Perceptions driving the loyalty intentions of mobile customers of BSNL

Abstract

The ultimate goal of any organization is to earn profit said Eliyahu M Goldratt in hisbook The Goal . This is possible only if the organizations build loyalty in the customers. The loyalty intentions of the customers comprise of the re-patronage intentions and word of mouth (WOM) intentions like recommending and encouraging other prospective customers. This would ensure retention of customers resulting in higher profit and prosperity to the organizations. In this research it is proposed to study the customer s perceptions on loyalty intentions and retention issues in mobile telecommunication industry with 5.6 billion customers in the world, generating around US$900 billion revenue annually and accounting for around 1.5% of the world GDP. In India the telecom sector has contributed significantly to economic growth and accounts for the 3% of India s GDP. India is one of the fastest growing mobile markets in the world. This phenomenal growth has been due to the GSM wireless technology. The main advantages of wireless technology are easy and fast deployment even in the inaccessible areas and tough terrains like mountains etc. (where cables cannot be laid) and less manual intervention in the operation and maintenance of the systems. The liberalization and globalization policy that India took up in the early nineties was another main cause of this growth pattern. Telecommunications which was managed by the Government was thrown open to the private companies. This ushered India into a new era of mobile expansion which gathered such momentum that it was termed as an explosion rather than an expansion. Telephones and Mobiles which were once upon a time a luxury became accessible even to ordinary public. Today India stands high with a mobile Tele-density of 162%in urban, 39.8% in rural and with an overall Tele-density of 76.99%. The opening upof licenses to a large number of service providers led to fierce competition and vi resulted in the churn. Customers started switching operators to avail freebies and to take advantage of low predatory tariff offered by the service providers. Introduction of MNP in 2011 further added fuel to the already existing churn rate. Tariff saw a further dip as operators made their best attempts to retain existing customers and attract new customers. About 29.35 lakhs customers have submitted MNP request in the month of December 2012 and 69.77 Million requests were received till the month of September 2012 as per TRAI report. Telecom operators across the country are in a dilemma to find solutions for this issue as ARPU (average revenue per user) dipped further, followed by the drastic fall in the profit margin of the service providers. And with the New Telecom policy regime, the Government has increased the annual license fee to 8%. Also the Government wants all the service providers to pay a onetime spectrum fee for those having more than 6.2 MHz s. So these could have an impact on the service provider s profits margin and may result in the increase in the tariff as service providers would pass on the burden to the customers. The research proposes to understand the issues from the service provider point of view and seeks to analyse and infer solutions for the retention of customers. The research model proposes to study the customer perceptions on the driving factors Service Quality, Network Quality, trust, Perceived value and Satisfaction and its impact on the Loyalty Intention. The research would help establish a relationship between these driving factors and Loyalty intentions, which would help telecom operators to set priorities and frame strategies to reduce churn and retain the customers. The research would provide insight into the preferences and expectations of the customers. The service providers would then be able to focus on the issues that would delight the customers and ignite their re-purchase intentions, resulting in the higher profit margins. Thus achieve the ultimate goal of making profit.