Telecom Industry & Reasons for Switching Operators in the Industry

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Telecom Industry & Reasons for Switching Operators in the Industry (Business Statistics)

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TABLE OF CONTENTS:

Executive Summary…………………………………………………………………………..3 Introduction………………………………………………………………………………………..3 Aim & Objectives of Research…………………………………………………………..4 Scope & Significance of Research……………………………………………………..5 Literature Review………………………………………………………………………………..5 Methodology………………………………………………………………………………….…….5 Questionnaire……………………………………………………………………………………….6 Data Analysis………………………………………………………………………………………..8 Conclusion…………………………………………………………………………………………….20

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EXECUTIVE SUMMARY The research has been conducted in order to examine the factors influencing brand switching in telecommunication industry of India and to access the problems generally faced by the service users and their satisfaction towards the different cell phone service providers. Qualitative and quantitative methods have been used in this research. Literature review includes all important factors that can influence brand switching in telecommunication sector. Primary data for research has been collected through a questionnaire survey from a sample of 42 mobile subscribers. The results of research have been presented in systematic manner. The findings have been discussed descriptively and graphically. INTRODUCTION Telecom industry in India has changed drastically over the years. India with a subscriber base of nearly 898 million has the second largest telecom network in the world. There are around 15 telecom companies operating in India. But the telecom space is ruled by 5 major players which include Idea, Airtel, Vodafone, Reliance Communication and BSNL. Due to intense competition, India has the lowest tariffs in the world. The telecom space is divided into 22 circles classified in 4 categories that are metros, A, B & C based on economic parameters and revenue potential. Each circle has a unique license and only four operators per circle are allowed. The Department of telecommunication (Gov. of India) is the governing body for the telecom industry. The Indian Telecom space can be broadly classified into -

Fixed Line Telephony

-

Mobile Telephony

The major players in the Fixed Line telephone include BSNL, MTNL, VSNL and the major players in the mobile telephony include Idea, Vodafone, and Airtel etc.

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Bharti Airtel – It is the biggest telecom operator in India. It was the first in the telecom sector to connect all the states of India. BSNL(Bharat Sanchar Nigam Limited)- It is the oldest telecom sector in India and they are the first telecom operator to connect rural households with their telephone services. Vodafone Essar – It started its operation in India in the year 1994 and has been growing since then. The company has its operations all over India with a customer base of more than a 100 million customers. Reliance Communication- It has more than 135 Million Subscribers. It is the Flagship Company of ADAG group and its headquarters are located in Navi Mumbai. It offers Wired, Wireless, GSM, CDMA, 3G Services in India. Idea- Idea offers both prepaid and post-paid services. Idea was the first service provider to launch GSM and EDGE services in India. Customer is the most important player of market. All the efforts of companies are directed towards customers. Customer can either remain loyal with a particular brand or switch to another one. This particular study evaluates the factors influencing customers to switch telecom operators. AIM & OBJECTIVES OF RESEARCH The aim of the research is as follows: To examine the factors influencing brand switching in the telecom industry.

The aim of the research has been expanded through following objectives: 

To examine the factors that influence brand switching in telecom industry

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

To examine the factors that prevent brand switching in telecom industry



To study the customer preferences of mobile service providers in telecommunication industry of India



To propose recommendations to the mobile service providers for increasing customer loyalty

SCOPE & SIGNIFICANCE OF RESEARCH Telecommunication industry has becoming very competitive day by day and customers are being exposed to a number of choices. This research evaluates the factors that influence customers to switch over other mobile service

providers.

Factors

specific

to

brand

switching

in

telecommunication market are evaluated. LITERATURE REVIEW All industries have experience brand switching but telecommunication industry is more exposed to it. There are many factors that influence brand switching. Price of the services such as calls and has been found most influential factor in brand switching in telecom sector. Besides price there have been many factors that enhance brand switching like quality service, coverage area, trust, advertisement, and brand image. All these factors have been critically analysed in the literature review in the light of work of previous researchers. METHODOLOGY The main objective behind the research is identifying the factors influencing brand switching in telecom industry of India. Here analysis of various factors is done and evaluated using various statistical measures. Research Design: A research design is a basically a study that links the factual and empirical findings of the research to the research question and its objectives and also to the conclusion that is arrived at the end of

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research.

