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International Journal of
Emerging Research in Management &Technology Research Article December

ISSN: 2278-9359 (Volume-2, Issue-12) 2013
An Analytical Study of Customer Satisfaction influencing

Brand Loyalty and foster Recommendation for Mobile
Services Providers of Indian Telecom Industry
Mr. Kumar Ratnesh, Dr. Amit Kansal,
Research Scholar, Professor IIMT Management
Mewar University, Rajasthan, India College, Meerut, India
Abstract:
The Indian mobile phone market is highly competitive with more than 150 device manufacturers trying to attract the
consumers with their schemes and offers. Most of these producers focus their efforts on the low-cost feature phone
market, which constitutes over 91 per cent of overall mobile phone sales, offering a huge scope for growth. India
added 1.49 million GSM subscribers in July 2013, taking the total GSM user base in India to 672.63 million.
Moreover, in June 2013 the GSM telecom operators added 2.33 million new subscribers, to take the user base to 271.6
million at the end of the month, according to the data released by Cellular Operators Association of India (COAI).
The GSM incumbents—Bharti Airtel, Vodafone and Idea Cellular—have jointly crossed 70 per cent in revenue
market share and had a 99.6 per cent share of the incremental revenues during the June 2013 quarter, as per the
latest figures released by TRAI.The mobile value-added services (MVAS) market is expected to reach US$ 9.5 billion
in 2015, from US$ 4.9 billion in 2012, as per a joint research report by Wipro Technologies and the Internet and
Mobile Association of India (IAMAI).A total of 9.4 million smartphones were shipped into the country, registering a
growth of 167.3 per cent on an annual basis. India also witnessed 73.5 million mobile handset shipments for the
January-April 2013 period.
I. Introduction
India is the world’s second-largest telecommunications market, with 898 million subscribers as on March 2013. The
sector's revenue grew by 13.4 per cent to reach US$ 64.1 billion in FY12.Telecom infrastructure in India is expected to
increase at a compound annual growth rate (CAGR) of 20 per cent during 2008-15 to reach 571,000 towers in
2015.Internet traffic in India is expected to reach to 2.5 exabytes per month in 2017 from 393 petabytes per month in
2012, as per a Cisco study. In addition, the wireless connectivity in India is expected to grow at about 40 per cent traffic
by 2017, up from 38 per cent in 2012.India has immense opportunities for telecom operators and is one of the best
markets for telecom business. “Right now, we feel the Indian market is ripe for M&A stories,” highlighted Mr Dmitry
Shukov, CEO, Sistema Shyam Teleservices (SSTL). India has recorded 55.48 crore mobile users as per Juxt’s study
titled, India Mobile Landscape (IML) 2013. “More than 29.8 crore, about 54 per cent, of these device owners are in rural
areas as compared to 25.6 crore in cities and towns," added Mr Mrutyunjay, Co-founder, Juxt.The telecommunications
industry attracted foreign direct investments (FDI) worth US$ 12,866 million during April 2000 to June 2013, an
increase of 7 per cent to the total FDI inflows, according to data published by Department of Industrial Policy and
Promotion (DIPP).Moreover, the cumulative revenue of telecom service providers was recorded at Rs 54,284 crore (US$
8.32 billion) in the January-March 2013 quarter, as per Telecom Regulatory Authority of India (TRAI) data.
Key Developments & Investments
 Viom Networks Ltd has won a contract to provide Wi-Fi and other Internet-related services at the Chennai
International Airport. The deal is expected to be in the range of Rs 20– Rs 30 crore (US$ 3.06- US$ 4.59
million)
 Tata Consultancy Services (TCS) has been selected to deploy a new rating and billing system for Macau's
telecom service provider, CTM. The solution will allow CTM's customers to receive faster response to enquiries
and enable them to better manage their services and bills, according to the company's press statement
 Aegis, the global outsourcing and technology services firm under Essar Group, has won a human resource
outsourcing contract from Saudi Telecom Co, further extending its existing relation with the company. The deal
is estimated to be in the range of US$ 50- US$ 60 million
 Videocon Mobile Services plans to invest Rs 800 crore (US$ 122.61 million) in Gujarat for opening over 500
towers and 150 exclusive outlets in 2013-14
 Reliance Communications (RCom) and Tata Teleservices Ltd (TTSL) have joined hands under a 2G intra-circle
roaming arrangement. Under the agreement, RCom will use 5,000 towers of TTSL across 14 GSM circles while
the latter will gain access to an equal number of towers in RCom's CDMA network to improve its reach
 Bharti Airtel has raised its stake to 51 per cent in four entities of Qualcomm's wireless broadband business in
India. In addition, the firm plans to launch an international fibre-optic cable link to boost internet speeds in
Bangladesh
Ratnesh et al. Page 84

