Brand Loyalty and Satisfaction for Telecom Players in India

7/28/2019 Brand Loyalty and Satisfaction for Telecom Players in India

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A REPORT

ON

Loyalty Based Program

For

Mobile Telecom Operators

By

Pragya Modi

12BSP0871

3HD Media


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1. INTRODUCTION

1.1 Telecommunication Industry - Introduction

Access to telecommunication services has become the prime mover of the socio

economic development in this information age. The role of Telecommunication, an

engine of growth with multiplier and the social leveler, has been globally well

recognized. To bridge the prevailing information gap between the connected and the

not connected , gov ernments the world over have endeavored to ensure the ubiquity of

telecommunication nationwide. Provision of universal access to basic telecommunication

services at affordable price is considered important by the governments of all countries

and mandated by their policies, regulation or legislation. The Indian telecom market has

been displaying sustain high growth rates. Riding on expectation overall high economic

growth and consequent rising income levels, it offers an unprecedented opportunity for

foreign investment. A combination of factor is diving growth in the telecom market,

promising rich return on investment.

Universal service is a dynamic concept that provides for nation-wide coverage, non-

discriminatory access, and widespread affordability. Nationwide coverage requires huge

investment and also entails high operating cost. To meet the criterion of affordable

pricing, the revenue may fall short of cost and hence cause deficits. The universal service

policy has to reconcile the three contending criteria, i.e. availability, accessibility and

affordability.

Availability Provision of telephone service, whenever and wherever required, i.e. even

in uneconomic areas such as rural and remote.


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Accessibility Uniform, Non-discriminatory tariff in the service area- No discrimination

in terms of price, service and quality regardless of geographical location, based on the

geographical averaging.

Affordability telephone service should be priced so that most users can afford it. Inuneconomic areas, this may mean tariff such as rental below cost.


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The telecom industry is one of the fastest growing industries in India. India has

nearly 200 million telephone lines making it the third largest network in the world after

China and USA. With a growth rate of 45%, Indian telecom industry has the highest

growth rate in the world.

- Indias mobile phone subscriber base is growing at a rate of 82.2%.

- China is the biggest market in Asia Pacific with a subscriber base of 48% of the total

subscribers in Asia Pacific. Compared to that India s share in Asia Pac ific Mobile

phone market is 6.4%. Considering the fact that India and China have almost

comparable populations, India s low mobile penetration offers huge scope for growth.

1.2 History of Indian Telecommunications

Started in 1851 when the first operational land lines were laid by the government

near Calcutta (seat of British power). Telephone services were introduced in India in

1881. In 1883 telephone services were merged with the postal system. Indian Radio

Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the

foreign telecommunication companies were nationalized to form the Posts, Telephone

and Telegraph (PTT), a monopoly run by the government's Ministry of Communications..

The first wind of reforms in telecommunications sector began to flow in 1980s when the

private sector was allowed in telecommunications equipment manufacturing. In 1985,

Department of Telecommunications (DOT) was established. It was an exclusive provider

of domestic and long-distance service that would be its own regulator (separate from the

postal system). In 1986, two wholly government-owned companies were created: the

Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and

MTNL.

In 1990s, telecommunications sector benefited from the general opening up of the

economy. Also, examples of telecom revolution in many other countries, which resulted

in better quality of service and lower tariffs, led Indian policy makers to initiate a change

process finally resulting in opening up of telecom services sector for the private sector.


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Telecommunication sector in India can be divided into two segments: Fixed Service

Provider (FSPs), and Cellular Services. Fixed line services consist of basic services,

national or domestic long distance and international long distance services. The state

operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic

services. Private sector services are presently available in selective urban areas, and

collectively account for less than 5 per cent of subscriptions. However, private services

focus on the business/corporate sector, and offer reliable, high- end services, such as

leased lines, ISDN, closed user group and videoconferencing.

Cellular services can be further divided into two categories: Global System for Mobile

Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector

is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector isdominated by Reliance and Tata Indicom. Opening up of international and domestic long

distance telephony services are the major growth drivers for cellular industry. Cellular

operators get substantial revenue from these services, and compensate them for reduction

in tariffs on airtime, which along with rental was the main source of revenue. The

reduction in tariffs for airtime, national long distance, international long distance, and

handset prices has driven demand.

1.3 Cellular Service

1.3.1 Overview

1. There are five private service operators in each area, and an incumbent state

operator. Almost 80% of the cellular subscriber base belongs to the pre-paid

segment.

2. The DoT has allowed cellular companies to buy rivals within the same

operating circle provided their combined market share did not exceed 67 per

cent. Previously, they were only allowed to buy companies outside their

circle.


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1.3.2 Growth Drivers

Opening up of international and domestic long distance telephony services are

growth drivers in the industry. Cellular operators now get substantial revenue from these

services, and compensate them for reduction in tariffs on air time, which along with

rental was the main source of revenue. The reduction in tariffs for airtime, national long

distance, international long distance, and handset prices has driven demand.

1.3.3 Types of services:

The telecommunication industry enrolls in itself a varied range of services that

has been improving over a period of time. This services includes a various kind of

services that are

[A] Mobile services

Mobile products can be divided into two parts on the basis of payments.

1. Prepaid

2. Postpaid

There are two kinds of products in the mobile industry on the basis of technology.

1. GSM-product & services

GSM is by the most broadly deployed digital wireless standard in the world. It has over

400 million customers to date in over 150 countries, with service provided by over 400

operators. Other technologies used are CDMA & TDMA.

2. CDMA- product & services

CDMA is a digital communication technology to provide PCS service used by some

carries in which an air interface assigns a code to each data packet sent over the air. The

name CDMA is often used to refer to the IS-95 communication standard.


