Towards the Selection of Future 4G Mobile Service Provider from Customers’ Perspective

Aisha Mohsin College of Women

Prince Sultan University Riyadh, Kingdom of Saudi Arabia

amohsin@pscw.psu.edu.sa aishah.mohsin@gmail.com

Dr. Shafiq Ahmad College of Business Administration

Al Yamamah University Riyadh, Kingdom of Saudi Arabia

s_ahmad@yu.edu.sa

Abstract- Mobile communication is clearly one of the most astounding mass consumption phenomena of the last decades, which transversal diffusion has embraced all social classes. This paper focuses on the market dynamics of mobile telecommunications market from consumer’s perspective and we seek to explain the diffusion of technology intensive mobile communications among Saudi culture. We investigate the role of Tri Component Attitude Model and Standard Learning Hierarchy to evaluate the stages a consumer passes through before adopting an innovation. The myriad product and service choices available in mobile communication industry empowers consumers to switch products on the most fleeting of whims. In recent years there have been many articles about the changing face of telecommunications and how they provide consumers with more choices and better quality trends as they rapidly evolve with the changing needs of today's consumers. It has come to our understanding that the role of Tri Component Attitude Model on consumer behavior is largely neglected in telecom market. Another goal of this research is to study the role of Customer Relationship Management (CRM) in Saudi Arabia telecommunication market. This study concentrates on major service providers of mobile and wireless internet services how they are rated by the customers in terms of CRM. It is empirically testified that the quality of customer service significantly effects customer satisfaction and predisposes them positively towards the brand hence increasing their loyalty.

Keywords: 3G/4G, LTE, WiMAX, CRM

I. INTRODUCTION Continuing to invest in 3G networks to accommodate the expected dramatic growth in data traffic is an expensive proposition. Today’s 3G operators have exhausted their network capacity and are faced with the dilemma of either allowing the customer experience to degrade or invest significantly to support the capacity growth or deploy more efficient networks [1]. We are currently witnessing a growing interest of network operators to migrate their existing 2G/3G networks to 4G technologies such as long-term evolution (LTE) to enhance the user experience and service

opportunities in terms of providing multi-megabit bandwidth, more efficient use of radio networks, latency reduction, and improved mobility. Along with this, there is a strong deployment of packet data networks such as those based on IEEE 802.11 and 802.16 standards [12]. From local Saudi market point of view, Saudi Telecom is upgrading its 3G sites to LTE, while at the same time; GO Internet is offering fast internet service to the customers based on WiMAX. Marketers can observe this growing interest of wireless network operators to transform their existing 3G networks to 4G such as LTE and WiMAX to establish a powerful proposition and a brand new source of revenue for themselves. With the introduction of different kinds of multimedia applications over hand-held devices such as PDAs and smart phones, it is utmost important for wireless operators to provide guaranteed QoS to the end-user of mobile internet to maintain the competitive edge in the market. Explosive growth of mobile broadband with HSPA enabled operators to provide data rates that can deliver a fantastic browsing experience. Competitive service providers aim to deliver a stable and predictable way for customers to control their spending while giving them the scope to explore new applications without the fear of running huge monthly bills [1]. Attention to the consumer demand pattern is up to the minute because recent decades bear witness of the dramatic changes in mobile telecommunications which transversal diffusion has embraced all social classes. Latest innovation in mobile technology leads to the introduction of increasingly complex and feature rich variety of smart phones, tablets and PDAs that sometimes results in “analysis paralysis” [2]. It is well known that it costs more for organizations to attract new customers compared to retaining existing ones [22]. Also, the role 80/20 indicates that you make an eighty percent benefit from a twenty percent customer [23]. With this in mind, information technologies (IT) can be used to establish strong and profitable long-term

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relationships with customers. [22, 24, 25]. This means that by creating long-term relationship with loyal customers, you will ensure long-term success [26, 27]. CRM helps organizations understand their customers' requirements, and it is considered a tool for improving the competitive advantage [25, 28] and to enhance innovation capabilities [29]. CRM also helps organizations become more effective and efficient when dealing with customers [30]. With CRM, organizations can increase profitability and also boost customer loyalty and satisfaction [31]. IT is an enabler for enhanced customer relationships in various ways; for example, it gives firms the ability to deploy strategies by customizing individual customer relationships utilizing customer databases, interactive and mass customization technologies [32]. Technology is vital end point factor and mostly technologists observe CRM as a joint strategy with informative tools to attract customers [33]. Maintaining customer data always serves in the interest of the companies who reach out to their customers with the promise of delivering more than what they expect. Precise customer data is an essential input to successful CRM performance [34] and, therefore, technology plays an important role in CRM in adding to organization intelligence [35]. In fact, amazing advances in IT provide organizations with the tools to collect, store, analyze and share customer information in ways that greatly improve their capability to respond to the needs of individual customers and hence to attract and retain customers [36].

