Customer Satisfaction in Telecommunication Sector: An Empirical Investigation

 

Jai Parkash¹*, Dr. Sukhdev Singh², Dr Anuradha³

¹Research Scholar, I. K. Gujral Punjab Technical University (IKGPTU), Kapurthala,

²Prof and Head, Department of Management Studies, Guru Nanak Dev Engineering College, Ludhiana

³Human Capital Advisor and Consultant

 

ABSTRACT:

Purpose- The purpose of this paper is to analyze customer’s satisfaction in telecommunication Industry and also to see the effect of demographic factors on telecommunication services. Design/ Methodology/ Approach- Based on a sample of 230 respondents, Regression, one-way ANOVA was conducted to find out which predictors assess customer satisfaction in telecom services and which demographic variables were associated with telecom services. Findings: The results of the study revealed that factors such as Assurance, Empathy and Responsiveness significantly impact on customer satisfaction. Further factors such as gender, states, age, monthly income, educational qualification, impact on telecom services. Originality: Though, the predictors of service quality and demographic variables have been extensively researched in the literature, there exists the research gap and this study fills the gap. Few studies have been undertaken on service quality. The present paper will support to the existing literature and fills the research gap where ever necessary.

 

 

 

INTRODUCTION:

Service quality today has become not only the rhetoric of every business enterprise, but also occupies eminent position in every discourse. No business can survive without building its customer satisfaction and brand loyalty; likewise no organization can make a healthy living without meeting the needs of its customers. That is what organizations do: they serve people’s needs. Service quality helps in cementing the relationship between customers and the organization and it is a two-way flow of value.

 

This means that customer derives real value from the relationship which translates into value for the organization in the form of enhanced profitability and sustainability over a long period of time. (olu ojo 2010). A number of empirical studies have been conducted on the subject of service quality and customer satisfaction (Spreng and Mackoy, 1996; Jones and Suh, 2000; Ranaweera and Prabhu, 2003; Choi et al., 2004). Furthermore now a days customers are more educated and mature and as a result they expect to receive better service quality. The Indian tele-communication industry is passing through a dynamic transitional phase, as it is clearly undergoing the operation of market forces of demand and supply. The sovereignty of consumers is quite evident through their revealed preference in favor of economically rational decisions. The rapid increase in the usage of mobile telephony and the internet contributed to the increasing importance of tele-communication and the need for speed and innovation in technology as the industry is facing fierce competition over the years.  Further quality, productivity and satisfaction level of customers pose a challenge for the success and growth of all firms. Innovation and aggressive service environment has created more competition and variety of products and services. Customer satisfaction is considered as a pre-requisite for customer retention, loyalty, convenience which ultimately helps in realizing the goals like productivity, market share, growth, return on investment etc. The concept of customer satisfaction and service quality is interrelated with each other. Moreover satisfaction of customer depends upon service quality and service quality is offered as a strategy by marketers to position themselves more effectively in the market place. This research attempts to fill the gap by studying the telecommunication industry and to provide the empirical evidence on the effects of service quality on customer satisfaction.

 

REVIEW OF LITERATURE:

This section dwells on the systematic and empirical analysis of papers containing the information about the research problem on customer satisfaction. It defines existing literature available on the present topic and defines the boundary of this paper. Emerah et.al. (2013) examined the determinants of customer satisfaction in the Nigerian Mobile Telecommunication industry. The objective of the study was to identify various factors that determine customer satisfaction and to provide adequate information to enhance performance in service delivery. The 22 items of servqual instrument comprising- tangibility, assurance, responsiveness, reliability and empathy were modified to suit the telecommunication study. Value added services, Adequacy of facilities, prompt service, cost, call quality, coverage area, access, communication, courtesy, credibility, security and empathy were significant determinants of customer satisfaction in telecommunication services. Results indicated Courtesy and coverage to be the two major determinants of customer satisfaction in mobile telecom industry in Nigeria. Loke et.al (2011) in their study used the servqual model to examine the impact of reliability, responsiveness, and assurance, empathy and tangibility aspects on customer satisfaction. Gap analysis was used to determine the perceived importance and satisfaction on each dimension of service quality. The results indicated that reliability, responsiveness, assurance and empathy positively influence customer attitude towards satisfaction and loyalty. Egena (2013) empirically measured customer satisfaction with service delivery of mobile telecommunication networks in Nigeria. The objective of the paper was to measure customer satisfaction with reliability of service quality and the switching intention among customers. The results showed a positive correlation between service delivery and customer satisfaction. However high customer satisfaction indicated negative switching intentions. The researcher suggested the requirement of cost effective strategies to retain and attract customers in the scenario of increasing competition. Arokiasamy and Abdullah (2013) examined the impact of service quality on customer satisfaction using Servqual model in Malaysia. Gap analysis was used to determine the perceived and expected satisfaction level on servqual dimensions. The results indicated empathy, responsiveness, assurance, tangibility and reliability to have a positive impact on customer’s perception of service quality. Seth et al (2008) highlighted the importance of service quality in telecom sector. The present study strived to develop a valid and reliable instrument to measure customer perceived service quality based on service delivery and technical quality. The results of the study highlighted responsiveness to be the major service quality attribute followed by reliability, customer perceived network quality, assurance, convenience, empathy and tangibles. The study further stimulated future research focused on service quality and its impact on competitiveness for telecom players to influence customer satisfaction and retention. Wang and Polo (2002) highlighted service quality, customer satisfaction and customer value as important success factors of service providers. The objective of the study is to identify the influential factors based on service quality, customer value, customer satisfaction and behaviour intentions of customers. The research results indicated the improvement in network quality and reduction in customer perceived sacrifice as the key factors influencing the purchasing decision based on customer value, customer satisfaction or service quality.