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With both the above products all the operators are providing following services.

a) Call management services

b) SMS based services

c) Value added serviced) Roaming

e) Other services operator specific

(a) Call management services

CLIP-Caller line identification presentation

Call wait/ call hold

Call conference

CLIR- caller line identification restriction

Itemized bill

Call Divert

Call Barring

Missed Call Alerts (MCA)

Voice Mail Service

(b) SMS based services

Text messaging

Mobile mail

Magic Messaging (Group Message)

Global SMS

M-chat (chatting thru SMS)

M-chat (messenger)

(c) Value Added Services

News

Travel

Dictionary


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Stocks

Mobile banking

Reminder

TV services

Ringtone

Logos

Picture messages

Y! mail

Y! messenger

Cricket

Astrology

Flash SMS, Blink SMS

Caller tune or dialer tone

(d) Roaming

Within India

-in circle

-outside circle

Outside India

(e) Other operator specification services

GPRS Services (GSM only)

-polyphonic ringtone

-java games

-downloads

-news-cinema

-3D wallpapers

-Web site

Fax and data services


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Enterprise business solution

PC to phone telephoning

Device based internet telephoning

Domain based e-mail services

[D] Others

1. V-SAT (Very Small Aperture Terminal)

Data communication at speed up to 64 kbps

Support of X.28 & X.25 protocols for data communications.

Voice facility on the V-SAT with connection to public telephone

network (PSTN of BSNL)

Access to BSNL s RABMN network & I -net phase 1 & 2 networks.

Access to international data networks through GPSS of VSNL.


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BHARTICELLULAR

LTD.

Corporatestructure

Bharti Cellular td. Is the mobile operating arm of the Bharti

Televentures.

Bharti Televentures is 28.5%-owned by SingTel. The operator

is listed on the national, Mumbai and New Delhi stock

exchange.

Bharti cellulars offer mobile services under its Airtel brand.

Financial andoperational

performance

Bharti reported mobile revenue of 13,431 Crores for the year

2008-09- a year on-year growth of 63%.

Bharti had 93.92 mn mobile subscribers for year 2009, at

growth rate 51.53%.

Companystrategy

Bharti is the largest GSM player in the Indian mobile service

market.

The company has operational networks in 22 out of 23 circles

across India.

The operator is investing in expanding its network nationwide.

It is working with Ericsson, Siemens and Nokia in a network

management outsourcing arrangements to help speed

deployment and increase the efficiency of its network

expansion.

Products andservices

Bharti operates a GSM network, over which it is currently

rolling out edge technology.

It offers pre-paid and post-paid voice, MMS and Internet

access services.


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BSNL

Corporate

structure

BSNL is state owned incumbent operator, serving all areas of

the country apart from Mumbai and New-Delhi.

BSNL offers mobile services under the brand name CellOne.


performance

BSNL reported a mobile subscriber base of 52.15 mn with

growth rate 58.70%.

Companystrategy

BSNL entered in the mobile market in 2002, some six years

after the first private operators started services.

The company has operational a networks in 23 out of 23

circles across India (it does not operate in Mumbai and New

Delhi).

The operating is targeting lower-income users (it is the largest

GSM operator in the poorer states of Bihar, Orissa, Assam, and

North-East.

BSNL has followed Reliance s aggressive tariff stance in the

pre-paid sector, while also lowering its fixed national tariffs to

improve its competitiveness in the voice sector.


BSNL operates a near-nationwide GSM network, covering

every operating circle expect Mumbai and New Delhi.

It offers pre-paid and post-paid voice services.


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VODAFONE-ESSAR

Corporatestructure

It is the joint venture of the England based mobile group and

the Indian conglomerate Essar Group.


performance

Vodafone reported a mobile subscriber base of 68.77 mn with

growth rate 27.85%.

Companystrategy

Vodafone Essar previously Hutchison-Essar entered the

mobile market in 1995 in the first wave of operator licensing.

The operator has a presence in all four metro circles in India.

The operator is expanding its business and increasing market

share through a combination of growth by acquisition (it has

acquired the operation of Fascle and Aircel in the year to

September 2004) as well as network investment.

The operator launched EDGE services in July 2004.


Vodafone- Essar currently offers GSM services across 22

circle in India. It offers Pre-paid and Post-paid voice, MMS and Internet

access services.


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IDEACELLULAR

Corporatestructure

Idea cellular is owned by AT&T group


performance

Idea cellular had 38.89 mn subscribers with growth rate of

62.03%.

Companystrategy

The operator is currently placed fourth in the mobile market.

Telecom Malaysia and Singapore s STT Telemedia are poised

to become the largest shareholders in the largest shareholders

in the operator, once they acquire AT&T s 33% stake in it.

The operator is expanding primarily through acquisition- in

June 2004, it fully incorporated the Kerala, Haryana and

UttarPradesh West Operation of Escotel. The operator is also

interested in making further acquisition in the market but such

moves must wait until the shareholder structure of the operator

has been finalized.


Idea offers GSM services across 21 circles in India, including

the metro area of the Delhi.

It offers Pre-paid and Post-paid voice, MMS and Internet

access services.


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RELIANCECOMMUNICATION

Corporate structure

Reliance communication is the local telecom service

provider unit of diversified conglomerate Reliance Group

that is Anil Dhirubhai Ambani Group.

The company offers mobile services under the brand

Reliance Mobile.


performance

Reliance Mobile had 72.67 mn subscribers with growth

rate of 55.84 %.

Company strategy

Reliance is the second largest player in the mobile servicemarket.

The company targets the prepaid mobile market in india,

primarily with its CDMA service, which offers both full

and (cheaper ) limited mobility services to end users.