II. LITERATURE REVIEW

The penetration of mobile phone handsets and the diffusion of mobile technologies have been dramatically increasing in recent years. While it is still too early to predict that a mobile phone will become the ultimate converged device, people already carry their mobile handsets anytime and anywhere and use them for different purposes. Although a mobile phone was initially designed for voice communication, its functionalities have been increasingly expanded to perform various tasks and fulfill different customer needs such as listening to mp3 music, playing WAP games and watching video etc. [3-7]. Based on previous studies, the use of a mobile phone can be divided into four main categories communication-oriented (i.e. sending or receiving e-mail), entertainment-oriented (i.e. listening to music, playing a game, and watching a movie clip), personal information-oriented (i.e. using personal organizer, alarm clock, and office applications) and commercial transaction-oriented (i.e. checking bank account, doing shopping, and paying bills, etc) [8-11].

Unified Theory of Acceptance and Use of Technology (UTAT) in Taiwan’s 3G mobile communication service for instance, holds that four key constructs (performance expectancy, effort expectancy, social influence, and facilitating conditions) are direct determinants of usage intention and behaviour. Gender, age, experience, and voluntariness of use are posited to mediate the impact of the four key constructs on usage intention and behavior [13]. Additionally in the Italian mobile communication market, the use of a multi segmentation framework such as Lifestyles, product Attributes and Motivations (LAM model) to examine the impact of servitiation on mobile phones demand has been investigated [14]. Presented study invokes the impact of supposed product, service supplier’s image, product contribution and awareness upon customer’s purchase satisfaction. The character of emotions in customer’s behavior is the focal point of current research. We further unfold the role of affect or emotions in conjunction with the physical characteristics of an attitude object (mobile phone and service provider). The first part of the tricomponent attitude model consists of a person’s cognitions, that is, the knowledge and perceptions that are acquired by a combination of direct experience with the attitude object and relates information from various sources. A consumer’s emotions or feelings about a particular product and brand constitute the affective component of an attitude. These emotions or feelings are frequently treated by consumer researchers as primarily evaluative in nature: that is, they capture an individual’s global or direct assessment of the attitude object (i.e., the extent to which the individual rates the attitude object as “favorable” or “unfavorable, “good” or “bad”). Conation, the final component of the tri component attitude model, is concerned with the likelihood or tendency that an individual with undertake a specific action or behave in a particular way with regard to the attitude object. In regards to interpretations, the conative element may comprise the real attitude itself. In marketing and consumer research, the conative component is frequently treated as an expression of the consumer’s intention to buy.

III. MOBILE MARKET EVOLUTION: A CUSTOMER’S PERSPECTIVE

This section contributes to understand the relationship between the “cognition” or brand knowledge namely, image, differentiating attributes and choice factors and the “affect-laden” experiences or emotional side of the consumers that

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eventually manifests in the form of their “intention” to buy or choose 3G versus 4G service providers. Several types of assumptions related to consumer behavior are as follows:-

• Markets selection preference of consumers.

• Customer only desire what is found to be in line with their own wellbeing.

• Cumulatively, customers can realistically utilize existing informative knowledge to formulate optimal conclusions.

Realistically, purchasers always confuse variable prices against the same product, therefore, consequently, they use heuristics‘(firm‘s goodwill, price and quality) in choice-making. Demand side analysis, including behavioural economics, goes beyond these assumptions. It is noticed that sometime customer depart out the market due to the unsolved confusion of product quality goodwill and cost. A potential subject for a claim-side assessment is examining ― what the customer actually wants and currently what he is assuming or thinking? The question is linked with customer’s satisfaction against the features and services associated with the product. An important insight of behavioural economics is that it is not only the product that matters but the context as well [2]. The tricomponent model sheds light on the conative dimension resulting from emotions and knowledge components as main predictors of consumer’s purchase intention. The Tri Component Model has been shown in Fig. 1. The ABC Model of Attitudes—consisting of the three components: affect, behavior, and cognition—accentuates the relationship between knowing, feeling, and doing [15]. The first relevant difference affecting consumer behavior is the style of thinking, which emerges from the personal social environment in which consumers are embedded.

Fig. 1: Tri Component Attitude Model

Monga and John [16] have recently found that consumer’s style of thinking is relevant for product