 

RESEARCH METHODOLOGY:

The research is a combination of descriptive and quantitative study to illustrate various dimensions of service quality with the help of SERVQUAL model that could contribute to service quality improvements.

 

OBJECTIVES OF THE PAPER:

·         To explore the key dimensions of service quality in the tele-communication sector.

·         To study the relationship between demographic variables and various services of tele-communication sector.

·         To ascertain which aspect of service quality have significant impact on customer satisfaction.

 

The Servqual Model:

For the measurement of customer satisfaction in telecommunication industry, SERVQUAL model have been used by identifying five components of service quality with further four-five dimensions. There are total 22 statements in five parameters. A brief description of these dimensions is given as follows:

 

Reliability:

involves consistency of performance and dependability. It also means that the firm performs the service first time and honor its promises. Responsiveness concerns the willingness or readiness of employees to provide service. It involves timeliness of service. Empathy involves politeness, respect, consideration and friendliness of contact personnel (including receptionists, telephone operators). Tangibles include the physical evidence of the service. Assurance includes certainty in the mind of customer that problem will be handled. Following are the various dimensions and sub dimensions of service quality in detail.

 

SAMPLING AND DATA ANALYSIS:

The data was collected from the customers of through a structured questionnaire to evaluate the services of telecom industry. The questionnaire was designed on the basis of SERVQUAL dimensions and the prior studies on the service quality. Statements were rated on Likert scale from 1 to 5 referring 1 to strongly disagree and 5 to strongly agree. There are approximate 13 companies existing in the sector and the customers of BSNL, TATA, RELIANCE, AIRTEL, IDEA, and VODAFONE were selected. The rationale for selection of these companies for the study was on the basis of their market share published in telecom and regulatory authority of India. Stratified random sampling technique was used and a sample of 230 respondents was chosen. The data collected through the questionnaire was analyzed by ANNOVA and regression analysis. SPSS 20 software is used for Descriptive analysis, one way annova,  Regression analysis and t-test.

 

The Hypothesis Formulated for the study are as follows:

1. There is no significant difference in the mean scores of telecom services in demographic variables (Gender, States, Marital Status, Age, Educational Qualification)

2. Factors associated with service quality are significant drivers of customer satisfaction in Telecom Sector

2a. Tangibility has no significant influence on customer satisfaction

2b. Reliability has no significant influence on customer satisfaction

2c. Assurance has no significant influence on customer satisfaction

2d. Empathy has no significant influence on customer satisfaction

2e. Responsiveness has no significant influence on customer satisfaction

 

ANALYSIS AND DISCUSSIONS:

The analysis and discussions of the paper are as follows.

 

Profile of the Respondents taken for the Study

This section of the study deals with the demographic profile of respondents

 

Table No.1

	Demographics	N
Gender	Male	167
	Female	63
	Total	230
States	Punjab	98
	Haryana	80
	Rajasthan	52
	Total	230
Marital Status	Single	128
	Married	102
	Total	230
Age Group	Below 20	27
	20-30	58
	30-40	68
	40-50	47
	More than 50	30
	Total	230
Educational Qualification	High School	7
	12th	30
	Bachelor	88
	Masters	77
	Others	28
	Total	230
Profession	Unemployed	27
	Self-employed	28
	Government Job	39
	Private Job	68
	Professional	38
	Business	30
	Total	230
Monthly Income	Less than 5000	27
	5000-15000	55
	15000-25000	63
	25000-35000	48
	Above 35000	37
	Total	230

 

The above table describes the demographic profile of respondents with their mean and standard deviation. The profile includes gender, states, marital status, age group, educational qualification, profession and monthly income of 230 respondents. In gender there are more number of males than females. Majority of the respondents are in the age group of 30-40 followed by 20-30 years. Further in the profession category; majority are from private job followed by government job. The highest mean score in monthly income is in the category above 35000.