The operator is aggressively pricing its prepaid services

and the particular on net tariffs, as a means of increasing

its market share.

Rural sector is targeted through launch of tariffs low

priced handset with a price range of Rs 999 to Rs 18000.


The operator has CDMA2000 1x network, covering 23

circles operating across India

Reliance offers prepaid and post-paid voice services,

International Calling Card, as well as MMS and Internet

access. It also offers limited mobility services over its

WLL network.


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3. INDUSTRY ANALYSIS

3.1 Porters five force model:

Barriers to entry

Product differentiation very difficult Licensing requirement Investment in technology & network Government standards and laws

Bargaining powerof customer

Customersloyaltiesare harderto retain

Switchingcosts arelowerbecause of no. of

player inmarket

Easyavailabilityof products& services

Rivalry among competitors

high competition inmajor player in telecomindustry

high competition due toprivate sector andpublic sector operators

CDMA providerspushing hard

Low margin basedintense competition

Bargaining powerof supplier

Limited noof playersinequipmentmarket

Networkandtechnologyproviders

are limitedIn numbers

A newtechnological serviceprovidedby firmsdependson supplier

Threats of substitutes

Mobile subscribersuse e-mail, fixed line,CDMA and vice-versa

Technologicaldevelopment makingsubstitute moreaccessible


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FORCE -1 RIVALRY AMONG THE EXISTING PLATERS

Rivalry among the existing players is intense even though only few players are permitted

in each of the service areas or circles. The rivalry among existing players in the telecom

industry is moderately high. The followings are the main reasons for such type of rivalry.

Mergers/acquisitions and joint venture

Rivalry is high in India because due to the mergers and acquisition among the

existing players try to gain market share and economies Vodafone Essar joint

venture scales. We can take example Vodafone Essar joint venture, Airtel

acquired Hexacomm, and Idea acquired Escotel.

The number of competitors:

Rivalry intensifies as the number of competitor s increases and as competitors

become more equal in size and capability. In telecom industry there are number

of competitors exist and also increasing. So that it is harder for one or two firms

to win the competing battle and dominate the market. Further 64 more new

player are given license to operate in india.

Demand for the product:

Rivalry is usually stronger when demand for the product is growing. Here the

demand for the mob ile is growing faster. The demand in all the user groups i.e.residential users, business users, educational users and health users is increasing

at higher rate and as a result of this the Rivalry is increasing.

Use of price cut methods and other competitive weapons:

The higher use of price cut methods and other competitive weapons shows that

the Rivalry is higher in the industry. Here all the telecom companies like BSNL,

RELIANCE, TATA, AIRTEL, VODAFONE, IDEA and all others companies

are cutting their prices for compete the other companies. They try to provide

better services like instrument, coverage facility, internet facility and some other

extra services. So we can say that the Rivalry is moderately high in this industry.

Dissatisfaction of competitors:

Rivalry is stronger when one or more competitors are dissatisfied with their

market position and launch moves to bolster their standing at the expense of the


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rival. In telecom industry, especially in the mobile sector, the competitors are not

satisfied with their current market position and they are trying to capture more

market share by using various competitive weapons. And as a result of such

dissatisfaction the Rivalry is becoming stronger.

High exist barriers:

Rivalry tends to be more vigorous when it cost more to get out of business than

to stay in and compete. As the investment of the various companies is very high

for entering in such industry (like reliance has invest thousands crore of rupees

for establishing fiber optics network, BSNL has invest high amount of money for

establishing is network), it is not easy for the companies to get out of the

business easily so the only way for them is to stay in the business and compete.

So the Rivalry is high in this industry.


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FORCE-2 THREATS OF NEW ENTRANTS

Threats of new entrants are moderate in telecom industry because of the

high entry barriers to new inexperienced comer and foreign firms (like

Vodafone) who have already existence in more than one country as telecom

service providers. No surprise, in the capital-intensive telecom industry the

biggest barrier to entry is access to finance. To cover high fixed cost, serious

contenders typically require a lot of cash. When capital markets are generous, the

threat of competitive entrants escalates,. When financing opportunities are less

readily available, the pace of entry slows. Meanwhile, ownership of a telecom

license can represents a huge barrier to entry. There is also a finite amount of

good radio spectrum that lends itself to mobile voice a nd data applications. Inaddition, it is important to remember that solid operating skills and management

experience is fairly scarce, making entry even more difficult.

High entry barriers

Because of the barriers to entry, it becomes very difficult for the new players to

operate in India because of the government licensing policies.

High competition

Competition in telecom industry is very high because of numbers of domestic

and foreign players into the market and their capability of providing innovative

services and very well know-how of technology.

High capital investment

One of the important factor to consider while entering into the telecom industry

is the huge capital requirement for the investment.

Older and well established players who have a nationwide network

Presently, there are many no. of strong players like Bharti Airtel, BSNL, MTNL,

Vodafone, Idea, VSNL, and Reliance into the market with nationwide network.

These players have established their position into the market as well as in the

mind of customer also.


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License fee

New entrance are required to pay the license fee, entry fee and fixed the revenue

share license fee at 6 percent and follow the rollout obligations.

Continuously evolving technology

The technology in telecom industry is changing and on mobile its changes from

1G to 3G at very fast rate as the every player in the industry is coming with new

services and application.

Falling tariffs

Call tariffs are declining in telecom industry due to high competition, which

results in less revenue for telecom operator.


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FORCE-3 THREATS OF SUBSTITUTES

The threats from the substitute products a re moderate in the telecom industry.

