CHAPTER V SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

Transcription

1 CHAPTER V SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

2 CHAPTER V SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION 5.1 Summary According to the Indian Constitution, telecommunications (or telecom) services are controlled by the Central Government s of India. Hence, all policies for promotion, development, regulation (including pricing) of telecom services are formulated and implemented for the nation as a whole. Since 1991, focused telecom reforms have been introduced for privatisation and diversification in competitive provisioning of services: globalisation of trade under the WTO agreements and capital by liberalisation of imports and foreign direct investment, establishment of an independent regulator (i.e. Telecom Regulatory Authority of India), introduction of cellular phones, universal service access through the formulation of National Telecom Policy 1994 and 1999 and corporatisation of public provider of telecom services (e.g. Bharat Sanchar Nigam Limited for domestic services). From the supply side, the telecom reforms and policies have been aimed at higher provisioning and wider access to telecom services for business, government and residential subscribers. Both provisioning and access are preconditions for usage of telecom service, i.e. basic and value added services (including internet and broadband services), as provided by public and private telecom companies over their telephone and wireless networks. Telephone lines provide the subscribers with access or connection to the network. Thus, provisioning, access and usage are equally important and sequential stages in the process of production through consumption of telecom services. During the course of literature review, it has been found that the expansion of the telecom industry in India has been fueled by a massive growth in cellular phone users which had reached to a level of 46 million users in 213

3 November In 2005, there was a total of 12 players in the market with the five major players being Bharti Televentures Ltd. (Bharti), Bharat Sanchar Nigam Ltd. (BSNL), Vodafone India (Vodafone) then Hutch, Idea Cellular Ltd. (Idea) and Reliance India Mobile (RIM). All the players accepted services based on Code Division Multiple Access (CDMA) as well as GSM technology. Over million people in India now (May 2009) own cellular phones and this is expected to reach 500 million by Therefore, the study focuses on whether cellular service providers are expected to shift their focus to increasing loyalty by designing their customer acquisition. Redesigning pricing and service programmes in such a way as to reward increase usage and subscriber longevity. Offering targeted subscribers product or service enhancements such as new handsets or tariff reductions. The chief objectives of the study focused on the analysing the usage pattern, in terms of purpose by the various categories of cellular phone customers. The obtain opinion of customers regarding the functionalities of the various value added services to study of the factors that influenced the behaviour of cellular customers, to ascertain the level of satisfaction derived by users and the reasons for dissatisfaction experienced by the past customers. The study also aim to offer suggestions for retention of existing customers in cellular phone market. The current study is descriptive in nature. Erode District consists of 7 taluks viz., Sathyamangalam, Bhavani, Gobichettipalayam, Perundurai, Erode, Kangayam and Dharapuram. All the seven taluks have been considered as sample areas and 35 per cent of the population have been selected from each sample area to form a basis for population size. The total population of the seven constituencies is 5,00,242 people, out of which 0.5 per cent (2501) was fixed as sample population. The cluster based sample framework was adopted. The sample range for six cellular phone service providers (BSNL, Vodafone, Aircel, AirTel, Reliance, and Tata Indicom) was fixed, based on the population 214

4 size of the study areas. Data were collected by using one or more appropriate methods: observation, interviewing and mail questionnaire. 5.2 Major Findings of the Study The major findings of the study are summarised in this sub-section. I. Socio-Economic Profile of the Cellular Subscribers The analysis on the socio-economic profile of the respondents reveals the fact that per cent of the respondents surveyed are males and per cent of the respondents belong to the age group of years. The study clearly evidences that per cent of the respondents are found to be under graduate degree holders. Simultaneously it has been observed that per cent of the respondents are employees of either public or private sector institutions and per cent of the respondents earning ranges above Rs per month. It has also been found that per cent of the respondents surveyed are married. II. Factors Influenced and Motive behind Availing of Cellular Services It has been found that per cent of the respondents have opined that they were self motivated in making purchase decision per cent of the respondents have expressed that they have cell phones for the convenience of contact with others. 215

5 It has been observed that per cent of the respondents own Nokia hand set. In the processes of the study, it has been found that out of 2501 respondents surveyed per cent of the respondents are using Airtel service, the largest local service provider of Tamil Nadu. Regarding the usage of technology among the surveyed group, it has been found that per cent of the respondents own GSM (Global System for Mobile Communication) technology-based cellular phones per cent of them are using CDMA (Code Division Multiple Access) technology and 1.44 per cent of the respondents are having the privilege of WLL (Wireless Local Loop) technology-based cellular phones. It has been observed that per cent of the respondents have accessed to the prepaid services and per cent of the cellular phone users are using the particular cellular phone service for the past one to five years per cent respondents have opined that they spent between Rs per month for recharging of their cellular phone service and it has also been found that per cent of the respondents are using cellular phone for more than 30 minutes daily. The batch of per cent of the respondents have said that they are using the cellular phone at any time or all times. The study reveals the fact that per cent of respondents are using their cellular phones for both business and personal purposes. 216

