research study of brand loyalty and satisfaction for telecom players in india

APROJECT REPORT

ON

“STUDY OF CUSTOMER SATISFACTION INFLUENCING

BRAND LOYALTY AND FOSTER RECOMMENDATION

FOR MOBILE SERVICE PROVIDERS”

SUBMITTED TOINDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I2IM)

Guided byMr. Govind B Dave

SUBMITTED BY:Binit Patel (08/MBA/31)

Maunesh Patel (08/MBA/37)

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I²IM)EDUCATION CAMPUS- CHANGA

AT & PO CHANGA- 388421: TA- PETLAD, DIST- ANAND, GUJARAT, INDIA.APRIL 2010

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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’, governments 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.

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. In

uneconomic 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.

- India‘s 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 Pacific 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

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

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 is

dominated 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 service

d) 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

Stocks

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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

Microsoft Outlook

R-world

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3-way call conferencing

[B] Fixed line services

Fixed line service providers provides following services. These services may vary from

operator to operator. Following are the most services provided by them.

1. Change no announcement

2. Public grievance sale

3. STD code information

4. International calls

5. Password protected STD/ISD facilities

6. Wake up call services

7. Call transfer services

8. Call waiting services

9. Hotline services

10. CLIR

11. Internet services

12. Voice mail services

[C] Internet Service Provider

There are various types of products are coming under internet services. Some are purely

related to internet surfing by individual while some are purely corporate products.

Dial up

Broadband

Bandwidth & corporate solutions

- Wi-Fi hot spots

- Virtual private network

- Server co-location

Enterprise business solution

PC to phone telephoning

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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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2. MOBILE SERVICE PROVIDERS

The total number of mobile (GSM and CDMA) subscribers has reached 391.76

million at the end of March 2009 as compared to 261.07 million in March 2008. The

overall tele-density has increased to 50.06% in March 2009 as compared to March 2008.

Subscriber Base of Mobile (GSM and CDMA) Services fromMarch, 2005 to March, 2009 (in millions)

Service Providers FY-2005 FY-2006 FY-2007 FY-2008 FY-2009

% growth over FY-

2008Bharti 10.98 19.58 37.14 61.98 93.92 51.53%BSNL 9.9 17.65 30.99 40.79 52.15 58.70%

Reliance 10.45 17.31 28.01 45.79 72.67 55.84%Vodafone 7.8 15.36 26.44 44.13 68.77 27.85%

Tata 1.09 4.85 16.02 24.33 35.12 44.35%Idea 5.07 7.37 14.01 24.00 38.89 62.03%

Aircel 1.76 2.61 5.51 10.61 18.48 74.18%MTNL 1.08 2.05 2.94 3.53 4.48 26.91%Spice 1.44 1.93 2.73 4.21 4.13 -1.90%BPL 2.58 1.34 1.07 1.29 2.16 67.44%

HFCL 0.05 0.06 0.15 0.30 0.60 30.00%Sistema 0.03 0.03 0.10 0.11 0.39 445.45%Total 52.23 90.14 165.11 261.07 391.76 50.06%

Source: TRAI Annual report 2008-2009

Above table shows number of subscriber each company has and its growth over financial

year 2008. Table shows that Sistema has highest growth rate of (445.45%) and Spice has

lowest growth rate of (-1.90%). Airtel is the market leader in India right now followed by

Reliance mobile. Vodafone is at 3rd position followed by BSNL and Idea. Other

companies fight well to get more number of subscribers with giants like Airtel, Reliance

mobile, BSNL, Idea and Tata.

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In Gujarat, currently 6 operators are operating. Gujarat is categorized in A-circle. The 6

companies are listed as below.

BHARTI-AIRTEL

BSNL

VODAFONE-ESSAR

IDEA CELLULAR

RELIANCE

TATA TELE

Now, following tables shows corporate structure, financial and operational performance, company strategy, products and services offered by each company.

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BHARTI CELLULAR

LTD.

Corporate structure

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 and operational

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%.

Company strategy

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 and services

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%.

Company strategy

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

Corporate structure

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%.

Company strategy

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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IDEA CELLULAR

Corporate structure

Idea cellular is owned by AT&T group


performance

Idea cellular had 38.89 mn subscribers with growth rate of

62.03%.

