Factors influencing customer switching decision among mobile service providers; a case of South C residents, Nairobi County, Kenya

Abstract

The study aimed at investigating and analyzing factors that influence customer switching decisions in the telecommunication industry. The study was prompted by the realization that, after the launch of mobile number porting facility, subscribers were not switching service providers in large numbers as was expected, meaning there could be other factors that could explain the stickiness with an operator. This study therefore, sought to investigate these underlying factors (grouped into demographics, customer satisfaction and switching cost) that influence the subscribers switching decision, leading to specific questions. Do demographic differences influence subscribers switching decisions? How does customer satisfaction influence subscriber's decision to use Mobile Number Portability? To what extent does switching cost influence subscriber's decision to switch service providers based on the availability of Mobile Number Portability?

Primary data, in which a sample of329 randomly selected respondents, was used in this analysis. Descriptive, cross-tabulation, correlation and regression techniques were followed in analysis which indicated that demographic factors, customer satisfaction and switching cost were actually important determinants of switching behavior. But beyond cost were hidden aspects specific to mobile operators such as the value added services they offer, whether the services were availably close to the people and security of the specific network. The study suggests that regulators focus on policy environment to cut set-up and call termination fee since this would mean subscribers have no fear of paying too much money when calling across networks. Such a policy would level the playing field for all operators. On the other hand operators who wish to encourage switchers to their network can enhance customer experience by lowering service costs (especially Safaricom on M-pesa service), increasing agency network (all other operators particularly Airtel since it would be the biggest gainer), building security (Airtel), improving network strength (Orange) and strengthening internet data network signals (Essar). This suggestion is based on the niche that each operator has cut in the market.