6 It has been found that majority of the respondents use voice services in comparison to the others like SMS, VAS, MMS, and GPRS etc. Out of 2501 respondents surveyed, it has been found that per cent of the respondents are using their cellular phones at home. III. Influences of factors on Respondents Usage of cellular phone Service In reply to query raised on the customer level of awareness based on the products and marketing features, it has been inferred that per cent of BSNL customers have selected its service due to higher brand awareness. Similarly per cent of Aircel customers have selected its service due to higher availability of dealers-point around the study area per cent of Airtel customers have selected its service due to higher service quality per cent of Vodafone customers have opined that they selected it, by being influenced by its offer conducive Tariff rates per cent of Tata customers have selected its service, due to availability of higher network quality and 9.81 per cent of Reliance customers have selected its service, influenced by the other factors that are not provided by other five popular service renders. In correlation, the literature discussed in the beginning of the chapter IV points out that a reduction in IUC tariffs coupled with increased competition with the entry of several new players could lead to local call tariffs being as low as 10 paise per minute and STD at about paise per minute by Thus, majority of 217

7 the respondents have opined that they have been highly satisfied with the roaming charges of the cellular service providers. IV. Customer Satisfaction It is found that majority of the respondents have expressed high degree of satisfaction towards the roaming tariff charged by their service providers. The satisfied customers of Airtel Company have reported that it takes lesser time/days for activation when compared with the other service providers and does it in the same day itself and Aircel service has the good network connectivity compared to its competitors. A batch of satisfied customers of Airtel Company have complimented the single strength on network of their service provider, whereas they have said that they do not receive the bills properly on time. It is found that majority, i.e., 54 per cent, of the respondents have contact with service provider directly to sort out their grievances. The study clearly states that BSNL, being a public owned service provider, takes minimum time to resolve the problems of its customers. Similarly it has also been observed that respondents have primarily contacted the customer care to know the details on network connectivity. As per the analysis of data on customer satisfaction towards the service quality of their service providers, it has been found that Vodafone is quick in responding to customer enquires in comparison to its competitors. 218

8 A common user s primary choice of value added service rests with voice service and Ring tones is the highly preferred value added service among the other services, with which a common man with a basic phone could be benefited. In comparison to others, Airtel has more satisfied customers as far as network connectivity is concerned. It is implied from the study that the respondents have primarily expressed that they have been satisfied with the accuracy in billing procedures adopted by their service providers. V. Customers Perception on SMS Services The results of primary survey states that per cent of the respondents are aware of sending SMS to others through cellular phones and per cent has been using their cellular phone mostly for sending SMS. On an average, per cent of the respondents sent SMS per day to others. On the other hand, per cent of the respondents have received 1-3 SMS daily from others. Further, it has been found that per cent of the respondents have used SMS for communicating with friends. Majority of the respondents have opined that they are primarily willing very much to accept advertising of products / services by SMS at their cellular phones. The analysis of data clearly reveals the fact that per cent of the respondents are willing to take up advertising service related to subsidy / discount on the products and services. And it has 219

9 been observed that a customer on an average, receives 1-5 SMS on advertisement per month. It has been interesting to note that per cent of the respondents did not purchase any product through SMS. On the complementary note to this statement, it is found that the respondents have opined that they do not get SMS within stipulated time frame of any service utility. V. Perception on shift from one service provider to other It is found that per cent of the respondents have never changed the service provider and per cent of the respondents are using the same service provider for more than two years. Further it is found that per cent of the respondents have primarily opined that they shifted to other companies due to the availability of better schemes. It has observed that per cent of the samples have opined that they are satisfied with the existing service provider and they have no idea of shifting from the existing service provider. VI. Result of Hypotheses Test The Result of ANOVA test establishes no significant relationship between the socio-economic characteristics of the customers and their preferences towards the selection of service category of the cellular phone service provider. Chi-square test concluded that the place of usage of cellular phone is also the reason for selection of service providers by the cellular phone customers. 220

10 It has further been assessed with the help of Multiple Regression Analysis that the cellular phone usage behaviour of customer is greatly influenced by both socio-economic background and the purpose and place of its usage. To measure the association between the influences of various factors on the customer behaviour and choice of service provider, the hypothesis is framed and tested. It has been concluded that there exists significant relationship between the factors that influenced the customers towards the selection of particular service provider. In another Chi-Square test, it has been found that in a highly competitive cellular service market, the charges for the various services are not same among the different service providers. The variation in the service charges depicts the product differentiation strategies of major cellular service providers. Customers opinion on network quality of various service providers is again tested with the help of Chi-Square test and its viability is measured with the help of Contingency co-efficient. The detailed analysis of data clearly states that customers opinion on network quality of their service providers differs from one to the other. These factors are treated as the product differentiation features of the service renders. To draw justification on customers perception towards the functioning of customer care centers of service providers, a hypothesis was framed. The hypothesis framed was rejected and it has been concluded that the opinion of the customers towards 221

