ANALYZING CUSTOMERS’ SWITCHING INTENTIONS IN THE

TELECOM SECTOR

(ABSTRACT)

Purpose: Mobile Number Portability (MNP) has not only affected customers’ behavioral patterns but
also increased competition among telecom operators. In this backdrop, the present study intends to
examine the relationship between customers’ switching intentions on the one hand and Attitude
Towards MNP, customer loyalty, and switching barriers on the other, after the introduction of MNP,
and also to investigate the impact of these intentions on actual switching or staying behavior of
customers.
Design/Methodology/Approach: To achieve this objective, data were collected from a sample of 260
telecom customers comprising university students, as younger people always need change in their life
and are normally observed to be adaptive about new and advanced offerings. Out of 260 customers,
about 242 completely filled in instruments were obtained.
Findings: The findings of the study reveal that customers’ switching intentions would largely depend
upon switching barriers perceived by the customers, i.e. if customers perceive barriers to switching,
then their intentions to switch from the current provider will be less and vice-versa. Further, the
results indicate that switching intentions predict both actual staying and switching behavior. This
implies that even if customers have intentions to switch from their current operator, they wouldn’t
switch because of switching barriers involved in terms of time, effort, and price.
Limitations: Our current understanding of switching barriers is limited to those involved in switching
from current service provider to new service provider. Future research can examine the barriers
associated with returning to the original provider and the effect on the decision to leave in the first
place, especially in case of contractual agreements such as BSNL.
Originality/Value: Customer switching is a common scenario in mobile telecommunication services.
Mobile service users in India had faced significant switching costs while switching from one service
provider to another because of losing the phone number known to friends, relatives, and business
associates. To lessen this switching barrier, Telecom Regulatory Authority of India (TRAI)
introduced the MNP service all over the country in January 2011, thereby allowing customers to keep
their mobile number when switching to another telecom operator. In this context, the present study
examined customers’ switching intentions in the telecom sector post-MNP. It will help practitioners
and telecom service providers in understanding the factors that affect customers’ switching intentions
so that switching can be prevented.

Key Words: Switching intentions; Mobile Number Portability; Actual switching; Actual staying.

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INTRODUCTION

In today’s dynamic and competitive environment, businesses rely on the customers’

acceptance of products, given the plethora of choices available to them. The role of the

telecommunication industry in an economy cannot be under emphasized. Specifically, mobile

telecommunication providers play a compelling role in strengthening the economy and

encouraging efficiency among a large number of subscribers across the country, because

mobile communication is the means via which many types of daily transactions and activities

are undertaken.

India’s Telecom Regulatory Authority (TRAI) posits that the telecommunications

sector is one of the technologically developed sectors of the country’s economy. During the

early stages of the market’s growth, the emphasis was on acquiring new subscribers but as the

market matured the emphasis on retaining current subscribers has increased, accordingly.

There is much evidence that recruiting new customers is more challenging and expensive

than retaining existing customers, notwithstanding industry sector type (Saeed, Hussain, &

Riaz, 2012).

Customer switching behavior has become normal practice and a critical issue facing

mobile service firms leading to relationship dissolution. In most service contexts, customer

switching is associated with negative consequences, such as declining market share and poor

profitability (Keaveney, 1995). To control switching, mobile service providers are

increasingly relying on contracts that lock-in customers for a pre-determined (Braff &

Laogue, 2004). Thus, customer switching intention is an interesting phenomenon as it can be

used to explain customers’ intentions and give insights for companies to maintain their

customers.

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 Given the preceding debate, it is important to understand the fundamental

determinants of customer switching behavior. Within the Indian mobile telephony sector the

recent introduction of MNP provides opportunities to switch service provider without

changing mobile number, thereby abolishing the inconvenience associated with a new

telephone number, which further provides opportunities for customers to choose the service

provider that best suits their telecom needs. The introduction of MNP reduces the cost

associated with switching networks. Moreover, a reduction in switching cost as a result of MNP

may affect price competition and the market share of network providers in the wireless/mobile

communication industry (Shi, Chiang, & Rhee, 2006). In addition, MNP eases the burden of

network switching and induces more competition, helps the new entrants, and benefits the

customers (Armstrong, 1997).

In this regard, Buehler, Dewenter, and Haucap (2006) evaluated the costs and benefits

of MNP, customer adoption of MNP, effects of MNP on call rates, and service quality. Given

that in recent times India has undergone a paradigm shift from being a socialist economy to

mixed or rather market-driven economy, the transitional phase invites rigorous in-depth

inquiry into the market-focused-performance link, as the economy envisages new business

concepts during the post-economic reforms. We contend that as a consequence due to

increased competitive intensity, market dynamism, and technological turbulence posed

during post-reforms era, accompanied with different internal environment, Indian firms have

become increasingly market orientation. India’s rapid expansion has attracted foreign direct

investment, thus an enhanced understanding of business strategies and practices of Indian

firms has also offered opportunities for the foreign firms to collaborate or compete with local

companies.

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 In this context, the present study here examines the relationship between Attitude

Towards MNP (ATTMNP), customer loyalty (CL), switching barriers (SB), and customers’

switching intentions (SI), and the impact of these switching intentions on actual switching

(ASW) and actual staying (AST) behavior of customers in telecom sector in an emerging

economies context, which has different economic, social, and cultural environments. In

meeting the study’s objective, this article develops as follows. The article starts by reviewing

the literature and presenting a rationale for the hypotheses development. The research design

and methodology then follows. We then present our findings and discuss those. The last parts

of the article deal with our conclusion and any limitations.