Threats from wireless in local loop (WLL) based limited mobility was

considerably reduced after TRAI imposed the mobility of WLL based basic

operator to 25km revenue share domestic long to 5%. The threats are depend on

the following tree factors.

Whether attractive priced substitutes are available

Whether buyers view the substitutes as being satisfactory in terms of

quality, performance and other relevant attributes.

Whether buyers can switch to substitute easily.

The following are some substitute for the telephone and mobile.

On line chat:

On line chat, which can be done through internet is a major substitute for

the telecom services. People can communicate with each other using web

cameras and microphones. This substitute is good in performance as well

as cheaper in price. So the industry has significant threats from growth of

this substitute facility. Obviously earlier this facility required the use of

telephone lines but

Now a day s using radio lines and other facilities one can use this facility

without using telephone lines.

E-mail:

The faster way of communication is through electronic mail. It is cheapas well as faster way of communication. But the main disadvantage of

this substitute is that the use of email is not easy for everyone in compare

of simple mail so far as backward areas of India are concern. So we can


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FORCE-4 BARGAINING POWER OF SUPPLIER

At first glance, it might look like telecom equipment suppliers have

considerable bargaining power over telecom operators. Indeed, without high-tech

broadband switching equipment, fiber-optic cables, and mobile handsets and

billing software, telecom operators would not be able to do the job of transmitting

voice and data from place to place. But there are actually a large number of large

equipment makers around.

There are a number of domestic private players like Himachal Futuristic,

Global Telecommunication, Bharti Telecom, Tata Telecom, Shyam Telecom etc.

are serious players in the field. Nortel, Lucent, Cisco, Nokia, Alcatel, Ericsson,

Tellabs are just a few of the foreign supplier names. There are enough vendors,

arguably, to dilute bargaining power. The limited pool of talented managers and

engineers, especially those well versed in the latest technologies, places

companies in a weak position in terms of hiring and salaries.

In telecom industry the bargaining power of supplier is lower than

moderate. The main reasons are as following.

Grey markets The handset market is very competitive with substantially lower handsets

prices offered by the grey markets.

Number of suppliers

The numbers of telecom equipment suppliers are in big size. There are

many domestic as well as foreign players operating in India. With the

government putting in place an attractive trade and investment policy for

telecom equipments, it is expected that this step will intensify

competition, as it will attract foreign players into the telecom equipment

manufacturing sector. Some of the important measures announced by the

government include no industrial license required to set-up a

manufacturing unit; automatic approval of 100 per cent foreign equity;

full reparability of dividend and capital invested and confessionals import


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duties of five per cent for import of certain equipment (for cellular, ISP

networks).

Commoditization of communications equipments

Many communications equipments have been commoditized these days;

Thereby, the equipment providers had turned their focus to providing

good customer services in efforts to win customers.

Telecom industry consolidation

As the telecom industry consolidates, the number of communications

equipment buyers will decrease. In this environment, equipment buyers

(telecoms) are expected to gain more bargaining power over the

equipment providers. The communications equipment industry is likely to

go through its own wave of M&A. mergers will not only allow equipment

providers to gain back market power, but also at the same time refresh

their product portfolios with new and acquired technologies.

Government policy

With the government putting in place an attractive trade and investment

policy for telecom equipments. It is expected that this step will intensify

competition. Some of the important measures announced by the

government include to industrial license required to set-up amanufacturing unit; automatic approval of 100 per cent foreign equity;

full reparability of dividend and capital invested and confessionals import

duties of five per cent for certain equipment (for cellular, ISP networks).


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FORCE-5 BARGAINING POWER OF CUSTOMERS

For the telecom industry the bargaining power of the customer is

moderately low. The followings are the main reasons for this argument.

Low penetration rate

Penetration rate is low (compared to other countries with similar

economies and population) but demand is increasingly at a high rate.

Market fragmentation

Buyers are fragment with no influence on price or product even though

the new entrants of MTNL and BSNL as well as the option of WLL allow

them to switch services.

Switching cost

The switching cost of buyers to competing brands is relatively high.

Because switching from one service provider to another the customers

have to face many problems like changing the number, problem of

current account balance and problem of activation charge for new

connection. So they mostly prefer the existing connection instead of

switching to the new one.

The number buyers As the number of buyers is low the bargaining power of the customer is

high but here the number of buyers is very high so the customers are not

that much important for the companies and their bargaining power is low.

Buyers discretion in whether and when they purchase the product

Here the customers have not discretion in whether and when they

purchase the product. Because for ex. In mobile when the card is expiring

after some time; the customer has to recharge it within the given period to

remain its card number as it is.


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4. LITERATURE REVIEW

Debnath (2008), in his study, he explained that the prime focus of the service providers is

to create a loyal customer base by benchmarking their performances and retainingexisting customers in order to benefit from their loyalty. With the commencement of the

economic liberalization in 1991, and with a view to expand and improve telecom

infrastructure through the participation of the private sector, the Government of India

permitted foreign companies holding 51 percent equity stake in joint ventures to

manufacture telecom equipment in India. The Indian Government has announced a new

policy, which allows private firms to provide basic telephone services. There had been a

monopoly of the state-owned department of telecommunications. However, several

companies are expected to benefit from the policy change.

Kalavani (2006) in their study analyzed that majority of the respondents have given

favourable opinion towards the services but some problems exist that deserve the

attention of the service providers. They need to bridge the gap between the services

promised and services offered. The overall customers attitude towards cell phone

services is that they are satisfied with the existing services but still they want more

services to be provided.