fit evaluation in the case of brand extensions. Consumers from Eastern cultures are generally involved in deep social relationships that stimulate their orientation to pay attention to the context or field as a whole (holistic style of thinking). By contrast, Westerns consumers show an analytic style of thinking, with a general tendency to focus on attributes of objects. In turn, Eastern holistic thinkers tend to group objects on the basis of their functional or thematic interdependence, by detecting broader connections among objects than Western analytic thinkers [17]. This difference affects consumer’s evaluation of brand extensions. In the case of functional brands, holistic thinkers perceive product fit among brands more easily [16]. However no difference emerges in the degree of product fit perception in the case of prestige brands. In a context of rapid technological progress, consumers find it difficult to assess and compare alternative offerings of high-tech products. A good way for consumers to choose products is selecting those with a trusted brand name [18]. The most profound element to success of any business stems from how an enterprise attains and retains their customers. Today, more than ever, the customers feel empowered. They look to the enterprise with an expectation of knowing everything that the brand has to offer. In this quest lies the desire to understand how identical a brand is in terms of their needs and wants. The foremost companies prefer that the public awareness always catches the customer’s satisfaction and inserts in newly offered products [19]. Cognitive development precedes affective reactions, which precedes behavior. One might assume that consumers become aware of and knowledgeable about a brand, develop feelings towards it, form a desire or preference, and then make a purchase. However, this commonsensical progression is frequently true; the responsive series does not drive entirely in this way [19]. We further investigate the role of the Standard Learning Hierarchy in consumer purchase behavior by keeping in mind the sophistication and complexity of the 3G and 4G devices and services and the level of involvement of the consumers. As an example, the three-order model of information processing has been shown in Fig. 2. According to Michael Ray’s theory the regular learning hierarchy is expected when a customer is greatly engaged in the buy procedure and there is a great deal of perceived differences among variety of competing brands [19].

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Fig. 2: The 3-Orders Model of Information Executing

The standardized-learning schema, invokes that the robust research should be conducted about the customer’s attitude related to the establishment of beliefs. Attitude is realistically linked with feelings. The cognition-affect-behavior scheme is good in purchasing decisions where customers’ huge involvement is applicable. The low-involvement scheme possesses a cognition-behavior-affect order of events. This scheme affects the decision choice through customer’s knowledge rather than his feeling. The establishment of feeling is held after the purchase of desired product. This type of scheme is fair in specific types of product purchasing like cars or new homes.

Triple attitude modification schemes include: changing of affect, change in behavior, and changing of beliefs [20]. Classical conditioning method is suitable in changing of affects. Therefore, a marketer sometimes combines the less attractive product with frequently sold products. The non-negative association produces a great well opportunity to change affect without any required modification in customer’s beliefs. Modification in prices and positions of product creates customer’s attraction. For example, pasting of low price or promotion base coupons on some products. A marketer can adopt many kinds of similar strategies to attract the customer through changing beliefs of customers about a product. Commonly used strategies are: changing of existing held beliefs, changing of significance of beliefs, adding more beliefs. New beliefs when marketed well are often productive in case of reintroducing a product into the market [21]. From Saudi Arabia’s telecom market point of view, Go Internet has set the best example about changing belief of the customers

through introducing wireless internet service on the basis of WiMAX [40] as compared to other providers such as Mobily and STC, who are mainly offering broadband DSL.

IV: GROWTH ASPECTS OF TELECOMMUNICATIONS IN

SAUDI ARABIA Mobile communications markets can be divided by the type of services provided such as; paging, trunked mobile radio access and satellite and network services [37]. Saudi Arabian telecommunications sector is considered one of the biggest in the Middle East and North Africa (MENA) region. Saudi Arabia has four major mobile telecommunication companies. They are, Saudi Telecommunication Company (STC), Mobily, Zain and Bravo. Saudi Arabia Telecommunications Report [38], published by Business Monitor International, shows that the number of mobile phone subscribers in 2008 was 35,593,000 subscriptions, compared to 44,800,000 subscriptions in 2009. The report also forecasts the number of mobile subscriptions for the next five years, where it is expected to reach around 60,349,000 subscriptions in 2015. The report also provides the market share of each mobile company in the Kingdom. STC's market share for the 3rd quarter of 2010 is around 43%, Mobily's share is 41%, Zain with market share of around 15%, and Bravo only contributes with 5% to the Saudi mobile market share. The telecom market in Saudi Arabia is growing rapidly. In fact, mobile companies’ revenues have been increasing as a cumulative average rate of 15% annually, growing from SR 19.8 billion (US$ 5.28 billion) in 2001 to SR 52.5 billion (US $14 billion) in 2009. Mobile services revenues represent about 77% of the total telecom market revenues in Saudi Arabia [37]. In addition to this, the extensive study being conducted in [37] presents a detailed comparison between major telecommunication service providers of Saudi Arabia in terms of CRM and customer loyalty. For instance, from customer’s satisfaction point of view, the survey being performed in [37] indicates that Mobily has a higher average customer satisfaction as compared to Zain and STC. Similarly, in terms of customer relationship management, the results being presented in [37] show that 50% of Mobily customers rated Mobily as excellent whereas only 11.9% of STC customers rated it as excellent in CRM.

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V. CONCLUSION AND FUTURE WORK In this paper, we have presented an overview of mobile market evolution from customer’s perspective in Saudi Arabia’s telecommunication market. Different kinds of models have been discussed to measure the customer’s satisfaction and finally a detailed comparison between different telecommunication service providers in Saudi

Arabia in terms of satisfaction and CRM is illustrated. In future, we plan to apply different kinds of models UTAT and LAM for instance to understand the customer’s behavior in a more detailed manner towards this emerging mobile market and its ever changing trends.

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