LITERATURE REVIEW

The review of pertinent literature reveals a limited examination of customers’

switching intentions in the telecom sector. For example, in a broader sense, Keaveney (1995)

demonstrated that core service failures, service encounter failures, failed employee responses

to service failures, and inconvenience are the main factors causing customers to switch

service providers. Further, Ganesh, Arnold, and Reynolds (2000) identified attitudinal and

behavioral factors that differentiate groups of customers, i.e. dissatisfied switchers, satisfied

switchers, and stayers, and revealed that dissatisfied switchers are the most satisfied

customers and are most likely to engage in active loyalty. In their synthesis Jones,

Mothersbaugh, and Beatty (2000) found that other than core service satisfaction,

interpersonal relationships, switching costs, and attractiveness are also important

determinants of retention, i.e. the effect of core service satisfaction on re-purchase intentions

is reduced when customers perceive high switching barriers. When analysing, the effects of

different types of switching costs on customers’ repeat purchase intentions revealed that

financial costs have the weakest impact on customers’ switching decisions, and procedural

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and relational costs have the strongest impact on customers’ switching decisions (Burnham,

Frels, & Mahajan, 2003).

In relation to mobile services, customers’ intentions to use these are significantly

affected by direct motivational influence of expressiveness, enjoyment, usefulness, and ease

of use as well as by attitude, normative pressure, and perceived control (Nysveen, Pedersen,

& Thorbjornsen, 2005). Factors such as poor quality, perceptions of low commitment or

interest in the customer, perceived unfair price, and an anger incident can determine

customers’ intentions to switch suppliers (Anton, Camarero, & Carrero, 2007). Moreover,

switching barriers and demographics significantly influence subscribers’ intentions to switch

(Shin & Kim, 2008). Khan, Ghouri, Siddqui, Shaikh, and Alam (2010) identified that ‘price’

has the greatest impact on switching behavior, followed by ‘distance’, ‘switching cost’,

‘service quality’, ‘reputation’, and ‘involuntary switching’. In the context of internet banking,

perceived convenience, perceived risk, perceived security, and prior internet knowledge

considerably influence customers’ intentions to use online banking services (Nascri, 2011).

As the study included limited factors, future research can incorporate other factors, i.e.

perceived ease of use, perceived usefulness, self-efficiency, culture, trust, etc. There is

evidence (see John, 2011) that trustworthiness, relationship image, value-added services, and

inconvenience in switching are the main factors that influence the loyalty of customers.

Within the mobile telephone sector, Durukan, Bozaci, and Dogan (2011) found that

there is no relationship between ‘the awareness of MNP’ and ‘switching intention’. However,

there is a positive and significant relationship between ‘MNP application satisfaction’ and

‘switching intention.’ In other work, Chebat, Davidow, and Borges (2011) established two

types of switching costs affecting exit behavior, i.e. continuity costs and learning costs, while

Kansra and Kumar (2012) identified that past experience with the brand, better features, large

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price difference, and quality are the important factors affecting customers’ switching

intentions from a particular brand. Kansra and Kumar’s study examined a limited range of

factors that underpin switching, thus future research can be pursued by including other

factors, i.e. switching cost, trust, commitment, image, etc. Lee, Yuan, and Oncharean (2012)

investigated the role of TAM including switching benefits and switching costs in order to

verify the factors affecting attitudes toward switching from physical book to e-book and

found that computer self-efficacy, switching benefits, and switching costs significantly

influence attitudes toward switching.

Adding to prior studies, the present study contributes to the literature by analyzing the

direct relationship between Attitude Towards MNP (perceived ease of use and perceived

usefulness of MNP), customer loyalty (service quality, satisfaction, trust, commitment),

switching barriers (price, image, switching cost) and customers’ switching intentions after the

introduction of MNP, as MNP provides more opportunities for customers to switch their

service provider without changing their contact number. In addition, the study examines the

impact of customers’ switching intentions on actual switching and actual staying, i.e. if

customers have intentions to switch, whether they would actually switch in future or remain

with the same operator. Hence, we propose that even if customers are not satisfied with the

quality of services being offered and prices being charged, they may not switch their current

service provider due to other significant factors, such as lack of complete awareness

regarding the program, and also the complicated procedure introduced by TRAI in switching

the service provider. Thus, given a chance the customers would not switch the service

provider even if they are not content with the services extended to them.

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 In this regard, the key research question addressed by the study presented here is:

when the switching barriers are low, would a customer stay with the current service provider

despite being dissatisfied with its services?

HYPOTHESES DEVELOPMENT

Attitude towards MNP (ATTMNP) refers to the degree to which an individual,

generally, has a favorable or unfavorable evaluation or appraisal of the MNP policy (Ajzen,

1991). Perceived Usefulness of MNP (PUMNP) is the degree to which a person believes that

transferring their mobile number to another mobile network operator will enhance their

personal wellbeing or benefit the society as a whole (Legris, Ingham, & Collerette, 2003).