Survey

research

method

is

chosen

for

collecting

the

information for the conducting the quantitative analysis in the same. Population and Sample: Sampling method that is used in the research to collect the data is random sampling technique. In random sampling approach every unit or element from the sample population has equal likely chances to be selected as subject of consideration. Data Collection Procedure: There are two major techniques to collect data, when gathering data to tackle and approach the underlying objectives of the study. Data that is collected from any source which is already been published in some form is known as the secondary data. Secondary Data is that data that already exists; it is gathered with a prior set objective. Primary data is the first hand collection of data that is usually undertaken after some insights are gained in the area of research. In this project report Primary data is collected through a questionnaire. A self-administered questionnaire was used to collect the relevant data. The questionnaire was then posted on social networking sites like Facebook as well as Google Docs. Questionnaire A close ended questionnaire was circulated through Google forms; link and screenshots are attached below. https://docs.google.com/a/associates.sibm.edu/forms/d/1jApJdFRg9X58V bSXPfuYrQ_GwFoGX3-kmZ8mgp_6170/viewform?c=0&w=1

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DATA ANALYSIS Inferential statistical methods used are ANOVA, correlation and regression. Reasons: 

To know that the satisfaction of the particular customer depends on which



factors and knowing which factor plays the most important role To know which how two things are related to each other positively and



negatively To understand how would the dependent variable/s change on changing one of the independent variables and to what extent

Following are the graphical outputs received on surveying 42 mobile customers (questionnaire screen shot attached above):

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The outcomes of the survey through the graphs are selfexplanatory. However, for the reader’s better understanding we would like to explain the outcomes in brief. These results are based on the sample taken which can be extrapolated at population level (here it’s just a simulation not real life outcome as our survey was mostly done with MBA students).

The majority of mobile users are in age group 22 – 25 years with more female users than male users. The daily usage of phone in terms of calls

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& data services are more or less evenly distributed between user using phone for 1-2 hours, 2-3hours, 3-5hours and >5hours (maximum being 3-5 hours). Out of all the surveyed customers 35.7% customer experience call drop & network jam related issues every 3-4 days. Out of all the surveyed customers 60% customers rank better network coverage as number 1 reason which would motivate them to switch to another telecom service provider, 47.1% customers rank 2g/3g data services as number 2 reason which would motivate them to switch to another telecom service provider, 32.4% & 37.5% customers rank better value added services & customer service helpline respectively as number 3 reason which would motivate them to switch to another telecom service provider, 34.4% customers rank customer helpline as number 4 reason which would motivate them to switch to another telecom service provider and finally 35.3% customers rank flexibility of switching plan as number 5 reason which would motivate them to switch to another telecom service provider. Out of all the surveyed customers 48.5% customers rank acceptance of problem by customer care as number 2 on scale for the grievance redressal mechanism of customer service center both online & offline (with 1 being most satisfied & 5 being extremely dissatisfied), 38.2% customers rank listening to your problem by customer care as number 1 on scale for the grievance redressal mechanism of customer service centre both online & offline (‘’), 38.2% customers rank grievance resolution by customer care as number 3 on scale for the grievance redressal mechanism of customer service center both online & offline (‘’) and finally 38.2% customers rank future preventive action by customer care as number 4 on scale for the grievance redressal mechanism of customer service centre both online (‘’). 57.1% of surveyed customers responded that they sometimes face the problem of certain services which are automatically activated and deduct