Company strategy

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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RELIANCE COMMUNICATIO

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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 service

market.

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 Porter’s five force model:

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Barriers to entry

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

Bargaining power of customer

Customers’ loyalties are harder to retain

Switching costs are lower because of no. of player in market

Easy availability of products & services

Rivalry among competitors

high competition in major player in telecom industry

high competition due to private sector and public sector operators

CDMA providers pushing hard

Low margin based intense competition

Bargaining power of supplier

Limited no of players in equipment market

Network and technology providers are limited In numbers

A new technological service provided by firms depends on supplier

Threats of substitutes

Mobile subscribers use e-mail, fixed line, CDMA and vice-versa

Technological development making substitute more accessible

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 mobile 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 and data applications. In

addition, 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 are 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 cheap

as 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

say that right now the threat is moderates from this substitute but it will

be high in future.

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Online call through internet:

The online calls, which are made by using internet, can be considered as a

substitute of the telecom services. The calls are received through internet

and then distributed on the local network. The uses of such facilities are

actually illegal but still their use is increasing in metro cities. So it is

becoming a threat for the telecom services.

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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 a

manufacturing 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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3.2 Problem Areas:

Customer retention

Gaining new customers

Customers’ loyalty

Low profit margins

Government regulation

Rate of technology obsolescent

3.3 Problem Statement:

Consumer switching behavior across mobile service providers: Companies’ prime

focus is to create loyal customers and retaining current customer & get benefitted from

them. Customers are switching to other MSP because they are not satisfied. Consumers

are not satisfied on account of marketing mix elements.

3.4 Objectives of study

This project consists of different objectives. They are as follows:

To find out the consumers’ satisfaction towards the various services provided

by mobile service providers.

To find out the relationship between consumers’ loyalty, consumers’ foster

recommendation and consumers’ satisfaction with various services provided

by the MSPs.

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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 retaining

existing 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.

29

Seth et al (2008), in their study titled “Managing the Customer Perceived Service Quality

for Cellular Mobile Telephone: an Empirical Investigation” analyzed that there is relative

importance of service quality attributes and showed that responsiveness is the most

importance dimension followed by reliability, customer perceived network quality,

assurance, convenience, empathy and tangibles. This would enable the service providers

to focus their resources in the areas of importance. The research resulted in the

development of a reliable and valid instrument for assessing customer perceived service

quality for cellular mobile services.

Fernandez (2007) in their study titled “Understanding Dynamics in an Evolving Industry:

Case of Mobile VAS in India” analyzed that Mobile Value Added Services (VAS) is a

rising star in the fast growing wireless business. In the paper, attempt is made at

understanding the strategic dynamics of the evolving environment within which the

Indian players are operating, the challenges and structure of the same. Our literature and

industry review indicates that - while the value chain of industry is complicated yet one

can observe the bipolar nature of bargaining powers between mobile network operators

and content aggregators.

Kalpana and Chinnadurai (2006) in their study titled “Promotional Strategies of Cellular

Services: A Customer Perspective” analyzed that the increasing competition and

changing taste and preferences of the customer’s all over the world are forcing companies

to change their targeting strategies. The study revealed the customer attitude and their

satisfaction towards the cellular services in Coimbatore city. It was found that

advertisement play a dominant role in influencing the customers but most of the

customers are of opinion that promotional strategies of cellular companies are more sale

oriented rather than customer oriented.

30

5. RESEARCH METHODOLOGY

5.1 Research model

31

Consumer Loyalty

Satisfaction with Basic Services:

- N/W coverage- Call rates- Roaming Facilities

Satisfaction with VASs:

- SMSs- GPRS/Internet- Caller tunes- Various alerts

Satisfaction with Convenience:

- Availability of Customers Store- Availability of Recharge Points/Bill

Payment Options (Post-paid)- Types of recharge vouchers/Plans Post-

paid)

Satisfaction with Other Services:

- Customization- Query Resolved by Customer Care- Waiting time for having connected with

representative

Dependent Variables

Independent Variables

Consumer Foster Recommendation

5.2 Hypotheses:

H1: Consumer Loyalty towards MSP is significantly related to Satisfaction with Basic

Services.

H2: Consumer Loyalty towards MSP is significantly related to Satisfaction with

VASs.

H3: Consumer Loyalty towards MSP is significantly related to Satisfaction with

Convenience.