Whereas, perceived ease of use is the customer’s perception of the sacrifices they have to

make in order to start and complete the process of porting their mobile numbers to another

network (Gans & King, 2000; Wright, 2002). These sacrifices may involve porting costs

(monetary as well non-monetary) such as time, effort, and money for making calls to or

transport fare to go to the designated firm’s office to complete the porting process. These

perceived porting costs are likely to cause favorable or unfavorable attitudes towards MNP

adoption by customers.

Further, Nimako, Benjamin, and Mensah (2014) assured that perceived usefulness and

perceived ease of use are the factors influencing user acceptance of technology, which

indicate that users’ actual or behavioral acceptance is principally determined by behavioral

intentions to use the technology in question and behavioral intentions are in turn influenced

by the users’ attitude towards technology. Therefore, customers’ perceptions towards

usefulness of MNP is expected to induce the attitude of customers towards MNP policy.

Also, earlier studies have established that attitude is a strong predictor of intention to perform

or act (Liu, Liao, & Peng, 2005; Park, 2009). Therefore, it is expected that customers’
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favorable or unfavorable ATTMNP can affect their intention to switch positively or

negatively. Therefore the following hypothesis is put forward:

H1: There is a negative relationship between Attitude towards MNP (ATTMNP) adoption and

switching intentions.

Customer loyalty is a customer’s repeat purchase intention to some specific product or

service in the future (Jones & Sasser, 1995) and making the individual feel committed as long

as the benefits are meaningful to them (Grossman, 1998). This customer loyalty can be

categorized into three parts. First is the re-buy intention, the second is primary level behavior

and the third is the secondary level behavior (Jones & Sasser, 1995). A customer’s re-buy

intention relates to the future purchase intention of the customer to re-purchase the desired

product or service. Secondary level means the customer physically visits the place to

purchase the product. While in the third level, the customer deliberately recommends the

product or service to the people around them and, thus, exhibits the loyalty through human

interactions. Customer satisfaction has a significant impact on re-purchase intentions in a

wide range of services (Oliver & Swan, 1989; Sharma & Patterson, 2000). Further, Liang,

Wang, and Farquhar (2009) provided empirical evidence that customer satisfaction is

significantly related to behavioral loyalty in financial service industries.

Trust is a customer feeling that the seller will fulfill promises (Sekhon, Ennew,

Kharouf, & Devlin, 2014). It is also an antecedent of customers’ future behavioral intentions

(Garbarino & Johnson, 1999). In the context of hair styling and auto repair services, Bansal,

Taylor, and James (2005) observed a negative relationship between satisfaction, trust,

commitment, and customers’ switching of service provider with commitment being a strong

factor that enhances staying intentions (Wetzels, Ruyter, & Birgelen, 1998). As well as

commitment, there is a relationship between a customer’s trust in a brand and their loyalty to

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that brand (Lau & Lee, 1999), with trust having a significant positive impact on customer

retention (Ranaweera & Prabhu, 2003). In the case of our research domain, Adjei and

Denanyoh (2014) revealed that call rate/quality, network coverage, and sales promotion

significantly influence customer loyalty. Customer satisfaction, trust, and loyalty are

consistently among some of the predictors of customer intention to re-purchase (Hong &

Cho, 2011). Customer satisfaction is often considered to be an important determinant of re-

purchase intention (Liang, Wang, & Farquhar, 2009) and customer loyalty (Eggert & Ulaga,

2002). Further, trust also directly and positively affects customer loyalty (Chiou, 2004) and

customer loyalty is an important and significant determinant for re-purchase intention

(Eisingerich & Bell, 2006). Therefore, rooted in the preceding debate we hypothesize that:

H2: There is a negative relationship between customer loyalty and switching intentions.

Switching barriers are the factors that make it difficult for customers to change their

service provider, and if these barriers are high, customers are likely to remain with the same

service provider to avoid potential costs and losses, even if they are not satisfied (Jones et al.,

2000). The factors that can increase switching barriers are search costs, transaction costs,

learning costs, loss of loyal customer discounts, loss of established habits and relationships,

and risk of the unknown (Liu, Wan, & Yang, 2010).The positive impact of switching barriers

on re-purchase intention has been widely confirmed (Colgate & Lang, 2001). Research on

mobile services showed that switching barriers significantly affect customer retention and

customer loyalty (Kim, Park, & Jeong, 2004).

Kim et al. (2004) contend that the variables constituting switching barriers are

switching costs and attractiveness of alternatives. Attractiveness of alternatives means the

image and reputation of the new service provider, which is expected to be superior or more

suitable than that of the existing provider. Attractiveness of alternative provider is intimately

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linked to service differentiation and industrial organization. If a company offers differentiated

services that are difficult for a competitor to match or to provide with equivalents, or if few

alternative competitors exist in the market, customers tend to remain with the existing

provider (Bendapudi & Berry, 1997). Evidence exists that switching barriers have direct

effects on customer retention and adjust the relationship between customer satisfaction and

customer retention (Lee, Lee, & Feick, 2001). Further, switching costs are the costs that

customers associate with the process of switching from one supplier to another and drive

customers’ intentions to stay with their current service provider (Burnham et al., 2003).

If switching costs are low, dissatisfaction with the service quality, price, or firm will

motivate the intention to switch suppliers (Bansal et al., 2005) and vice-versa. Anton et al.