Kumar (2008), in their study titled Customer Satisfaction and Discontentment vis-a-vis

BSNL Landline Service: A Study analyzed that at present, services marketing plays a

major role in the national economy. In the service sector, telecom industry is the most

active and attractive. Though the telecom industry is growing rapidly, India's telecom

density is less than the world's average telecom density as most of India's market is yet to

be covered. This attracts private operators to enter into the Indian telecom industry,which makes the Bharat Sanchar Nigam Limited (BSNL) more alert to run its business

and survive in the market.


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6. DATA ANALYSIS

6.1 Analysis of Demographic Variables:

1) Gender:

In this research, out of 258 respondents 72.86% are male and 27.14% are female.

2) Occupation:

In this research, out of 258 respondents, 51.55% are students, 23.25% are working

employees, 22% are running their own businness, 1% are retired from their work and 2%

are from other than these categories.

0

50

100

150

200

Male Female

Male (72.86%)

Female(27.14%)

Gender

0

20

40

60

80

100

120

140

STUDENT EMPLOYEE BUSINESS RETIRED OTHER

STUDENT(51.55%)

EMPLOYEE(23.25%)

BUSINESS (22%)

RETIRED (1%) OTHER (2%)

Occupation


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3) Type of Service User:

In this research, out of 258 respondents, 81.4% respondents are using pre-paid services

and 18.6% respondents are using post-paid services. So, it shows that there are more

number of pre-paid users than post-paid users.

4) Age:

In this research, out of 258 respondents, 10% are respondents are below age 20, 69% are

between age 20 to 30 years, 12% are between age 30 to 40, 5% are between age 40 to 50,

and 5% are from age above 50.

0

50

100

150

200

250

PRE-PAID POST-PAID

PRE-PAID(81.4%)

POST-PAID(18.6%)

Type of Service User

0

50

100

150

200

Below 20 20-30 30-40 40-50 Above 50

Below 20 (10%)

20-30 (69%)

30-40 (12%)40-50 (5%) Above 50 (5%)

Age


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5) Multiple Users:

In this research, out of 258 respondents, 37% consumers are using more than 1 MSPs

services and 63% consumers are using only 1 MSPs services.

6) Income:

In this research, out of 258 respondents, 13% are having income less than 1 lac, 20%

having income between 1 lac and 2 lacs, 28% having income between 2 lacs and 3 lacs,

18% having income between 3 lacs and 4 lacs, and 21% having income above 4 lacs.

0

50

100

150

200

Consumers using more

than 1 MSPs' services

Consumers using only 1

MSPs' services

Consumersusing more

than 1 MSPs'services (37%)

Consumersusing only 1

MSPs' services(63%)

Multiple Users

0

10

20

30

40

50

60

70

80

400K

400K (21%)

Income


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6.2 Mean Interpretation:

Overall Mean Table:

This mean table shows mean of each variable as responded by the respondents. If

we take cut-off mean as 3.5 then, there are several factors which have mean more than

3.5 and are highlighted in above table. From the respondents point of view, they a re

more satisfied to factors highlighted above. So, these 10 factors are more important to

them for their satisfaction.

Mean Table (All MSPs)

Variables Mean Value

Network coverage 3.85

Call rates 3.79

Roaming Facilities 3.66

SMSs 4.12

GPRS/Internet 3.57

Caller tunes 3.60

Various alerts 2.83

Availability of customer stores 3.98

Availability of recharge points/Bill-Payment option

4.35

Types of recharge vouchers/Plans 4.27

Customization 3.19

Query resolved by customer care 3.82

Waiting time for having connected withrepresentative

3.46


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6.3 Companywise mean tables:

1) AIRTEL:



3.5 and are highlighted in above table. From the respondents point of view, they are

more satisfied to factors highlighted above with Airtel. So, these 11 factors are more

important to them for their satisfaction.

Mean Table (AIRTEL)



Call rates 3.76


SMSs 4.43

GPRS/Internet 3.76

Caller tunes 3.87

Various alerts 2.98



4.51


Customization 3.48



3.97


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2) VODAFONE:




more satisfied to factors highlighted above with Vodafone. So, these 12 factors are more

important to them for their satisfaction. So, Vodafone customers are satisfied with all

factors taken in this research except various alert services.

Mean Table (VODAFONE)



Call rates 4.23


SMSs 4.32

GPRS/Internet 3.82

Caller tunes 3.71

Various alerts 3.26



4.79


Customization 3.60



4.05


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3) IDEA:




more satisfied to factors highlighted above with Idea. So, these 9 factors are more

important to them for their satisfaction. So, above table shows that Idea customer are not

much satisfied with call rates and roaming facilities which are part of basic services.

Mean Table (IDEA)



Call rates 3.42


SMSs 3.72

GPRS/Internet 3.56

Caller tunes 3.72

Various alerts 2.84



3.96


Customization 3.28



3.86


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4) BSNL:




more satisfied to factors highlighted above with BSNL. So, these 6 factors are more

important to them for their satisfaction. So, above table shows that BSNL customer is not

much satisfied with other services. They are also dissatisfied with VASs.

Mean Table (BSNL)



Call rates 3.79


SMSs 3.98

GPRS/Internet 3.02

Caller tunes 3.02

Various alerts 2.53



4.23


Customization 2.62



2.26


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5) RELIANCE MOBILE:




more satisfied to factors highlighted above with Reliance mobile. So, these 6 factors are

more important to them for their satisfaction. So, above table shows that Reliance mobile

customer is not much satisfied with other services and basic services. They are satisfied

with VASs most.

