J. R.M. Philemon and M. E.S. Mngulwi 10th Operations Research Society Of Eastern Africa (ORSEA) Conference 2014- Nairobi, KENYA Factors Influencing Customer Switching Behavior among Mobile Phone Service Providers: Case of University Students 10th ORSEA CONFERENCE 2014 J. R.M. Philemon and M. E.S. Mngulwi UNIVERSITY OF DAR-ES-SALAAM BUSINESS SCHOOL

OUTLINE Introduction Problem statement Model of customer switching behavior Methodology Findings Conclusions Recommendations 10th ORSEA CONFERENCE 2014

Introduction 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 (cont’d) 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

Problem Statement Some researchers postulate that consumers’ switching behavior poses a serious threat to long-term 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

Model of Customer Switching Behavior KEAVENEY 10th ORSEA CONFERENCE 2014

Methodology Population: Students of the University of Dar-es- salaam (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

Profile of the Respondents 10th ORSEA CONFERENCE 2014

First Mobile Phone Subscription 10th ORSEA CONFERENCE 2014

Factors Influencing Switching Behavior (Descriptive Results) Mean Std. Deviation Std. Error Mean COMPETIT 169 2.6154 1.31385 .10107 RATE 2.3333 .94631 .07279 SERVICEF 2.2643 .97174 .07475 RESPFAIL 2.2032 .96507 .07424 ENCOFAIL 1.9201 .99977 .07691 INVOLUNT 1.8491 1.18874 .09144 ETHICAL 1.7618 .88465 .06805 10th ORSEA CONFERENCE 2014

T-Test: Factors Influencing Switching Behavior-1   Test Value =2.5 t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper RATE -2.290 168 .023 -.1667 -.3104 -.0230 SERVICEF -3.153 .002 -.2357 -.3833 -.0881 ENCOFAIL -7.540 .000 -.5799 -.7317 -.4281 RESPFAIL -3.999 -.2968 -.4434 -.1503 COMPETIT 1.142 .255 .1154 -.0841 .3149 ETHICAL -10.847 -.7382 -.8725 -.6038 INVOLUNT -7.118 -.6509 -.8314 -.4704 10th ORSEA CONFERENCE 2014

T-Test: Factors Influencing Switching Behavior-2 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

Recommendations -1 Offer services at relatively cheaper rates so as to woo university students to their side. Avoid service failures. 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

Recommendations-2 Invest many resources in maintaining current subscribers while attracting new ones. 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

THANK YOU VERY MUCH 10th ORSEA CONFERENCE 2014