(2007) also found that switching cost is indirectly related to customers’ intentions to switch

via service quality, commitment, price, and anger incident. Further, Bansal and Taylor (1999)

revealed a direct relationship between switching costs and customers’ switching intentions.

Shin and Kim (2008) indicated that switching barriers are the key factors in subscribers’

switching intentions. In addition, reputation is a key ingredient to retain customers in the

services sector (Muffato & Panizzolo, 1995). In this regard, Wang, Lo, and Hui (2003)

revealed that product quality and services produce benefits not only by lowering costs, but

also by increasing competitiveness through the establishment of a good reputation and

attraction and retention of customers. When customers are dissatisfied with the value for

money or perceive the price to be unfair, their intentions are stronger to switch the supplier

(Campbell, 1999). Keaveney (1995) also suggested that customers voluntarily switch

suppliers because of their personal dissatisfaction with the prices paid. This dissatisfaction

arises when the customers perceive the price to be unfair or excessively higher than

alternative options. He also mentioned that in markets with switching costs, the rational

customer will not switch to the supplier offering the lowest price if the switching costs

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outweigh the price differential between their current supplier and the new one. If this

happens, the customer is said to be locked-in to the current supplier. Switching costs often do

raise average prices in competitive markets compared with competitive markets without

switching costs. Hence, given the preceding debate, it leads to the formulation of the

following hypothesis:

H3: There is a negative relationship between customers’ switching intentions and switching

barriers.

A critical factor in Theory of Planned Behavior (TPB) is an individual’s intention to

perform a particular behavior. Behavioral intentions are considered to be a critical factor in

explaining customers’ actual behavior, where an individual’s strong intention to perform

certain behavior is likely to result in its performance (Ajzen, 1991). The evidence for

prediction of behavior from intentions can be found in the applications of Theory of

Reasoned Action (TRA) and TPB in several behavioral contexts (Ajzen & Driver, 1992; East,

1993). Ajzen and Fishbein (1980) insisted that most individual’s behavior is predictably

based on their intentions. Zeithaml, Berry, and Parasuraman (1996) demonstrated that a

favorable intention to switch predicts actual switching. Bansal and Taylor (1999) revealed

that the stronger the customers’ intention to switch the service provider, the more likely they

are to engage in switching behavior. Hence:

H4a: There is a positive relationship between customers’ switching intentions and their

actual switching.

Changing customer preferences and spending patterns influence customers’ behavior.

For example, Beckett, Hewer, and Howcroft (2000) found that bank customers transfer their

account to alternative providers because of lifestyle changes, such as marriage or moving

house. Abratt and Russel (1999) postulate that price followed by trust and service quality are
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the most important criteria in the selection of a private bank. In contrast, Riggall (1980)

confirmed that the convenience factor is most important for bank customers, followed by

friends’ suggestions and low service charges. Zeithaml et al. (1996) demonstrated that there

is a positive relationship between commitment and behavioral intentions, which implies

greater chances of actual staying behavior. Moreover, consequences of relationship efforts on

customers’ behavioral intentions can be viewed as signals of retention or defection (Liang &

Wang, 2007). Thus:

H4b: There is a negative relationship between customers’ switching intentions and their

actual staying.

RESEARCH DESIGN and METHODOLOGY

The objective of this study is to examine the customers’ switching intentions from one

mobile service provider to another with the introduction of MNP, and to meet the objectives

the data were collected through structured instrument. The measures in the instrument

covering almost all aspects of customers’ switching intentions in mobile telecommunication

services were extracted from different sources, like discussion with customers, experts in the

area of marketing and also the review of relevant literature (Table 1).

--------------------------------------------------

Insert Table 1 about here

--------------------------------------------------

To enhance the proposed model’s validity, pretesting was conducted before the main

survey. For pretesting, students of a North Indian university were contacted on a convenience

basis. After analysing the data collected through the pilot survey, it was established that one

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item of switching cost, i.e. “You don’t know what you will end up having to deal with while

switching to a new service provider”, was irrelevant and, therefore, not considered for the

final survey. Thereafter, the instrument was finalised, which consisted of demographic profile,

general information, and various aspects of customer switching intentions. A 5-point Likert

scale ranging from ‘strongly agree’ (5) to ‘strongly disagree’ (1) was employed for each item.

For the final survey, the respondents were the regular post-graduate students of one of

the northern Indian universities, with students from different geographical regions. Students

studying in this university belong to different communities and cultures, and possess varied

social status. Moreover, parents of some of these students are working on Central Government

jobs, where the family moves from one state to another due to transfers and postings in

different states, regions, etc.

As per the 2011 census, India has ~500 million Indians under the age of 25. It is sage

to assume that young Indians are driving purchases in categories such as mobile phones,

fashion, accessories, food, etc. and are willing to experiment and change habits. Therefore, the

present study examines the customers’ switching intentions after MNP by selecting students

from a northern Indian university. The primary reason behind selecting students as the focus

of the study is that the student group is homogeneous and so reduces the impact of non-

controllable confounding variables, and students’ consumption behaviors and perceptions

resemble those of typical users (Bhukya & Singh, 2013). Moreover, the younger generation

tends to exhibit a positive disposition towards adoption of a new innovation (Schiffman &

Kanuk, 2003) and views the technological changes and complexities more optimistically than

the elderly segment (Wotruba & Pribova, 1995). The early adopters of any new

technology/service are typically youngsters on account of its utilitarian and hedonistic benefits

(Bourdeau, Chebat, & Couturier, 2002).

