Gigabit is the highest we ve ever seen in any community, and it correlates strongly with likelihood to subscribe. Satisfaction with Comcast and CenturyLink is dismal at best. A new market entrant could do far better on price, value and customer service, in addition to speed. When it comes to Internet service, it seems obvious the citizens of Lake Oswego want a better provider. 51

52 More Findings and Conclusions Things to ponder and address: The hassle factor of switching and the new cost of ALL services that now include Internet service from the City. Efforts to make this a smooth process are essential. There are many campaigns that educate people on the benefits of high speed Internet and tell stories of how it can improve the lives of their family members. Being perfect out of the gate will advance the buzz about the City staying well ahead of technology trends and the needs of its community. Promotional activities are HUGELY effective! Build awareness of high speed Internet and how it benefits families and Lake Oswego businesses. 52

53 Thank you City of Lake Oswego January 2016