H4: Consumer Loyalty towards MSP is significantly related to Satisfaction with Other

services.

H5: Consumers’ foster recommendation is significantly related to Satisfaction with

Basic services.


VASs.


Convenience.


Other services.

32

5.3 Research Design

5.3.1 Sample Size:

A sample of 258 respondents was taken on the basis of convenience.

5.3.2 Research Period:

Research work is only carried for 2 or 3 weeks.

5.3.3 Research Instrument:

This work is carried out through self-administered questionnaires. The

questions included were of likert scale.

5.3.4 Data Collection:

Primary Source: The data was collected directly from respondents with

the help of structured questionnaires.

Secondary Source: The secondary data was collected from internet and

references from Library.

5.3.5 Data Analysis:

The data is analyzed on the basis of suitable tables by using mathematical

techniques. The technique used is bar graphs. The data is also analyzed by

statistic software such as SPSS and Microsoft Excel etc.

33

6. DATA ANALYSIS

6.1 Analysis of Demographic Variables:

1) Gender:

Male Female0

50

100

150

200

Male (72.86%)

Female (27.14%)

Gender

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

2) Occupation:

STUDENT EMPLOYEE BUSINESS RETIRED OTHER0

20

40

60

80

100

120

140

STUDENT (51.55%)

EMPLOYEE (23.25%)

BUSINESS (22%)

RETIRED (1%) OTHER (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.

34

3) Type of Service User:

PRE-PAID POST-PAID0

50

100

150

200

250

PRE-PAID (81.4%)

POST-PAID (18.6%)

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:

Below 20 20-30 30-40 40-50 Above 500

20406080

100120140160180

Below 20 (10%)

20-30 (69%)

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

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.

35

5) Multiple Users:

Consumers using more than 1 MSPs' services

Consumers using only 1 MSPs' services

020406080

100120140160180

Consumers using more than 1

MSPs' services (37%)

Consumers using only 1 MSPs'

services (63%)

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:

<100k 100K-200K 200K-300K 300K-400K >400K0

10

20

30

40

50

60

70

80

<100k (13%)

100K-200K (20%)

200K-300K (28%)

300K-400K (18%) >400K (21%)

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.

36

6.2 Mean Interpretation:

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 with representative

3.46

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 are

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

them for their satisfaction.

37

6.3 Companywise mean tables:

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

1) AIRTEL:




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

important to them for their satisfaction.

38

2) VODAFONE:

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




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.

39

3) IDEA:

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




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.

40

4) BSNL:

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




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.

41

5) RELIANCE MOBILE:

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




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.

42

6.4 Chi-Square Tests:

Hypothesis 1:

Ho: Consumers’ satisfaction with Call rates of MSPs is not

significantly related to Income of consumers

H1: 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.

43

Hypothesis 2:

Ho: Consumers’ satisfaction with Availability of Customer stores is

not significantly related to Age of consumers

H1: 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


Pearson Chi-Square 27.947a 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 rejected

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

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

44

Hypothesis 3:

Ho: Consumers’ satisfaction with Caller Tunes services of MSPs is not


H1: Consumers’ satisfaction with Caller Tunes services of MSPs is


Caller Tunes and Age Cross Tabulation

AGE

Caller

tunes

Bel 20 20-30 30-40 40-50 Abo 50 Total

2 2 8 2 0 0 12

3 11 57 9 10 3 90

4 7 59 6 3 5 80

5 5 54 13 0 4 76

Total 25 178 30 13 12 258

Chi-Square Tests




Linear-by-Linear

Association

.051 1 .821


Here, significance value is 0.087 which is greater than 0.05. So, here there is not enough

evidence to reject null hypothesis. So, test shows that Consumers’ satisfaction with Caller

Tunes services of MSPs is not significantly related to Age of consumers.

45

Hypothesis 4:

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

related to Occupation of consumers

H1: 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




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.

46

6.5 ANOVA Tests:

Hypothesis 5:

Ho: Means of Consumers’ satisfaction with Network Coverage of

Vodafone, Airtel and Idea are same (µvoda= µairtel= µidea)

H1: Means of Consumers’ satisfaction with Network Coverage of

Vodafone, Airtel and Idea are not same (µvoda≠ µairtel≠ µidea)

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

(µvoda= µairtel= µidea). 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 (µvoda= µairtel= µidea)

H1: Means of Consumers’ satisfaction with Convenience of Vodafone,

Airtel and Idea are not same (µvoda≠ µairtel≠ µidea)

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

47

Factor analysis: (Overall)

Given the sample size of 258, factor loadings of 0.700 and higher will be

considered significant for interpretative purpose.