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 Taking the prior discussion together, preferring new and innovative products is the core

attribute associated with a younger population (Stanton, Etzel, & Walker, 1994). These students

were selected after obtaining department-wise list from the concerned section of the university

and then all departments were arranged in an alphabetical order. According to the list, the total

number of regular students was 2,804.

The sample size was calculated using the formula provided by Burns and Bush (2007,

p. 378) and the sample size consequently obtained was 260 1. Thereafter, the students from

each department were selected proportionately, i.e. total students in the departments sample

size/total students in the university, i.e. 2,804. Moreover, a proportionate sampling technique

was used, so that each element of the population had an equal chance of selection (Verma,

1991). This provided us with the number of students to be contacted from each department.

For determining the students to be contacted from each department, a 2-Digit

abridged random number table (Morris, 2003) was used. This table was used because the

number of students in each department was less than 100, thus containing two digits only.

Moreover, random number table was much more effective than manually selecting the

random samples (with dice, cards, etc.).

Using a random number table, we prepared a list of Roll No. of the students to be

contacted from each department. Out of 260 students personally approached, 242 properly

filled in instruments were returned, thus providing a response rate of 93.07%; the high

response rate percent was due to in-person administration and collection of instruments.

RESEARCH FINDINGS

1
n=S2 Z2/e2, where ‘n’ is sample size, S2/variance= 0.169, ‘e’ is the level of precision or margin of
error = 5%, Statistical confidence: 95%, and Z= 1.96. S2/variance of 0.169 was obtained from the
results of the pilot study.
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 A preliminary analysis of the data revealed that the final sample consists of 231

students (after detecting and removing outliers), out of which 36% were males and 64% were

females, 29% students were from pure sciences and 71% from non sciences, 43% passed BA,

37% qualified B. Sc and 20% did B. Com (Table 2). The reasons given for being attached to

their current service provider include better network coverage, low call rates, low internet

charges, etc. Of the sample, 88% of students have prepaid connection and 44% have already

switched from their previous service provider. In addition, 16% of respondents switched from

one provider to their current service provider and those who switched, only 5% switched with

MNP and 40% without MNP. When asked about the reasons for not adopting MNP, 28%

expressed unavailability at that time, 17% felt that the MNP process is time consuming and

11% did not adopt because of inconvenience caused by MNP and lack of information about

it. Further, 29% of telecom users want to switch their current service provider in the future

and they intend to subscribe the services of BSNL (a government organisation). Most of the

respondents (71%) do not want to switch their current operator just because they feel content

with the present services, call rates, network coverage, etc.

--------------------------------------------------

Insert Table 2 about here

--------------------------------------------------

The present study was cross sectional in nature as the data related to independent and

dependent constructs that were collected from the same set of respondents, so there is a

chance of common method bias to occur in the study. Therefore, to deal with the issue of

common method bias, Harman’s single factor and correlational approach was followed

(Podsakoff, MacKenzie, Lee, & Podsakoff, 2003). Harman’s single factor test using principal

component factoring was conducted in order to check common method bias and the results
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reflect that only 32.54% of the total variance is explained by a single factor, which is less than

the threshold for common method variance (50%) to be an issue (Podsakoff et al., 2003).

In addition to the above approach, correlation matrix (Podsakoff et al. 2003) was also

used for checking the issue of common method bias. On the basis of correlation matrix, it has

been found that correlation between various constructs is below 0.90, thus signifying that

common method bias was not an issue for the present study (Table 3). The Pearson

correlation between control variables (i.e. gender, state, and semester) and other constructs of

the study were found to be less than .20 (Table 3), thus depicting that gender, state, and

semester, and ATTMNP, SB, CL, SI, ASW and AST, are not related with each other in any

manner. The descriptive statistics are provided in Table 4.

--------------------------------------------------

Insert Tables 3 & 4 about here

--------------------------------------------------

Further, validity and reliability of the measures were assessed through factor loadings

(SRW) and variance extracted. The construct validity of each construct was calculated as it

directly affects the substantive models being tested (Bagozzi & Edwards, 1998). Factor

loadings above .50 are generally considered the minimal level at which convergent validity

could be suggested (Bagozzi & Yi, 1988) and in the present study, convergent validity of

each construct gets established as the majority of the loadings are above .50 (Table 5).

Another criterion being used for assessing convergent validity is average variance extracted

(AVE), which came out to be above .50 (Table 5). In addition to assessing validity of the

measures, reliability, i.e. internal consistency for each construct (Fornell & Larcker, 1981),

was calculated using SRW or factor loadings obtained from the results of CFA. The

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reliability was assessed through construct or composite reliability (CR), which came out to be

above .90, thus indicating the internal consistency of the data (Table 5). Discriminant validity

can be statistically demonstrated using a Chi-square difference test to each of the possible

pairs of the measurement scales. Discriminant validity is the extent to which a construct is

truly distinct from other constructs. The results of the test reveal that for all the pairs of

constructs, the Chi-square values are significant at .05 level of significance (χ 2> 3.84, df =1),

thereby indicating uniqueness in all possible pairs of constructs (Ahire, Golhar, & Waller,

1996).