11 the functioning of customer care centers varies from one individual company to the other. The results of Cronbach s Reliability analysis clearly defined the statement that customers differ in their judgment (discernment) about the customer retention strategies of various cellular service providers operating in the market (activation, call charges and customer care). As stated earlier in the Chapter IV, SMS is considered as less expensive and more used service among the various categories of cellular phone users. Its usage and preferences among the customer were tested with the help of Chi-Square test and its viability is measured with the help of Contingency co-efficient. The result concludes that the usage and preferences of SMS services do not differ one category of customers to the others (Based on social status). Customers level of satisfaction on the network qualities among the sample service providers is tested with help of Chi-Square test and its viability is measured with the help of Contingency coefficient. The analysis of data evidently proves that customers level of satisfaction on the network qualities is independent in nature and it differs from one type of service providers to the others. The result of Chi-Square test on customers level of satisfaction on the billing and other services reveals the fact that customers level of satisfaction is closely related with the billing and other services provided by operators. 222

12 In another test, the results of Cronbach s Reliability analysis clearly describe that there exists differences in customers level of satisfaction towards general and value added services provided by the one cellular phone service provider to the others. With the help of Chi-square test, it has been found that there exists a significant relationship between the reasons stated by customer for switching over from one company to the other. The result obtained with the help of chi-square test reveals that there is no similarity in the state of mind of the customers in shifting from one service provider to other. 5.3 Suggestions The few valuable suggestions made by the researcher are grouped as suggestions to customers and to service providers Suggestions to Customers Some of the thought provoking and constructive suggestions made by the researcher are presented in this sub-section. Cell phone industry in India has progressed from offering mere voice connectivity to providing value added services such as MMS and internet connectivity with phone types ranging from normal cell phones to the ones having PDA features. Faced with such a wide range of options, customers are finding it increasingly difficult to choose the right service provider. Therefore, it is suggested that they may choose premium paying, good network connector, easily available customer service, reliability and quality of service provider. 223

13 Similarly, it is also suggested to them that once the customer opts for a cell phone service, the cell phone number becomes his identity. This is the reason why changing the service provider at a later point of time becomes impractical. Therefore, it is imperative for the prospective customer to evaluate service providers before he/she selects any of them. Customers are asked to take into consideration the following criteria to evaluate the various service providers: Network coverage, Quality of service, Customer service/satisfaction, Calling plans, Schemes and offers, Recoverability and Value added services TRAI is yet to enforce the cellular phone number portability on the cellular providers, which will let the customer change the provider without changing the number. Thereafter, the companies might show the same (if not more) enthusiasm towards the existing customers than the prospects and hopefully, quality will result from competition. But until then, it's the responsibility of the customer to pick his/her service provider after a fine study and synthesis. Further, it is recommended to the customers that they have to take into consideration the industrial experts advice before they select any service provider, as there are several plans available; depending on customers usage they can choose what works for them. They must primarily decide whether to get a prepaid/postpaid connection. The customer should take into consideration that prepaid works better for moderate and minimal cell-phone users, whereas postpaid for normal, social and business users. BSNL s prepaid/postpaid services are comparatively cheaper than the other GSM operators, followed 224

14 by Airtel, considered to be the next best. In CDMA, Reliance works out cheaper than Tata Indicom. It is more widespread than Tata (for now at least), and that being said, there are more chances of availing of discounts on intra-network services Suggestions to the Service Providers According to the Indian Communications industry overview suggestion although, this industry has matured tremendously over the last fifteen years, huge scope of growth still waits to be explored. The urban India is more or less well connected with basic telephony, but the semi-rural area needs immediate attention. Further, the most important and untapped area is the rural India and huge scope of growth lies there. The Government of India is focused on the development and faster growth of ruraltelephony in rural India and such that it has equipped the latest telecommunication policy with host of fiscal incentives and tax rebates to attract investors, both domestic and foreign investors. Therefore, the cellular service providers must realise the prevailing situation and make effective effects to tap the market potentials. The rural and sub-urban customers always complain that Airtel and Vodafone provide good coverage in urban sectors and BSNL reaches much of the rural sector and has good signal quality. Whereas, Aircel seems to be poor in network connectivity. Therefore, the concerned service provider is suggested to make beneficial strategies to overcome this shortfalls. The elaborate discussion of various facts in the current study gives a scope for the researcher to suggest to the stakeholders of 225