 

One Way ANNOVA:

This test has been conducted on the basis of Gender, States, Marital status, Age group, Educational qualification, profession and monthly income (As described below).

Table no.2

 

The above table explains one-way Annova on demographic variables. Hypothesis formed for the study was no significant difference in the mean scores of telecom services and various demographic variables. P-values were tested on 5 % level of significance. Out of seven demographic variables, null hypothesis was rejected in four and accepted in three variables. Significant differences were found in marital status, age, educational qualification and monthly income. Null hypothesis is rejected in all these four variables signifying that the perception of respondents vary according to the above mentioned variables.

 

Exploring the Relationship between Service Quality and Customer Satisfaction:

To explore the relationship between service quality and its various dimensions, the five dimensions of service quality were taken as independent variables. The overall service quality for the telecom services as rated by respondents is taken as dependent variable. The mathematical representation of research model for the above relationship is displayed as:

 

Y=α+β₁x₁+β₂x₂+ β₃x₃+ β₄x₄+ β₅x₅

Y= Customer Satisfaction

x₁,x₂,x₃,x₄,x₅= Dimensions of SERVQUAL

β₁, β₂, β₃, β₄, β₅= Coefficients of the dimensions of quality

 

Table No.3

Model Summary
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.667a	.445	.432	.54070
a. Predictors: (Constant), Responsiveness, tangibility, Empathy, reliability, Assurance

 

Table No.4

ANOVAa
Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	52.407	5	10.481	35.851	.000b
	Residual	65.488	224	.292
	Total	117.896	229
a. Dependent Variable: Service Quality
b. Predictors: (Constant), Responsiveness, tangibility, Empathy, reliability, Assurance

 

 

Table No.5

 

To examine the fit of regression model and to study the impact of service quality on customer satisfaction; regression was used with dimensions of service quality as the predictors. The relationship between dependent variable and independent variable considered with R² is .445 which reveals that independent variables explains 44% variation in dependent variable. Considered with adjusted R^2, it shows the value at .445. According to F-test, the value was 35.851, considering the result of significant level is .000 which is below .05 for testing of hypothesis. It means that above five factors are best indicators of service quality for customer satisfaction. As shown in table, the values of tangibility, assurance and empathy are statistically significant. The values of variance inflation factor and tolerance value is also given in the above said table. Therefore, the multiple regression equation for customer satisfaction is as follows;

Customer Satisfaction= 1.229+0.187(Tangibility) --0.104(Reliability)+0.284(Assurance)+

0.157(Empathy)+0.170(Responsiveness)

 

FINDINGS OF THE STUDY:

In the present study, the dependent variable is metric and independent variables are non metric, therefore, One -way Annova was applied in order to test the hypothesis between demographic variables and telecom services. Seven demographic variables were taken to test null hypothesis as to there is no significant difference in the mean scores of telecom services in various demographic variables. The results in table no.2 showed significant difference in the mean scores of marital status, age, educational qualification and monthly income. The various telecom services include internet services, network performance, mobile plans and tariffs, billing accuracy, bill payment, recharge facility, Roaming facility. The findings showed that income of the person whether high or low, educational qualification, marital status all shows significant difference as far as telecom services are concerned. Further, Multiple regression was run to find out the relationship between customer satisfaction and various dimensions of service quality. As shown in table no. 3, 44.5% variance is significant for customer satisfaction (R2 =.445, F=35.851, P=.000).Results of Multiple regression are shown in table no.5 which  identifies only three out of five dimensions influencing customer satisfaction with positive impact. Specifically, Assurance (t=3.130, P<0.02), Empathy (t=2.430, P<0.01), Responsiveness (t=2.229, P<.001) contributes to customer satisfaction. However, positive relationship was found with all five dimensions. From the above results, it can be said that  H2c Assurance has a significant influence on customer satisfaction and H2d Empathy has a significant influence on customer satisfaction and H2e Responsiveness has a significant influence on customer satisfaction.It is also highlighted that assurance is the best predictor of service quality followed by responsiveness and empathy. Assurance has the most important positive impact on customer satisfaction. However, Tangibility and reliability does not affect customer satisfaction at statistically significant level.