--------------------------------------------------

Insert Table 5 about here

--------------------------------------------------

Thereafter, CFA was conducted through AMOS (16.0) using maximum-likelihood

estimation (Joreskog & Sorbom, 1993) on the determinants (Attitude towards MNP,

Customer Loyalty, and Switching Barriers) and outcomes of customers’ switching intentions

(Actual Switching and Actual Staying) (Table 6). In order to refine the scales or to deal with

the issue of formativeness of some measures/constructs, we conducted separate first order

CFA for SIs, ASW, and AST and second order CFA for ATTMNP, CL and SB as all the

measures are second order latent constructs which are further explained by other sub-

constructs. For the assessment of the models, multiple fit indices are reported, i.e. χ 2/df, GFI,

AGFI, CFI, NFI, TLI, RMR, and RMSEA. All these indices reveal that measurement models

are reasonably consistent with the data, i.e. χ2/df less than 5.00; GFI, AGFI, CFI, NFI, and

TLI more than .90; RMR and RMSEA less than .08 (Taylor & Todd, 1995; Bentler, 1990)

(Table 6).

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 --------------------------------------------------

Insert Table 6 about here

--------------------------------------------------

To test the hypothesized relationships in the model (Figure 1), SEM was conducted

using AMOS (16.0). The SEM was examined to test the hypotheses depicting relationships

among constructs. It becomes clear from SEM results that there is a negative relationship

between customers’ switching intentions and Attitude towards MNP (ATTMNP) (β= -.45, p<

.05), hence H1 is accepted. Further, the structural model depicted that customers’ switching

intentions are negatively affected by customer loyalty (β = -.49, p<.05). Hence, H2 is proved.

Again, it is depicted that customers’ switching intentions are negatively affected by customer

loyalty (β =.46, p< .05), which leads to the acceptance of H3.

--------------------------------------------------

Insert Figure 1 about here

--------------------------------------------------

The direct effect of customers’ switching intentions on actual switching behavior of

customers is also significant and positive (β =.46, p< .05), which leads to the acceptance of

H4a. Again, it is clear from SEM analysis that customers’ switching intentions negatively

influence actual staying behavior of customers (β= -.46, p< .05), hence H4b stands accepted.

Following the SEM we examined that overall fit: the goodness of fit index

(GFI=.989), adjusted goodness of fit index (AGFI=.920), root mean square error of

approximation (RMSEA=.086), and root mean squared residual (RMR=.013) are within the

acceptable range. The other indices like normed-fit index (NFI), comparative fit index (CFI),
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and Tucker-Lewis index (TLI) are all above .90. As these values are above .90 it can be

concluded that the model exhibits a reasonable fit to the data (Table 7).

Further, to check the robustness of our SEM model, various alternative models were

tested and compared. The results indicate that the proposed model signifies the good fit as

compared to other tested models (Table 7). Therefore, the results of this multi-modeling

approach prove the robustness of the proposed model in contrast to other models (Rauch,

Wiklund, Lumpkin, & Frese, 2009; Slevin & Terjesen, 2011).

--------------------------------------------------

Insert Table 7 about here

--------------------------------------------------

DISCUSSION

The availability of a number of subscriber options for customers and varied tariff rates

of each player, motivate customers to switch between service providers. MNP permits

customers to switch operator without changing their mobile telephone number. The present

study focused on the relationship between ATTMNP, CL, SB and SI, and also the

relationship between switching intentions and actual switching or staying behavior of

customers. The results revealed that there is a negative relationship between ATTMNP and

customers’ switching intentions hence signifying that customers perceive MNP policy as

difficult to use, i.e. unfavorable and therefore they do not intend to switch their service

provider (Nysveen et al., 2005). Further, the results demonstrated that customer’ switching

intentions are negatively influenced by their loyalty. Moreover, in this regard, Hong and Cho

(2011) and Sirdeshmukh, Singh, and Sabol (2002) evidenced that loyalty is consistently

among some of the predictors of customers’ intention to re-purchase. In addition, negative

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relationships also occur between switching barriers (SB) and customers’ switching intentions

(SI), which reflects that if customers perceive switching barriers to be high, their intention to

leave the current provider is low and vice-versa. In relation to this, Nguyen and Leblanc

(2001) contend that customers are more inclined to purchase the services from companies

whom they perceive as having favorable reputations and offering satisfactory prices, i.e. low

prices as compared to their competitors. In other words, when customers are dissatisfied with

value for money or perceive the price to be unfair, their intentions will be stronger to switch

the service provider. Further, if switching costs are low, customers’ intentions to switch their

service providers will be high. Switching costs are those costs that customers associate with

the process of switching from one service provider to another (Burnham et al., 2003; Wathne,

Biong, & Heide, 2001). Further, there is evidence that switching barriers have direct effects

on customer retention and adjust the relationship between customer satisfaction and customer

retention (Lee et al., 2001).

The results of this study demonstrate that customers’ intentions to switch positively

affect their actual switching. This implies that if customers have strong intentions to leave

their service provider, maybe because of poor service quality, unfavorable prices, low

commitment, etc., then they are likely to switch supplier. Therefore, the sequences of

relationship efforts on customers’ behavioral intentions can be viewed as signals of retention

or defection (Liang & Wang, 2007). Also, it was found that customer switching intentions

negatively affect their actual staying, which signifies that if customers are very much satisfied

with the quality and pricing of services, their intention to leave the current operator is low.