15 the telecommunication industry that they must take into consideration the following factors to build-up their relationship with it customers in the stiff competitive and throat-cutting market. Their service products must include a high end, comfortable tariff rate and more technology appealing services, (i.e.) not just confining to basic telephony but also extending to Internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The service providers must also realise the fact that with revenue from voice service dipping, therefore, they should look at newer avenues for mobile Value Added Services (VAS). Because in India, the ARPU (Average Revenue Per User) is the lowest in the world and hence the scope for innovative VAS is immense. Further it is suggested to the service providers that they could make the best use of the below mentioned factors for framing constructive strategies. The factors that contributed for the success of Indian telecommunication industry are as follows: > Indian s friendly economic and telecommunication policies and low operational cost > Availability of world class infrastructure at a much cheaper cost > Availability of huge English speaking workforce > Prevalence of strong technical education amongst the majority of educated Indians > Large number of science and engineering graduates > Highly skilled workforce give assurance for high quality output 226

16 > Growing usage of innovative technologies, effective and efficient entrepreneurship skills ultimately results in good client and service provider's relationships > Recognisation of global brands and high degree of awareness among the common public give huge scope for development across business industries around the country. Moreover, it will also results in expansion of existing relationships by mergers and joint ventures with foreign and domestic counterparts. As it could be noticed that recently the domestic players have gain huge success in overseas markets (like Reliance and Tata) > Ever growing domestic market, especially the rural market, increased electronics and hardware manufacturing base in India > Aggressive promotion of Research and Development in telecommunication sector, increased penetration of computer usages and increased utilisation of internet facilities, growth of domestic software market and development of local language software, especially for the use in rural masses, use of information technology to increase productivity and its effective usage of it for generating employment and increased number and quality of training facilities across India can be used as the best market skimming strategies by these nascent service providers. 5.4 Conclusion With million connections, the Indian telecommunication industry is the fifth largest and fastest growing infrastructure sector in the world. The subscriber base of the Indian telecommunication industry has grown by 40 per cent in the year 2005 and is expected to reach 500 million by the end of the 227

17 year In the last 3 years, two out of every three new telephone connections were wireless and it accounts for around per cent of the total telephone subscriber base in India, as compared to only 40 per cent in The wireless subscriber base in India increased rapidly from million connections in 2004 to million connections in the financial year Since, the year million new wireless subscribers are added to the list of various service providers. The wireless technologies which are currently in use in Indian industry are Global System for Mobile communications (GSM) and Code Division Multiple Access (CDMA). The Indian telecommunication industry now has twelve GSM and five CDMA operators providing cellular phone service in 20 telecommunication circles and four metro cities, connecting more than 2000 towns across the country. The Telecom Regulatory Authority of India (TRAI) regulates the Indian telecommunication industry and it has been recognised for it good reputation for transparency and competence. It is generally portrayed that the industry is faced certain draw backs like: slow telecommunication reform process and low penetration capability in rural India. Moreover, service providers bears huge initial cost for establishment of basic infrastructure and they face difficulties in margins, achieving break-even margins. Huge initial capital investments and limited spectrum availability and high interconnection charges between the private and state operators, are added to the existing complication. However, spell of positive note of growth for the industry is from the offering of VAS. Global VAS accounts for per cent of the total cellular phone service and in India according to the Cellular Operators Association of India (COAI), it is at 10 per cent currently and expected to contribute 20 per cent of the cellular phone revenues over the next three years. The VAS industry in India is estimated to grow with 50 per cent Compounded Annual Growth Rate (CAGR), including Enterprise VAS, leading to a US $348.8 million market by the end of Industry pundits opine that in near future the focus of cellular phone operators is expected to shift from customer acquisition to VAS promotion. The primary 228

18 focus will be on reinvention of traditional VAS and early adoption of high-end services like enterprise VAS. The detailed analysis presented in this study describes the Customers Attitude and Perception towards Client Retention Strategies of the Cellular Service Providers in India. The study states that as competition in the telecom arena intensified, service providers took new initiatives to persuade customers with more valuable services. Value Added Services (VAS) in the new generation cellular phone technology arena are a rising star in India s fast growing wireless business. Voice based services are increasingly becoming a commodity. Therefore, it could be concluded that the enterprise market represents high value services for an operator, as many of the customers will pay a premium for availability, reliability and quality of service. Current mainstream offerings to the enterprise market are based around capacity and hosted services, sometimes complemented by IT outsourcing projects. But the challenge for the operators is how to offer services that can deepen the relationship with the Enterprise through increasing the scope of their service offering. 5.5 Scope for Future Research The detailed discussion of various issues in this study leads to the scope for further research in the broad areas of: Dynamic Customer Retention Strategies of the Cellular Service Providers in India. Customers Perception towards Mobile Value Added Services Competitive strategies of private and public Cellular service providers in India Growth of Rural Cellular Phone Subscribers in India - Attitude and Behavioural Changes 229