10th Operations Research Society Of Eastern Africa (ORSEA) Conference
2014- Nairobi, KENYA
J. R.M. Philemon and M. E.S. Mngulwi
10th ORSEA CONFERENCE 2014
Factors Influencing Customer Switching Behavior among
Mobile Phone Service Providers: Case of University Students
UNIVERSITY OF DAR-ES-SALAAM BUSINESS SCHOOL
1
• Introduction
• Problem statement
• Model of customer switching behavior
• Methodology
• Findings
• Conclusions
• Recommendations
10th ORSEA CONFERENCE 2014
OUTLINE
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In 2012, the global mobile market grew strongly to nearly 7 billion
connections, representing a growth rate of 13.7% p.a. since 2008.
2013 was a landmark year, with for the first time more SIMs active than
the world population.
Market for the mobile telecommunications is expected to grow over the
years, with annual growth rate of 7.6% expected between 2012 and 2017.
This increasing popularity of mobile technologies has led to the dramatic
use of mobile phones among college students. WHY?
Communications and access to academic resources on their mobile
devices (Hung & Zhang, 2011).
Mobile phones open up new avenues for extending the scope, scale and
quality of education (Mishra, 2011).
This view is premised on the decline in the price of mobile handsets and
usage costs, which makes mobile phones increasingly ubiquitous,
especially in poorer communities (Taxler, 2009).
10th ORSEA CONFERENCE 2014
Introduction
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Africa has been a key source of mobile industry growth and
the growth is set to continue.
Tanzania telecommunication industry has also witnessed a
dramatic growth and the rapid expansion of mobile phone
usage in Tanzania has been triggered by a highly competitive
market and service diversification. The competitive
environment has resulted into customers switching between
mobile service providers.
Operators(VODACOM, AIRTEL, ZANTEL, SASATEL,
SMART, TIGO) are now providing different mobile phone
services such as voice and message transmission, data services,
paging as well as internet services (Hassan and Semkwiji,
2011).
10th ORSEA CONFERENCE 2014
Introduction (cont’d)
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Some researchers postulate that consumers’
switching behavior poses a serious threat to longterm relationships (Ganesh & Reynolds, 2000).
Despite the fact that many studies have been done
on the factors influencing customer switching , very
few studies have been done in developing countries
such as Tanzania and more specifically on
university students. The objective of this study was
to determine the causes of students switching
behavior among mobile phone service providers.
10th ORSEA CONFERENCE 2014
Problem Statement
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Model of Customer Switching Behavior
KEAVENEY
Service Failure (Service Mistakes,
Billing Errors, Service Catastrophe
Service
Encounter
Failure
(Uncaring, Impolite, Unresponsive,
Unknowledgeable)
Customer Switching
Response Failure (Negative
Response, No Response, Reluctant
Behaviour
Response
Competition (Found Better
Service)
ETHICAL factors (Cheating, Hard
Selling, Unsafe, Conflict Of
Interest
10th ORSEA CONFERENCE 2014
Rates (High Pricing, Price
Increases, Unfair Pricing, Deceptive
Pricing)
Involuntary Switching (Customer
Moved, Provider Moved
Figure1: Model of Customer Switching Behavior
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Population: Students of the University of Dar-essalaam (17,000 students) and Tumaini University
(Dar-es-salaam College)-2,100
Why Students?: University students constitute a
large and growing market for the mobile phone
services.
Data collection: 4 point Likert scale questionnaire
Sample Size: Krejcie and Morgan (1970) 384
students.
Analysis: Descriptive (Frequencies, Percentages,
Means and Standard Deviations); t-test
Reliability: Cronbach's alpha: Variables showed
acceptable values (above 0.7).
10th ORSEA CONFERENCE 2014
Methodology
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Categories
University
Tumaini University
University of Dar es Salaam
Program
Undergraduate
Postgraduate
Course of specialization
Business
Law
Engineering
Education
Others
Gender
Male
Female
Age of respondents
Below 20
21-30
31-40
41-50
51 and above
Av. monthly income (Tanzania shillings )
Below 100,000
100,001-300,000
300,001-500,000
500,001-1,000,000
1,000,000 and above
Residence
Temeke
Ilala
Kinondoni
Frequency(n)
Percent (%)
61
109
35.9
64.1
120
49
70.6
28.8
74
22
18
32
24
43.5
12.9
10.6
18.8
14.1
113
57
66.5
33.5
5
136
22
6
1
2.9
80.0
12.9
3.5
.6
60
64
19
16
11
35.3
37.6
11.2
9.4
6.5
28
28
114
16.5
16.5
67.1
10th ORSEA CONFERENCE 2014
Profile of the Respondents
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Mobile phone service providers
TIGO
VODACOM
TRITEL
AIRTEL
Total
Frequency (n)
65
80
2
23
170
Percent (%)
38.2
47.1
1.2
13.5
100.0
10th ORSEA CONFERENCE 2014
First Mobile Phone Subscription
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Factors Influencing Switching Behavior
N
Mean
Std. Deviation
Std. Error Mean
COMPETIT
169
2.6154
1.31385
.10107
RATE
169
2.3333
.94631
.07279
SERVICEF
169
2.2643
.97174
.07475
RESPFAIL
169
2.2032
.96507
.07424
ENCOFAIL
169
1.9201
.99977
.07691
INVOLUNT
169
1.8491
1.18874
.09144
10th ORSEA CONFERENCE 2014
(Descriptive Results)
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ETHICAL
169
1.7618
.88465
.06805
T-Test: Factors Influencing Switching Behavior-1
Test Value =2.5
df
Sig. (2tailed)
Mean Difference
95% Confidence Interval of the
Difference
Lower
Upper
RATE
-2.290
168
.023
-.1667
-.3104
-.0230
SERVICEF
-3.153
168
.002
-.2357
-.3833
-.0881
ENCOFAIL
-7.540
168
.000
-.5799
-.7317
-.4281
RESPFAIL
-3.999
168
.000
-.2968
-.4434
-.1503
COMPETIT
1.142
168
.255
.1154
-.0841
.3149
ETHICAL
-10.847
168
.000
-.7382
-.8725
-.6038
INVOLUNT
-7.118
168
.000
-.6509
-.8314
-.4704
10th ORSEA CONFERENCE 2014
t
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The seven main factors were further analyzed using
t-tests to determine their influence on university
students switching behaviors. In assessing the
factors a one sample t-test was performed. The
value of 2.5 served in demarcating agreement with
the statements (above 2.5) and those disagreeing
with the statements (below 2.5). The t-values are
presented on Table 3. All the factors with the
exception of competition [COMPETIT] have
negative t-values and are significant at either 0.05 or
0.01.
10th ORSEA CONFERENCE 2014
T-Test: Factors Influencing Switching Behavior-2
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Recommendations -1
Offer services at relatively cheaper rates so as to woo
university students to their side.
Establish effective service recovery strategies in case of
inevitable failure. Studies have shown that resolving customer
problems effectively has a strong impact on customer loyalty.
To innovatively be ahead of competition at any point in time.
10th ORSEA CONFERENCE 2014
Avoid service failures.
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Recommendations-2
Invest many resources in maintaining current subscribers
Keeping track of the reasons for university students
switching of service providers as the reasons may not be
static but dynamic.
10th ORSEA CONFERENCE 2014
while attracting new ones.
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10th ORSEA CONFERENCE 2014
THANK YOU VERY MUCH
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