Government Initiatives
The telecom tower provider industry has been granted the 'infrastructure' status, a move that will make tower providers
eligible for viability gap funding, higher limit on external commercial borrowings (ECBs), lower import duties and
exemptions on excise duty on telecom infrastructure equipment.
The Government of India's decision to allow 100 per cent foreign direct investment (FDI) in telecommunication sector
will enable foreign telecommunication companies to buy out their Indian partners. At present, India permits up to 74 per
cent FDI in the sector - 49 per cent through the automatic route and the rest after Foreign Investment Promotion Board
(FIPB) approval.
 The Government intends to make India a teleport hub, enabling it to become an up-linking/down-linking centre.
The initiative is expected to facilitate foreign investments, better technology and sustainable employment
opportunities in the country. The Government has recently given its nod to 74 per cent of FDI in DTH, IPTV,
and mobile TV
 Reliance Jio Infocomm (RJIL) has received an approval from the Department of Telecommunications (DoT) to
test the messaging feature on the fourth-generation long-term evolution (4G LTE) platform
 The new guidelines issued by the DoT according to which foreign entities can participate in the upcoming 2G
auctions directly and obtain a licence. The initiative is expected to make the upcoming auctions more attractive
to certain foreign players such as Telenor, which wanted to bid directly without an Indian partner in the
auctions. There will be a lock-in period of three years
Road Ahead
On back of ongoing investments into infrastructure, the country is projected to witness high penetration of internet,
broadband, and mobile subscribers in the near future. Various policy initiatives by the Indian government have led to a
complete transformation of the industry in the last decade. It has achieved a phenomenal growth during the last few years
and is poised to grow further.
The current scenario in Indian market has also given impetus to the information and communication technology (ICT)
exports and in turn it forms the most significant component of the internet's impact on the country’s GDP. Nevertheless
the private consumption and investment from private and public sector have greater potential to grow in the future, as per
a report by McKinsey and Co.
Exchange Rate Used: INR 1 = US$ 0.01533 as on September 8, 2013
Problem Areas:
 Customer retention
 Gaining new customers
 Customers’ loyalty
 Low profit margins
 Government regulation
 Rate of technology obsolescent
3.3 Problem Statement:
Consumer switching behavior across mobile service providers: Companies’ prime focus is to create loyal customers
and retaining current customer & get benefitted from them. Customers are switching to other MSP because they are not
satisfied. Consumers are not satisfied on account of marketing mix elements.
3.4 Objectives of study
This research consists of different objectives. They are as follows:
 To find out the consumers’ satisfaction towards the various services provided by telecom service providers.
 To find out the relationship between consumers’ loyalty, consumers’ foster recommendation and
consumers’ satisfaction with various services provided by the MSPs.
II. Literature Review

