20-Sep-12 – Keeping 78,000 DirecTV subscribers satisfied might be challenging for any company but for MDU Communications International Inc., it would be a miracle. Many of its customers would agree the New Jersey company has at least excelled in one thing, customer complaints.

A Google search of “MDU Communications complaints” returns more than 28,000 results. On Yelp.com alone, it has six reviews and all are negative. Among them…

“Maybe the worst customer service of any company I have ever dealt with.”

“Horrible, just horrible…the worst company I have ever seen. I would be willing to pay money to not have to deal with them.”

“I would compare MDU to the mafia.”

In downtown Chicago, residents of Marina City are not billed directly by MDU for basic satellite TV and high-speed Internet service, and so not everyone must interact with the company’s Chicago office. When they do, however, the experience is often regrettable.

Problems include disputes over automatic payments, service technicians not showing up as scheduled but customers being charged anyway for the “missed appointment,” and customer service representatives sounding unfamiliar with the products they sell.

All that might change later this year if shareholders of MDU agree to be taken over by a Minnesota company. While Multiband Corporation, with more than twice as many customers, is no stranger itself to complaints, its CEO has at least acknowledged the problem with MDU and says customer service will be among the improvements if the deal goes through.

“The service complaints, I think, are probably subject to the fact that they outsource their call center and probably don’t do a very good job of answering the phone,” said James Mandel on Monday, “which is something that we do a great job of.”

Multiband is the largest DirecTV “master system operator” for multiple-dwelling units, meaning it offers DirecTV programming to apartment buildings and condominiums. They have 116,000 of their own subscribers plus another 81,000 that they support for other operators. They have 3,700 employees at 33 field offices in 33 states.

MDU Communications has 78,725 subscribers – up five percent from last year – at about 800 properties. Little more than 100 employees work for MDU in 17 states from six regional offices, including Chicago. MDU did not respond to a request for the number of customers they have in Chicago.

Losses and debt mount at MDU

In 2011, MDU Communications had a net loss of almost $7.4 million. The year before, it lost $8.4 million. $29.7 million in debt, the company warned shareholders in its 2011 annual report that it would seek financing or “the sale of certain assets” to raise money.

The company tried lowering expenses last year from the year before, including a one-percent cut into its customer service expenses.

Based in Totowa, New Jersey, just outside New York City, MDU focuses on multi-unit dwellings in the biggest U.S. cities. It has regional offices in New York, Chicago, Dallas, Miami, and Washington D.C.

MDU negotiates with building owners and managers to design, install, own, and operate equipment that provides digital satellite television, high-speed Internet, and other services to residents. It earns a commission from DirecTV for every new subscriber and then gets a commission on fees charged to each subscriber. Incorporated in 1999, MDU has had a deal with DirecTV since 2000.

Customer service “one of many” changes, says Multiband CEO Plans for the merger were announced on July 10. It will cost Multiband $42.6 million to acquire MDU Communications, still a good deal as the company figures it would cost at least $56 million to even try to add 75,000 new subscribers on its own – with no guarantee of success. Improving customer service, says Multiband CEO James Mandel (below), would be “just one of many operational changes we would make should this transaction go through.” “We expect to answer the phone and react to people’s issues as they occur,” he says. “We’ll certainly be upgrading all of the facilities with the latest and greatest technology including very fast high-speed Internet service. That would be the main cornerstone of our operation.” Subject to a final report on how much MDU Communications is worth, approval by lenders, a vote by shareholders, and other undisclosed conditions, the transaction is expected to close during the last three months of 2012.

Customer service aside, MDU the best bet for one downtown condo

At Marina City, the condo association pays MDU and then passes the cost on to unit owners. Marina Towers Condominium Association is currently three years into a five-year contract.

Residential property manager David Gantt (left) says he will use those two remaining years, potentially with Multiband running MDU, to “see how we like the service before we get into renewal negotiations.” He says MDU was the only real option for Marina City in 2005. RCN was asked to bid but declined because they could not afford to replace the infrastructure. AT&T was not in the television business at the time. Comcast’s bid was twice as high as MDU’s.

Before digital television came to Marina City, television reception was, recalls Gantt, “horrible,” with analog signals bouncing off other buildings and single-shield cable picking up multiple signals of five stations.