 

CONCLUSION:

The current research was carried out on Indian telecommunication sector comprising of six main network providers with the objective of investigating the impact of service quality on customer satisfaction. In conclusion, all service quality dimensions are directly related to the customer satisfaction comprising of tangibility, reliability, responsiveness, assurance and empathy. Regression analysis revealed “Assurance” as the most important factor for customer satisfaction with service quality. Assurance consists of ‘problem handling’, “knowledge and skill of operational staff”, “charges of the services availed”. This means that the customers are fully assured with above mentioned services. The results of the study revealed that the companies are competing in terms of assurance, empathy and responsiveness to build long lasting relationship. The companies should put emphasis on tangibility and reliability in order to improve their quality of service. The results of the study also found that accurate, timely and promised services should be provided to the customers.

 

IMPLICATIONS FOR THE MANAGERS:

No research is complete without its implication. The analytic findings of the paper have practical implication for the telecom managers who strive to manage their services for customer satisfaction Following are some suggestions which telecom companies should taken into consideration.

1.        Companies need to be more effective and efficient in order to do services on time as promised so that reliability of the customers can be increased.

2.        As the tangibility services are insignificant, therefore management should train, monitor and evaluate the performance of its employees from time to time

3.        Managers of the companies should emphasize on their target market more specifically in order to recognize the customers need and cater them properly.

4.        As per the paper, strong differences were found regarding telecom services and different age groups, marital status, educational qualification and monthly income. Thus the telecom operators can embark upon a strategy of targeting customers with specific education and monthly income level. Different packages can also provide as per age groups and marital status.

 

REFERENCES:

1.        Ojo olu “The relationship between service quality and customer satisfaction in the telecommunication Industry: evidence from Nigeria” Broad research in Accounting, Negotiation and Distribution, Vol. 1, Issue: 1, 2010 PP: 89-100.

2.        Spreng, R. A., and Mackoy, R. D., “An Empirical Examination of a Model of Perceived Service Quality and Satisfaction. Journal of Retailing”, 72(2), 1996, 201–214.

3.        Jones, M. A., and Suh, J. “Transaction-Specific Satisfaction and Overall Satisfaction: An Empirical Analysis. Journal of Services Marketing”, 14(2), 2000, 147–159.

4.        Ranaweera, C., and Prabhu, J.  “On the Relative Importance of Customer Satisfaction and Trust as Determinants of Customer Retention and Positive Word of Mouth.” Journal of Targeting, Measurement and Analysis for Marketing, 12(1), 2003, 82–90

5.        Choi, K. S., Cho, W. H., Lee, S. H., Lee, H. J., and Kim, C. K. “The Relationships among Quality, Value, Satisfaction and Behavioral Intention in Health Care Provider Choice: A South Korean Study” Journal of Business Research, 57(8), 2004, 913–921.

6.        Emerah, A., Oyedele S. David, J., “Determinants of Customer Satisfaction in the Nigerian Telecommunication Industry- an empirical evidence”, International Journal of Management and Strategy, Vol no.4, Issue 6, Jan-June 2013

7.        Loke, S., Taiwa, A., Salim, H., Downe, A.(2011).“Service Quality and Customer satisfaction in a Telecommunication Service Provider”, 2011 International Conference on Financial Management and Economics, IPEDR vol.11, 2011.

8.        Egena,O.“Customer satisfaction in mobile telephony: an analysis of major telecommunication service providers in Nigeria”, Asian journal of Management Research, vol 4, issue 1, 2013, 1-11

9.        Arokiasamy, A. and Abdullah, A. “Service quality and customer satisfaction in the cellular Telecommunication service provider in Malaysia”, Researchers World- Journal of Arts, Science and Commerce, Vol. IV, Issue 2- April 2013

10.     Seth, A., Momaya, K. and Gupta, H “Managing The Customer Perceived Service Quality For Cellular Mobile Telephony- An Empirical Investigation”, Vikalpa, Vol 33, No 1, Jan-march 2008.

11.     Wang, Y. and Polo, H.,“Service quality, customer satisfaction and behavioral intentions: Evidence from Chinas Telecom Industry” , Emeraldsight.com, vol 4, Issue 6, 2002, pp 50-60.

 

 

 

Accepted on 26.04.2017          © A&V Publications all right reserved