Mean Table (RELIANCE MOBILE)



Call rates 3.63


SMSs 3.74

GPRS/Internet 3.67

Caller tunes 3.78

Various alerts 2.33



3.78


Customization 2.63



2.59


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6.4 Chi-Square Tests:

Hypothesis 1:

Ho: Consumers satisfaction with Call rates of MSPs is not

significantly related to Income of consumers

H 1: Consumers satisfaction with Call rates of MSPs is significantly

related to Income of consumers

Income and Call rates Cross Tabulation

Income

Consumers satisfaction with Call rates of MSPs

2 3 4 5 Total

1 7 4 10 11 32

2 4 11 20 17 52

3 0 15 30 29 74

4 0 7 13 27 47

5 0 5 24 24 53

Total 11 42 97 108 258

Chi-Square Tests

Value df Significance

Pearson Chi-Square 42.542 12 .000

Likelihood Ratio 38.124 12 .000

Linear-by-Linear

Association

14.559 1 .000

N of Valid Cases 258

Here, significance value is 0.000 that is less than 0.05. So, null hypothesis is rejected and

alternative hypothesis is accepted. So, test shows that Consumers satisfaction with Call

rates of MSPs is significantly related to Income of consumers.


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Hypothesis 2:

Ho: Consumers satisfaction with Availability of Customer stores is

not significantly related to Age of consumers

H 1: Consumers satisfaction with Availability of Customer stores is

significantly related to Age of consumers

Age and Availability of Customer Stores Cross Tabulation

AGE

Availability of Customer Stores

1 2 3 4 5 Total

1 0 2 2 13 8 25

2 8 15 21 54 80 178

3 0 2 9 9 10 30

4 0 4 2 2 5 13

5 0 0 0 6 6 12

Total 8 23 34 84 109 258

Chi-Square Tests

Value df SignificancePearson Chi-Square 27.947 a 16 .032


Linear-by-Linear

Association

.012 1 .912


Here, significance value is 0.032 which is less than 0.05. So, null hypothesis is rejectedand alternative hypothesis is accepted. So, test shows that Consumers satisfaction with

Availability of Customer stores is significantly related to Age of consumers.


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Hypothesis 4:

Ho: Type of Service opted by the consumers is not significantly

related to Occupation of consumers

H 1: Type of Service opted by the consumers is significantly related to

Occupation of consumers

Service and Occupation Cross Tabulation

Occupation

Service

STU EMP BUS RET OTH Total

1 112 51 36 3 6 208

2 20 10 20 0 0 50

Total 132 61 56 3 6 258

Chi-Square Tests

Value df Significance

Pearson Chi-Square 13.585 a 4 .009


Linear-by-Linear Association

2.659 1 .103


Here, significance value is 0.009 which is less than 0.05. So, null hypothesis is rejected

and alternative hypothesis is accepted. So, test shows that Type of Service opted by the

consumers is significantly related to Occupation of consumers.


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6.5 ANOVA Tests:

Hypothesis 5:

Ho: Means of Consumers satisfaction with Network Coverage of

Vodafone, Airtel and Idea are same ( voda= airtel= idea )

H 1: Means of Consumers satisfaction with Network Coverage of

Vodafone, Airtel and Idea are not same ( voda airtel idea )

ANOVA

Sum of

Squares

df Mean Square F Sig.

Network

Coverage

Between Groups 3.333 2 1.666 1.528 .220

Within Groups 187.547 172 1.090

Total 190.880 174

Here, significance value is 0.220 > 0.05. So, there is not enough evidence to reject null

hypothesis. So, Null hypothesis is accepted. So, test shows conclude that the means of

Consumers satisfaction with Network Coverage of Vodafone, Airtel and Idea are same

(voda= airtel= idea ). It means that, consumers satisfaction with network coverage provided

by Vodafone, Airtel and Idea are almost same.

Hypothesis 6:

Ho: Means of Consumers satisfaction with Convenience of Vodafone,

Airtel and Idea are same ( voda= airtel= idea )

H 1: Means of Consumers satisfaction with Convenience of Vodafone,

Airtel and Idea are not same ( voda airtel idea )

ANOVA

Sum of

Squares

df Mean Square F Sig.

Convenience

Between Groups 10.315 2 5.157 10.235 .000

Within Groups 86.670 172 .504

Total 96.984 174Here, significance value is 0.000 < 0.05. So, null hypothesis is rejected. So, alternative

hypothesis is accepted & it shows that the means of Consumers satisfaction with

Convenience of Vodafone, Airtel and Idea are not same . It means that, consumers

satisfaction with convenience provided by Vodafone, Airtel and Idea are different. 6.7


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So, above table shows name of the extracted 10 factors by new 4 factors. The 4 new

factors are as follow.

Customized VASs Convenience

Network Coverage

Call Tariff

So, from this factor analysis, there are mainly 4 factors that influence the customers most.

6.8 Factor analysis: (Company wise)

The factor analysis for individual company s data shows same result as it was for

overall factor analysis except for Idea cellular. In Idea cellular there were two more

factors such as Query resolved by customer care and waiting time for having connected

with representative are included in component 3. So, for Idea cellular these two factors

are also affecting satisfaction of the consumers, otherwise it is same as it is for other

companies.

ExtractedComponents

New NameComponent Extracted Factors

FactorLoadings

Value

Customized VASs

Component

1

GPRS/Internet 0.876

Caller tunes 0.829

Various alerts 0.764

Customization 0.775

ConvenienceComponent

2



0.894


Network Coverage

Component 3


Call Tariff Component

4

Call rates 0.772



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6.9 Hypothesis Testing with Regression: (Before factor analysis)

The variables taken for this analysis are the variables which were initially

considered for the study.

6.9.1 Regression for Consumer Loyalty towards MSP as dependent variable

and Satisfaction with Basic Services, Satisfaction with VASs, Satisfaction

with Convenience, Satisfaction with Other Services as an independent

variables.

