Purpose – With increasing competition in the telecom sector, it is important to know what factors lead to customers switching to other service providers. To study this, customer perceived price and perceived service quality and customer satisfaction should be measured and the switching costs which act as barrier for the customers to shift to other service providers have to be identified. The effect of recently introduced mobile number portability on the reduction in barrier of switching cost has to be studied.
This paper’s aim is to measure the mediating effect of Customer satisfaction of customer’s willingness to switch service provider and the indirect effect of Perceived price and Perceived Service Quality on willingness to switch. Further, the moderating effect of switching cost on the relationship between customer satisfaction and willingness to switch will be studied. Design/methodology/approach – The data set covered 155 mobile phone users- resident students of Indian B-schools. The data was analyzed by regression analysis to test the hypotheses.
Findings – The findings of this study show that the switching cost does not have a moderator effect on relationship between customer satisfaction and willingness to switch service provider. Further, perceived price and Perceived Service quality have an indirect effect on willingness to switch and customer satisfaction has a mediating effect on willingness to switch. Research limitations/implications – The data set on which the research is conducted was 155, which is a small sample size compared to the number of mobile users in India. Also the data set is limited largely to the age group of 20-35 years.
Practical implications – The research findings show that the switching costs have become insignificant after the advent of mobile number portability and if customer satisfaction is not maintained then there is a high chance of customers switching to other service providers. Hence, Service providers have to focus their efforts towards customer satisfaction the customers. Originality/value – Although a lot of research has been done in the Indian mobile market, however this research was done before the introduction of mobile number portability.
Hence, this research adds value in terms of analyzing the effect of MNP on customer’s willingness to switch the service provider. Further, such research was conducted in other countries where the MNP was introduced much earlier. The same has however not been done in the Indian context. Hence the research gives new insights in the Indian market. Keywords – Customer satisfaction, Willingness to Switch service provider, switching costs, Perceived Price, Perceived Service Quality.
Mobile Number Portability (MNP) is a facility that allows the mobile users to change their Service provider while retaining their phone number. The retention of the same number will enable some business customers to maintain their contacts and flow of business. Also there is a possibility of reduction in prices due to increased competition. Many studies have shown that change of mobile number when the service provider is changed is a major barrier and acts as a switching cost for changing service provider.
With the advent of Mobile number portability, it is important to study what factors majorly result in the intention to switch the service provider by the customer. By removing the barrier of change in number, will the consumers be more inclined to switch service providers or do the switching barriers still remain high remains to be studied. Similar study was conducted in Korean context and was found that the customers perceive higher switching barriers even after the introduction of mobile number portability.
This study will be conducted in Indian context to analyze the effect of Customer satisfaction, switching costs on the customer’s intention to switch in the context of mobile number portability. Mobile number portability in the US and Korean markets: Other Studies In the US, MNP was introduced nationwide in May 2004. It was observed that the number of customers who changed their service providers was far less than expected in the first year of introduction of MNP.
It was inferred that this was due to the positive impact that MNP had on subscribers in terms of increased retention strategies. It could be said that the switching barriers were not completely removed with the advent of MNP. MNP was introduced in Korea in January 2004. It was observed that there was no significant movement in the number of subscribers after the introduction of MNP, same as in the US. The reasons found were that Service providers developed customer lock-in strategies thus retaining the customers and reducing the effect of MNP.