Also, when there are few viable alternatives or perceived benefit of switching service provider

is low, then customers’ intentions to switch and attractiveness of alternative are reduced, and

customers are likely to stay in service (Cheong, Park, & Hwang, 2004).

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 Further, the present study reveals that after MNP implementation, customers’

switching intentions remain the same and not changed, as they are either not fully aware of

the MNP application or perceive lots of paperwork involved in the MNP process, i.e. their

attitude towards MNP adoption is unfavorable. Also, customers’ switching intentions don’t

change because of satisfactory services provided by their current service provider, lack of

alternatives, etc. However, customers’ switching intentions would largely depend upon

switching barriers (SRW= -.52) as perceived by the customers, i.e. if customers perceive

barriers to be high in switching then their intentions to switch the current service provider

will be low and vice-versa. Also, the results indicate that switching intentions explain both

actual switching (SRW= .46) and staying behavior (SRW= -.46) of customers. This indicates

that if customers are not satisfied with the services of their current service provider, their

intentions to leave that service provider increase and, in future (if switching barriers, i.e.

switching costs, are low), they will switch from that service provider to another and vice-

versa. This is consistent with the findings of Chuang (2011) who found that switching cost

(switching barrier) is the most significant factor for retaining the subscribers. Thus, it can be

concluded that with the introduction of MNP, customers’ intentions to switch their telecom

service provider don’t change and remain the same, as a result of improper implementation of

MNP.

CONCLUSION and IMPLICATIONS

The current study proposes and tests a framework for understanding the direct

relationship between ATTMNP, CL, SB and SIs after MNP and the impact of these switching

intentions on ASW and AST behavior of customers. The present study extends existing

research related to customers’ switching intentions after MNP in the following ways. First,

we examine the direct relationship between ATTMNP, CL, SB and SIs after MNP

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introduction in India and revealed that negative relationships exist between these, which

implies that if customers’ attitudes towards MNP adoption are unfavorable. Second, the study

observes direct relationships between customers’ switching intentions and ASW, finding that

SIs are positively related with actual switching. Finally, the study moves beyond prior

research (Shin & Kim, 2008) by looking at the impact of customers’ switching intentions on

actual staying behavior of customers’ after the introduction of MNP in India. The study’s

results reflect that customers’ switching intentions are negatively related with actual staying

behavior of customers. This implies that if customers have no intentions to switch their

current service provider then they remain with the same provider. Therefore, operators who

wish to retain their existing customers should create barriers in the form of

acceptance/affordable call rates or prices of services, as well as better network coverage.

Government as well as telecom operators should organise programs, seminars,

conferences, information advertisements, and other communication activities about the

details of the MNP system and properly define the stages in the porting process. Further, the

results reveal that customers’ switching intentions and ATTMNP (Attitude towards MNP),

CL (Customer Loyalty), and SB (Switching Barriers) are negatively related to each other

(Ping, 1993; Hung, Huang, & Chen, 2003; Davis, 1989; Bansal & Taylor, 2002). Therefore,

the service providers should focus on these determinants in order to prevent customers from

switching. However, customers’ switching intentions would largely depend upon switching

barriers (SRW= -.52) as perceived by the customers, i.e. if customers perceive barriers to be

high in switching then their intentions to switch the current service provider will be low and

vice-versa. Therefore, it is recommended that service providers should create switching

barriers for retaining their existing customers by providing quality services (better network

coverage) at affordable prices, which would further enhance the service provider’s image.

Therefore, service providers in order to preserve customers’ staying behavior should build

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interpersonal relationships, effectively recognise customers’ problems and deliver good

quality core service, as retaining existing customers is easier than finding new customers for

their services.

LIMITATIONS and FUTURE RESEARCH

The present study is cross sectional in nature. Therefore, future research should follow

longitudinal study. Further, the switching cost in the present study is limited to those costs

involved in switching from current service provider to new service provider. Future research

should examine how costs associated with returning to the original provider affect the

decision to leave in the first place, especially in case of contractual agreements such as

BSNL.

Moreover, the results of the study reveal that customers do not favor MNP for

switching their operators because of poor approach of companies in implementing the MNP

policy. Therefore, future research should examine the reasons from the service providers’

side of not implementing the MNP approach properly.

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 Figure 1: Structural Model of the Determinants of Customers’ Switching Intentions

H1: (β= -0.45***)

Attitude H4a: (β= 0.46***)
towards MNP
Actual
H2: (β= -0.49***) Switching

Customer Switching
Loyalty Intentions

H3: (β= -0.52***)

Actual
Switching H4b: (β= -0.46***) Staying
Barriers

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 Table 1: Generation of Scale Items
Construct Sub-constructs No. of items Sources

Attitude Towards Perceived Ease of Use 5 Davis et al. (1989); Nysveen et al.
MNP (ATTMNP) of MNP (2005).

Perceived Usefulness 4 Davis et al. (1989); Nysveen et al.

of MNP (2005).

Customer Loyalty Service Quality 11 Crosby et al. (1990); Taylor and

(CL) Baker (1994); Sharma and
Petterson (1999); Hartline and
Ferrell (1996).
Satisfaction 12 Oliver and Swan (1989);
Goodwin and Ross (1992).