Debnath (2008), in his study, he explained that the prime focus of the service providers is to create a loyal customer base
by benchmarking their performances and retaining existing customers in order to benefit from their loyalty. With the
commencement of the economic liberalization in 1991, and with a view to expand and improve telecom infrastructure
through the participation of the private sector, the Government of India permitted foreign companies holding 51 percent
equity stake in joint ventures to manufacture telecom equipment in India. The Indian Government has announced a new
policy, which allows private firms to provide basic telephone services. There had been a monopoly of the state-owned
department of telecommunications. However, several companies are expected to benefit from the policy change.
Kalavani (2006) in their study analyzed that majority of the respondents have given favourable opinion towards
the services but some problems exist that deserve the attention of the service providers. They need to bridge the gap
between the services promised and services offered. The overall customers’ attitude towards cell phone services is that
they are satisfied with the existing services but still they want more services to be provided.
Kumar (2008), in their study titled “Customer Satisfaction and Discontentment vis-a-vis BSNL Landline
Service: A Study” analyzed that at present, services marketing plays a major role in the national economy. In the service
sector, telecom industry is the most active and attractive. Though the telecom industry is growing rapidly, India's telecom
density is less than the world's average telecom density as most of India's market is yet to be covered. This attracts
private operators to enter into the Indian telecom industry, which makes the Bharat Sanchar Nigam Limited (BSNL)
more alert to run its business and survive in the market.
Seth et al (2008), in their study titled “Managing the Customer Perceived Service Quality for Cellular Mobile
Telephone: an Empirical Investigation” analyzed that there is relative importance of service quality attributes and showed
that responsiveness is the most importance dimension followed by reliability, customer perceived network quality,
assurance, convenience, empathy and tangibles. This would enable the service providers to focus their resources in the
areas of importance. The research resulted in the development of a reliable and valid instrument for assessing customer
perceived service quality for cellular mobile services.
Fernandez (2007) in their study titled “Understanding Dynamics in an Evolving Industry: Case of Mobile VAS in
India” analyzed that Mobile Value Added Services (VAS) is a rising star in the fast growing wireless business. In the
paper, attempt is made at understanding the strategic dynamics of the evolving environment within which the Indian
players are operating, the challenges and structure of the same. Our literature and industry review indicates that - while
the value chain of industry is complicated yet one can observe the bipolar nature of bargaining powers between mobile
network operators and content aggregators.
Kalpana and Chinnadurai (2006) in their study titled “Promotional Strategies of Cellular Services: A Customer
Perspective” analyzed that the increasing competition and changing taste and preferences of the customer’s all over the
world are forcing companies to change their targeting strategies. The study revealed the customer attitude and their
satisfaction towards the cellular services in Coimbatore city. It was found that advertisement play a dominant role in
influencing the customers but most of the customers are of opinion that promotional strategies of cellular companies are
more sale oriented rather than customer oriented.
III. Research Methodology

5.1 Research model
Satisfaction with Basic Services:
- N/W coverage
- Call rates
- Roaming Facilities
Satisfaction with VASs:
- SMSs
- GPRS/Internet
- Caller tunes
- Various alerts
Consumer Loyalty
Satisfaction with Convenience:
Consumer Foster
- Availability of Customers Store
- Availability of Recharge Points/Bill Payment Options Recommendation
(Post-paid)
- Types of recharge vouchers/Plans Post-paid)
Dependent Variables
Satisfaction with Other Services:
- Customization
- Query Resolved by Customer Care
- Waiting time for having connected with representative
Independent Variables

5.2 Hypotheses:
H1: Consumer Loyalty towards MSP is significantly related to Satisfaction with Basic Services.
H2: Consumer Loyalty towards MSP is significantly related to Satisfaction with VASs.
H3: Consumer Loyalty towards MSP is significantly related to Satisfaction with Convenience.
H4: Consumer Loyalty towards MSP is significantly related to Satisfaction with Other services.
H5: Consumers’ foster recommendation is significantly related to Satisfaction with Basic services.
H6: Consumers’ foster recommendation is significantly related to Satisfaction with VASs.
H7: Consumers’ foster recommendation is significantly related to Satisfaction with Convenience.
H8: Consumers’ foster recommendation is significantly related to Satisfaction with Other services.
Chi-Square Tests:
Hypothesis 1:
Ho: Consumers’ satisfaction with Call rates of MSPs is not significantly related to Income of
consumers
H1: Consumers’ satisfaction with Call rates of MSPs is significantly related to Income of
consumers
Income and Call rates Cross Tabulation