Regression output from Excel

Regression Statistics

Multiple R 0.778278

R Square 0.605717

Adjusted RSquare

0.599483

Standard Error 0.857958

Observations 258

ANOVA

df SS MS F

Regression 4 286.0978 71.52445 97.16783

Residual 253 186.2312 0.736092

Total 257 472.329

Coefficients Standard

Error t Stat P-value

Intercept -2.69182 0.326659 -8.24047 9.31E-15


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AVG-BS 0.569968 0.088054 6.47292 4.96E-10

AVG-VA 0.55109 0.079437 6.937464 3.33E-11

AVG-CO 0.47892 0.076147 6.289393 1.39E-09

AVG-OS -0.00159 0.074823 -0.0212 0.983099

6.9.1.1 Prediction Equation:

The prediction equation is LO = -2.6918 + 0.5699 (BS) + 0.5510 (VA) + 0.4789 (CO) -

0.0015 (OS)

Where, LO=Consumer Loyalty towards MSP

BS=Satisfaction with Basic services

VA= Satisfaction with VASs

CO= Satisfaction with Convenience

OS= Satisfaction with Other Services

telling you that LO is predicted to increase 0.5699 when the BS factor goes up by one,

increase by 0.5510 when VA goes up by one, increase by 0.4789 when CO up by one,

decrease by 0.0015 when OS goes up by one, and is predicted to be 0.43 which is

equivalent to zero (0) when all factors rated as minimum that is 1 and also predicted to be

5.29 which is equivalent to five (5) when all factors rated as maximum that is 5. So, it

shows that consumers loyalty towards MSP increases when consumers satisfaction level

is high with all of above factors except OS and consumers loyalty towards MSP

decreases when consumers sat isfaction level is low with all of above factors.

6.9.1.2 Coefficient of determination (R 2):


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The R-squared of the regression is the fraction of the variation in your dependent

variable that is accounted for (or predicted by) your independent variables. For this

regression equation R-squared is 0.6057 so, 60.57% of variance in dependent variable

can be explained by four independent variables.

6.9.1.3 Significance Value for Hypothesis Testing (P):

Now P values for the each independent variable is there in the regression table and if it is

found to be less than 0.05 for each independent variable than the variable has significant

relationship with the dependent variable. From the regression analysis it is found that BS

(Satisfaction with Basic Services), VA (Satisfaction with VASs) and CO (Satisfaction

with Convenience) have P value less than 0.05 so that all these three variables are

significantly related to LO (Consumer Loyalty towards MSP). OS (Satisfaction with

Other Services) has P value greater than 0.05 so, it has no significant relation with LO

(Consumer Loyalty towards MSP).


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6.9.2 Regression for Consumers Foster Recommendation of MSP to others as

dependent variable and Satisfaction with Basic Services, Satisfaction with VASs,

Satisfaction with Convenience, Satisfaction with Other Services as an independent

variables.



Multiple R 0.812284

R Square 0.659806

Adjusted RSquare

0.654427


Observations 258

ANOVA

df SS MS F

Regression 4 286.5412 71.6353 122.6731

Residual 253 147.74 0.583953

Total 257 434.2812

Coefficients Standard Error

t Stat P-value

Intercept -2.74988 0.290949 -9.45142 2.37E-18

BS 0.672167 0.078428 8.570469 1.03E-15

VA 0.559605 0.070753 7.909287 8.06E-14

CO 0.498385 0.067823 7.348315 2.77E-12


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OS -0.11289 0.066643 -1.69396 0.091504


The prediction equation is RE = -2.7498 + 0.6721 (BS) + 0.5596 (VA) + 0.4983 (CO) -

0.1128 (OS)

Where, RE=Consumers Foster Recommendation of MSP to others

BS=Satisfaction with Basic services

VA= Satisfaction with VASs


OS= Satisfaction with Other Services

telling you that RE is predicted to increase 0.6721 when the BS factor goes up by one,

increase by 0.5596 when VA goes up by one, increase by 0.4983 when CO up by one,

decrease by 0.1128 when OS goes up by one, and is predicted to be 0.21 which is

equivalent to zero (0) when all factors rated as minimum that is 1 and also predicted to be


shows that Consumers Foster Recommendation of MSP to others increases when

consumers satisfaction level is high with all of above factors except OS and Consumers

Foster Recommendation of MSP to others decreases when consumers s atisfaction level

is low with all of above factors.





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Now P values for the each independent variable is there in the regression table

and if it is found to be less than 0.05 for each independent variable than the variable has

significant relationship with the dependent variable. From the regression analysis it is

found that BS (Satisfaction with Basic Services), VA (Satisfaction with VASs) and CO

(Satisfaction with Convenience) have P value less than 0.05 so that all these three

variables are significantly related to RE (Consumers Foster Recommendation of MSP to

others). OS (Satisfaction with Other Services) has P value greater than 0.05 so, it has no

significant relation with RE (Consumers Foster Recommendation of MSP to others ).


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6.10 Hypothesis Testing with Regression: (After factor analysis)

Here the variables are taken after the factor analysis. It means that new four

factors extracted from factor analysis are taken for this regression analysis.

6.10.1 Regression for Consumer Loyalty towards MSP as dependent variable

and Satisfaction with Network Coverage, Satisfaction with Call Tariff,

Satisfaction with Customized VASs, Satisfaction with Convenience as an

independent variables.