Trust 14 Larzelere and Huston (1980);

Morgan and Hunt (1994).

Commitment 9 Lassar et al. (1995); Garbarino

and Johnson (1990); Kumar et al.
(1995); Verhoef et al. (2002).
Switching Price 11 Gerpott et al. (2001); Bansal et
Barriers (SB) al. (2005);
Reputation & Image 12 Aaker and Keller (1990); Smith
and Park (1992); Loken and John
(1993); Gupta (2002).
Switching Costs 15 Burnham et al. (2003); Jones et
al. (2002).
Switching - 6
Intentions (SI)
Bansal and Taylor (1999).

Actual Switching - 8 Gerrard and Cunningham (2004);

(ASW) Hess et al. (2003); Grace and
O’Cass (2003).

Actual Staying - 9 Colgate and Lang (2001);

(AST) Ganesh et al. (2000); Keaveney
(1995).

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 Table 2: Demographic Profile of Respondents

Respondent Profile Number Percentage

Gender

Male 84 36%

Female 147 64%

Department

Sciences 67 29%

Non-sciences 164 71%

Semester

Ist 113 49%

IIIrd 104 45%

Vth 14 6%
Previous Qualification

BA 99 43%

B. Sc 85 37%

B. Com 30 13%

Others 17 7%

Father’s Occupation

Government Employee 111 48%

Businessman 95 41%

Ex-serviceman 25 11%

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 Table 3: Correlation Matrix
Constructs Gender Semester State ATTMNP CL SB SI ASW AST

Gender 1

Semester -.064 1

State .051 .038 1

ATTMNP .094 -.091 .075 1

CL .101 -.104 .076 .465** 1

SB .086 -.026 .072 .423** .510** 1

SI -.166* .002 -.047 -.430** -.475** -.502** 1

ASW .035 .069 .083 .317** .458** .439** -.484** 1

AST .171** -.092 .065 .427** .426** .435** -.462** .382** 1

* Correlation is significant at the 0.05 level (2-tailed).

**Correlation is significant at the 0.01 level (2-tailed).

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 Table 4: Summary of Mean, Standard Deviation, Factor Loading, Communality, and
Cronbach’s Alpha
Constructs Sub-constructs Mean Standard Factor Communality Alpha
Deviation Loadings
Customer Service Quality 3.39 1.19 .79 .47 0.923
Loyalty Relational Quality 3.32 1.21 .77 .59 0.921
Satisfaction
Relational Quality Trust 3.34 1.20 .77 .60 0.938

Relational Quality 3.22 1.23 .81 .68 0.825

commitment
Switching Pricing 3.37 1.24 .72 .61 0.817
Barriers Reputation and Image 3.35 1.18 .74 .55 0.896

Switching Cost 3.46 1.22 .78 .65 0.746

Attitude Perceived Ease of Use of 3.39 1.14 .81 .65 0.865
Towards MNP
MNP Perceived Usefulness of 3.32 1.25 .85 .73 0.811
MNP
Switching Intentions 3.21 1.22 .80 .64 0.885

Actual Switching 2.82 1.22 .77 .59 0.762

Actual Staying 3.33 1.23 .78 .62 0.895

Table 5: Reliability and Validity of Measurement Models

Dimensions SRW AVE CR

ATTMNP .76 .59 .98

CL .75 .57 .99

SB .69 .48 .99

SI .64 .56 .98

ASW .67 .45 .94

AST .74 .55 .98

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 Table 6: Results of Confirmatory Factor Analysis

Constructs CMIN/ GFI AGFI RMR RMSEA NFI TLI CFI

df
ATTMNP 1.815 .963 .934 .042 .060 .966 .978 .984
CL 1.762 .812 .783 .057 .058 .783 .853 .923
SB 1.708 .880 .847 .064 .055 .877 .934 .944
SI 2.184 .979 .938 .036 .072 .978 .974 .988
ASW 1.594 .993 .967 .032 .051 .986 .984 .995
AST 1.088 .986 .967 .033 .020 .986 .998 .999

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 Table 7: Fit Indices of Various Competing Models

MODELS CMIN/ GFI AGFI RMR RMSEA NFI TLI CFI

df

Model 1-Only ASW as 3.430 .904 .841 .066 .103 .960 .961 .971
dependent variable

Model 2-Only AST as 4.692 .885 .808 .034 .127 .951 .947 .961
dependent variable

Model 3-ATTMNP & SB 8.467 .877 .770 .148 .180 .924 .905 .932
as independent variables

Model 4-CL & SB as 5.115 .889 .816 .102 .134 .945 .940 .955
independent variables

Model 5-ATTMNP & CL 5.996 .886 .795 .119 .147 .946 .936 .954
as independent variables

Model 6-Effects of 26.443 .644 .441 .503 .333 .674 .590 .681
ATTMNP, CL & SB on
ASW

Model 7-Effects ATTMNP, 28.545 .617 .398 .508 .346 .684 .602 .690
CL & SB on AST

Model 8- Formative first 20.597 .885 .244 .141 .292 .937 .666 .939
order

Model 9- Formative second 20 .888 .261 .129 .287 .939 .676 .941
order

Model 10-Model for 13.817 .788 .667 .476 .236 .823 .781 .833
endogeneity

Model 11- 2.697 .989 .920 .013 .086 .994 .981 .996
Theoretical/Proposed
Model

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