Consumers’ satisfaction with Call rates of
MSPs
2 3 4 5 Total
1 7 4 10 11 32
Income 2 4 11 20 17 52
3 0 15 30 29 74
4 0 7 13 27 47
5 0 5 24 24 53
Total 11 42 97 108 258
Chi-Square Tests
Value df Significance
Pearson Chi-Square 42.542 12 .000
Likelihood Ratio 38.124 12 .000
Linear-by-Linear 14.559 1 .000
Association
N of Valid Cases 258
Here, significance value is 0.000 that is less than 0.05. So, null hypothesis is rejected and alternative hypothesis is
accepted. So, test shows that Consumers’ satisfaction with Call rates of MSPs is significantly related to Income of
consumers.
Hypothesis 2:
Ho: Consumers’ satisfaction with Availability of Customer stores is not significantly related to
Age of consumers
H1: Consumers’ satisfaction with Availability of Customer stores is significantly related to Age of
consumers
Age and Availability of Customer Stores Cross Tabulation

Availability of Customer Stores
1 2 3 4 5 Total
1 0 2 2 13 8 25
2 8 15 21 54 80 178
AGE
3 0 2 9 9 10 30
4 0 4 2 2 5 13
5 0 0 0 6 6 12
Total 8 23 34 84 109 258

Chi-Square Tests
Pearson Chi-Square 27.947a 16 .032
Linear-by-Linear .012 1 .912
Association
Here, significance value is 0.032 which is less than 0.05. So, null hypothesis is rejected and alternative hypothesis is
accepted. So, test shows that Consumers’ satisfaction with Availability of Customer stores is significantly related to Age
of consumers.
Hypothesis 3:
Ho: Consumers’ satisfaction with Caller Tunes services of MSPs is not significantly related to Age of
consumers
H1: Consumers’ satisfaction with Caller Tunes services of MSPs is significantly related to Age of
consumers
Caller Tunes and Age Cross Tabulation

AGE
Bel 20 20-30 30-40 40-50 Abo 50 Total
2 2 8 2 0 0 12
Caller 3 11 57 9 10 3 90
tunes 4 7 59 6 3 5 80
5 5 54 13 0 4 76
Total 25 178 30 13 12 258
Chi-Square Tests
Linear-by-Linear .051 1 .821
Association
Here, significance value is 0.087 which is greater than 0.05. So, here there is not enough evidence to reject null
hypothesis. So, test shows that Consumers’ satisfaction with Caller Tunes services of MSPs is not significantly related to
Age of consumers.
Hypothesis 4:
Ho: Type of Service opted by the consumers is not significantly related to Occupation of
consumers
H1: Type of Service opted by the consumers is significantly related to Occupation of consumers
Service and Occupation Cross Tabulation

Occupation
STU EMP BUS RET OTH Total
1 112 51 36 3 6 208
Service
2 20 10 20 0 0 50
Total 132 61 56 3 6 258
Chi-Square Tests
Linear-by-Linear 2.659 1 .103
Association

Here, significance value is 0.009 which is less than 0.05. So, null hypothesis is rejected and alternative hypothesis is
accepted. So, test shows that Type of Service opted by the consumers is significantly related to Occupation of consumers.
ANOVA Tests:
Hypothesis 5:
Ho: Means of Consumers’ satisfaction with Network Coverage of Vodafone, Airtel and Idea are
same (µvoda= µairtel= µidea)
H1: Means of Consumers’ satisfaction with Network Coverage of Vodafone, Airtel and Idea are
not same (µvoda≠ µairtel≠ µidea)
ANOVA
Sum of df Mean Square F Sig.
Squares
Between Groups 3.333 2 1.666 1.528 .220
Network
Within Groups 187.547 172 1.090
Coverage
Total 190.880 174
Here, significance value is 0.220 > 0.05. So, there is not enough evidence to reject null hypothesis. So, Null hypothesis is
accepted. So, test shows conclude that the means of Consumers’ satisfaction with Network Coverage of Vodafone, Airtel
and Idea are same (µvoda= µairtel= µidea). It means that, consumers’ satisfaction with network coverage provided by
Vodafone, Airtel and Idea are almost same.
Hypothesis 6:
Ho: Means of Consumers’ satisfaction with Convenience of Vodafone, Airtel and Idea are same
(µvoda= µairtel= µidea)
H1: Means of Consumers’ satisfaction with Convenience of Vodafone, Airtel and Idea are not
same (µvoda≠ µairtel≠ µidea)
ANOVA
Sum of df Mean Square F Sig.
Squares
Between Groups 10.315 2 5.157 10.235 .000
Convenience Within Groups 86.670 172 .504
Total 96.984 174
Here, significance value is 0.000 < 0.05. So, null hypothesis is rejected. So, alternative hypothesis is accepted & it shows
that the means of Consumers’ satisfaction with Convenience of Vodafone, Airtel and Idea are not same. It means that,
consumers’ satisfaction with convenience provided by Vodafone, Airtel and Idea are different. 6.7
IV. Research & Findings:

 Customers’ loyalty depends on Basic Services, Value Added Services and Convenience provided by the MSPs.
 Foster recommendation (positive word of mouth) by customers depends on Basic Services, Value Added
Services and Convenience provided by the MSPs.
 Customers’ loyalty and foster recommendation (positive word of mouth) are depending on mainly four factors,
i.e. Customized Value Added Services, Convenience, Network Coverage and Call Tariff.
 Mostly BSNL and Reliance users are using another MSP’s services along with their main MSP.
 Mostly Vodafone, Airtel and Idea users are using only one MSP’s services.
 Mostly Vodafone, Airtel and Idea users are satisfied with the service provided by their respective MSPs.
 Most of BSNL users are not satisfied with Network Coverage, VASs and Customer care services.
 Most of Reliance Mobile users are not satisfied with Network Coverage, Roaming Facilities and Customer care
services.
 Customers’ satisfaction with Call Rates is significantly related with Family Income of Users.
 Customers’ satisfaction with Availability of Customer Store is significantly related with Age of users.
 Type of service opted by users is significantly related with occupation of users.
 More number of users is using Pre-paid service than Post-paid service.
V. Conclusion:
We have studied the Indian telecom industry by concentrating on mobile service providers, and observed that
there is high competition among the players in the industry. All the players are giving special offers and schemes as per
the market conditions to maximize their subscriber base. Competition in telecom industry is heating up, now it’s time for
Indian telecom players to align up in the new dynamic business environment. Telco majors should think to launch the
product according to the needs of customers to satisfy them and make them brand loyal as very soon this blue ocean of

Indian telecom scenario will convert into Red Ocean where the loss of one is the gain of other. According to the results,
the most important determinant for consumers’ satisfaction and their foster recommendation (positive word of mouth) to
others are Customized VASs, Convenience, Network Coverage and Call tariff.
References:
 Debnath, Roma Mitra, “Benchmarking telecommunication service in India”, 2008
(http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=236E2B6B45CF101465D540FD4401AEB
9?
 Fernandez, Fronnie, “Understanding Dynamics in an Evolving Industry: Case of Mobile VAS in India”, 2007
(http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=2086527F0757A565F9A6CBAC8800F658
?
 Kumar, Kaliyamoorthy, “Influence of Demographic Variables on Marketing Strategies in the Competitive Scenario”,
2007
?
 Seth et, Etal, “Managing the Customer Perceived Service Quality for Cellular Mobile Telephone: an Empirical
Investigation”, 2008
?
8.1 Web-sites searched:

www.trai.gov
www.dot.gov

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International Journal of

Emerging Research in Management &Technology Research Article December

An Analytical Study of Customer Satisfaction influencing

Ratnesh et al. Page 84

II. Literature Review

III. Research Methodology

Satisfaction with Basic Services:

Satisfaction with VASs:

Satisfaction with Other Services:

Ratnesh et al. Page 86

Income and Call rates Cross Tabulation

Age and Availability of Customer Stores Cross Tabulation

Ratnesh et al. Page 87

Caller Tunes and Age Cross Tabulation

Service and Occupation Cross Tabulation

Ratnesh et al. Page 88

IV. Research & Findings:

Ratnesh et al. Page 89

8.1 Web-sites searched:

Ratnesh et al. Page 90

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