Rotated Component Matrix

Component

1 2 3 4

Network coverage .385 .113 .719 .175

Call rates .048 .239 .134 .772

Roaming Facilities .132 .033 .067 .799

SMSs .336 .435 -.590 .336

GPRS/Internet .876 .122 .018 .028

Caller tunes .829 .232 .208 .048

Various alerts .764 .070 .247 .147

Availability of customer stores .157 .747 .398 .041


.183 .894 .043 .153

Types of recharge vouchers/Plans .200 .881 -.018 .173

Customization .775 .267 .075 .185

Query resolved by customer care .262 .382 .537 .355


.365 .386 .584 .365

In above table, the factors which have value more than 0.700 are selected from each component. Now, below is the simplified rotated component matrix.

48

Rotated Component Matrix1

Component

1 2 3 4

Network coverage .719

Call rates .772

Roaming Facilities .799

SMSs

GPRS/Internet .876

Caller tunes .829

Various alerts .764

Availability of customer stores .747


.894

Types of recharge vouchers/Plans .881

Customization .775

Query resolved by customer care


1Loadings less than 0.700 are not shown.

Now, table below shows the new names for extracted components.

49

Extracted Component’s

New NameComponent Extracted Factors

Factor Loadings

Value

Customized VASsComponent –

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 TariffComponent –

4Call rates 0.772


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

50

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

companies.

51

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 R Square

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

AVG-BS 0.569968 0.088054 6.47292 4.96E-10

52

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’ satisfaction level is low with all of above factors.

6.9.1.2 Coefficient of determination (R2):

53

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).

54

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 R Square

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

OS -0.11289 0.066643 -1.69396 0.091504

55


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’ satisfaction level

is low with all of above factors.




56




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).

57

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

Error t Stat P-value

Intercept -2.26292 0.309242 -7.31763 3.34E-12

NC 0.326873 0.053634 6.094556 4.07E-09

58

CT 0.221538 0.069531 3.186187 0.001623

CV 0.453124 0.064399 7.036146 1.85E-11

CO 0.498228 0.070185 7.09881 1.27E-11


The prediction equation is LO = -2.26292 + 0.32687(NC) + 0.22153(CT) + 0.45312(CV)

+ 0.49822(CO)

Where, LO=Consumer Loyalty towards MSP

NC=Satisfaction with Network Coverage

CT= Satisfaction with Call Tariff

CV= Satisfaction with Customized VASs


telling you that LO is predicted to increase 0.32682 when the NC factor goes up by one,

increase by 0.22153 when CT goes up by one, increase by 0.45312 when CV up by one,

increase by 0.49882 when CO goes up by one, and is predicted to be 1.23 which is

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


shows that consumers’ loyalty towards MSP increases when consumers’ satisfaction level

is high with four of above factors and consumers’ loyalty towards MSP decreases when

consumers’ satisfaction level is low with four of above factors.


59









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).

60

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 R Square 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

CoefficientsStandard

Error t Stat P-value

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

61


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

Recommendation 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


62





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 RE

(Consumers’ Foster Recommendation of MSP to others).

63

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.

Customers’ 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.

64

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 and

their foster recommendation (positive word of mouth) to others are Customized VASs,

Convenience, Network Coverage and Call tariff.

65

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&contentId=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=2086527F0757A565F9A6CBAC8800F658?


[Viewed 2/3/10]

Kumar, Kaliyamoorthy, “Influence of Demographic Variables on Marketing

Strategies in the Competitive Scenario”, 2007




[Viewed 3/3/10]

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

Mobile Telephone: an Empirical Investigation”, 2008



contentType=Book&hdAction=lnkhtml&contentId=1758667&history=true>)

[Viewed 3/3/10]

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9.2 Web-sites searched:

www.trai.gov

www.dot.gov

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http://www.dot.gov/

http://www.trai.gov/

Documents

research study of brand loyalty and satisfaction for telecom players in india