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balance without your consent. 52.5 % of surveyed customers responded that their telecom service expenditure per month is between Rupees 400 – 700. 57.1% of surveyed customer felt that their telecom service plan was more expensive than the competition in the market. 95.1% of the surveyed customers were aware of the mobile portability availability in India. 58.5% of surveyed customers were somewhat satisfied with their current telecom services provider. 83.3% of surveyed customers would like to try plan of competitor (telecom services), if there is availability of better/competition plan in the market (than the one customer currently has). Attractive internet service pricing and network ranks as number 1 reason for motivating customer to switch to competitor’s telecom services, cheap calling plans rank as number 2 reason for motivating customer to switch to competitor’s telecom services, influence of family & friends rank as number 3 reason for motivating customer to switch to competitor’s telecom services, highly satisfactory customer services rank as number 4 reason for motivating customer to switch to competitor’s telecom services and finally phone network rank as number 5 reason for motivating customer to switch to competitor’s telecom services. Following are the outputs received from SPSS software:

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Descriptive Statistics Mean

Std. Deviation

Analysis N

PhoneNetwork

2.659

1.4935

41

Dataservices2G3G

2.634

1.2601

41

Valueaddedservices

3.488

1.1645

41

Customerservicehelpline

3.341

.9902

41

Flexibilityofswitchingplans

3.683

1.2736

41

Acceptanceofproblem

2.415

.9994

41

Listeningtoyourproblem

2.098

1.0910

41

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Grievanceresolution

3.024

.9871

41

Futurepreventiveactions

3.293

.9809

41

Valueaddedbonusforproblem 3.610

1.3206

41

Ranktheparameterswhichwo 1.659

1.1749

41

2.244

1.0904

41

Attractiveinternetservicespric 2.293

1.4360

41

1.1884

41

1.2610

41

uldmotivateyouforswitchingto an Cheapercallingplans ingampnetwork Influencedbyfriendsampfamil 3.293 ies Highcustomersatisfactoryser 2.902 vices

KMO and Bartlett's Testa Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

Bartlett's Test of Sphericity

.581

Approx. Chi-Square

324.636

df

105

Sig.

.000

a. Based on correlations

Communalities Raw

Rescaled

Initial

Extraction

Initial

Extraction

PhoneNetwork

2.230

2.132

1.000

.956

Dataservices2G3G

1.588

1.072

1.000

.675

Valueaddedservices

1.356

.772

1.000

.569

Customerservicehelpline

.980

.550

1.000

.561

Flexibilityofswitchingplans

1.622

1.521

1.000

.938

Acceptanceofproblem

.999

.832

1.000

.833

Listeningtoyourproblem

1.190

.924

1.000

.776

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Grievanceresolution

.974

.746

1.000

.766

Futurepreventiveactions

.962

.669

1.000

.696

Valueaddedbonusforproblem 1.744

1.466

1.000

.841

Ranktheparameterswhichwo 1.380

1.045

1.000

.757

.734

1.000

.617

1.637

1.000

.794

1.074

1.000

.761

1.345

1.000

.846

uldmotivateyouforswitchingto an Cheapercallingplans

1.189

Attractiveinternetservicespric 2.062 ingampnetwork Influencedbyfriendsampfamil 1.412 ies Highcustomersatisfactoryser 1.590 vices

Extraction Method: Principal Component Analysis.

Component Transformation Matrix Component

1

2

3

4

5

1

.305

.617

.298

-.081

.657

2

.729

-.593

.102

-.297

.135

3

.575

.283

-.435

.575

-.265

4

.030

-.148

.793

.566

-.166

5

.211

.408

.287

-.504

-.673

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

CONCLUSION Based on above outcomes it can be seen that major factors which influence brand/operator switching are bad reception (network), poor customer care service, poor 2g/3g data service, not useful value added services and difficulty in switching plans. Brand/operator switching can be tackled if operators pay more attention to their current customer preferences. Operators should provide proper and steady network and data services in most of the circles where they operate, should provide

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with humble and caring customer care services, should allow or provide options to change plans according to individual needs and should give better value added services which would help customer in his/her life. To increase brand loyalty operators should judiciously utilize the big data analytics based on which they should offer new plans to customers, should give them discounts, should see to it that customer receives proper call & data services where ever they travel within the country and should prevent automatic activation of services & deduction based on those services without customers consent.