Multiple R 0.793241

R Square 0.629231

Adjusted R Square 0.623369


Observations 258

ANOVA

df SS MS F

Regression 4 297.204 74.30101 107.3414

Residual 253 175.125 0.692194

Total 257 472.329

CoefficientsStandard


Intercept -2.26292 0.309242 -7.31763 3.34E-12

NC 0.326873 0.053634 6.094556 4.07E-09


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significant relationship with the dependent variable. From the regression analysis it is

found that NC (Satisfaction with Network Coverage), CT (Satisfaction with Call Tariff),

CV (Satisfaction with Customized VASs) and CO (Satisfaction with Convenience) have

P value less than 0.05 so that all these four variables are significantly related to LO

(Consumer Loyalty towards MSP).


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6.10.2 Regression for Consumers Foster Recommendation of MSP to others as

dependent variable and Satisfaction with Network Coverage, Satisfaction

with Call Tariff, Satisfaction with Customized VASs, Satisfaction with

Convenience as an independent variables.



Multiple R 0.813554

R Square 0.661871

Adjusted RSquare 0.656525


Observations 258

ANOVA

df SS MS F

Regression 4 287.438 71.85951 123.8086

Residual 253 146.8432 0.580408

Total 257 434.2812

Coefficients

Standard


Intercept -2.35395 0.283172 -8.31279 5.78E-15

AVG-BS-1 0.213621 0.049112 4.349634 1.98E-05

AVG-CT 0.389817 0.063669 6.12254 3.49E-09

AVG-CVAS 0.460757 0.058971 7.813345 1.49E-13

AVG-CO 0.480304 0.064268 7.473439 1.27E-12


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The prediction equation is LO = -2.354 + 0.214 (NC) + 0.390 (CT) + 0.461 (CV) + 0.480

(CO)

Where, RE=Consumers Foster Recommendation of MSP to others

NC=Satisfaction with Network Coverage

CT= Satisfaction with Call Tariff

CV= Satisfaction with Customized VASs


telling you that RE is predicted to increase 0.214 when the NC factor goes up by one,

increase by 0.390 when CT goes up by one, increase by 0.461 when CV up by one,

increase by 0.480 when CO goes up by one, and is predicted to be 0.80 which is

equivalent to one (1) when all factors rated as minimum that is 1 and also predicted to be


shows that Consumers Foster Recommendation of MSP to others increases when

consumers satisfaction level is high with four of above factors and Consumers Foster

Reco mmendation of MSP to others decreases when consumers satisfaction level is low

with four of above factors.




regression equation our R-squared is 0.6618 so, 66.18% of variance in dependent variable



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significant relationship with the dependent variable. From the regression analysis it isfound that NC (Satisfaction with Network Coverage), CT (Satisfaction with Call Tariff),

CV (Satisfaction with Customized VASs) and CO (Satisfaction with Convenience) have

P value less than 0.05 so that all these four variables are significantly related to RE

(Consumers Foster Recommendation of MSP to others ).


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7. RESEARCH & FINDINGS:

Customers loyalty depends on Basic Services, Value Added Services and

Convenience provided by the MSPs.

Foster recommendation (positive word of mouth) by customers depends on Basic

Services, Value Added Services and Convenience provided by the MSPs.

Customers loyalty and foster recommendation (positive word of mouth) are

depending on mainly four factors, i.e. Customized Value Added Services,

Convenience, Network Coverage and Call Tariff.

Mostly BSNL and Reliance users are using another MSP s services along with

their main MSP.

Mostly Vodafone, Airtel and Idea users are using only one MSP s services.

Mostly Vodafone, Airtel and Idea users are satisfied with the service provided by

their respective MSPs.

Most of BSNL users are not satisfied with Network Coverage, VASs and

Customer care services.

Most of Reliance Mobile users are not satisfied with Network Coverage, Roaming

Facilities and Customer care services.

Custo mers satisfaction with Call Rates is significantly related with Family

Income of Users.

Customers satisfaction with Availability of Customer Store is significantly

related with Age of users.

Type of service opted by users is significantly related with occupation of users.

More number of users is using Pre-paid service than Post-paid service.


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8. CONCLUSION:

We have studied the Indian telecom industry by concentrating on mobile service

providers, and observed that there is high competition among the players in the industry.

All the players are giving special offers and schemes as per the market conditions to

maximize their subscriber base. Competition in telecom industry is heating up, now it s

time for Indian telecom players to align up in the new dynamic business environment.

Telco majors should think to launch the product according to the needs of customers to

satisfy them and make them brand loyal as very soon this blue ocean of Indian telecom

scenario will convert into Red Ocean where the loss of one is the gain of other.

According to the results, the most important determinant for consumers satisfaction a ndtheir foster recommendation (positive word of mouth) to others are Customized VASs,

Convenience, Network Coverage and Call tariff.


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9. BIBLIOGRAPHY:

9.1 References:

Debnath, Roma Mitra, Benchmarking telecommunication service in India, 2008

(http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=236E2B

6B45CF101465D540FD4401AEB9?contentType=Article&hdAction=lnkhtml&co

ntentId=1742535&history=true>) [Viewed 2/3/10]

Fernandez, Fronnie, Understanding Dynamics in an Evolving Industry: Case of

Mobile VAS in India, 2007

(http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=2086527

F0757A565F9A6CBAC8800F658?contentType=Article&hdAction=lnkhtml&co


Kumar, Kaliyamoorthy, Influence of Demographic Variables on Marketing

Strategies in the Competitive Scenario, 2007


F0757A565F9A6CBAC8800F658?contentType=Article&hdAction=lnkhtml&co


Seth et, Etal, Managing the Customer Perceived Service Quality for Cellular

Mobile Telephone: an Empirical Investigation, 2008


F0757A565F9A6CBAC8800F658?contentType=Book&hdAction=lnkhtml&cont

entId=1758667&history=true>) [Viewed 3/3/10]

Documents

Brand Loyalty and Satisfaction for Telecom Players in India