An analysis of switching behavior in the Thai cellular market

Abstract

PurposeThe purpose of this paper is to explain the determinant factors of switching behavior in the Thai cellular market before the Mobile Number Portability (MNP) policy is implemented.Design/methodology/approachA binary logit model and individual survey data from the National Telecommunications Commission 2009 are used to estimate the intention of mobile phone consumers to switch.FindingsThe results show that subscriber characteristics, including age, government officer, self‐employed, internet use, central region, and southern region, are significant in explaining the switching behavior of Thai mobile subscribers. They also indicate that the mobile operators' customers are confronted with different switching costs. The subscribers of the largest mobile operator have the highest switching costs. This study also shows that the largest mobile operators will gain more switching subscribers than smaller operators. The implementation of MNP will help to lower the switching costs of smaller mobile operators rather than of larger operators, as the subscribers of smaller operators are more likely to switch and move to larger mobile operators, as the larger operators provide better quality network coverage. The study shows that the expected impact of implementing MNP without national mobile roaming regulations would be worse for smaller mobile operators. The smaller operators need to compete on both price and quality improvement. In the short run, it would not be possible for the smaller operators to compete with the larger operators due to the inequality in the quality of network coverage.Originality/valueThe result is useful to developing countries considering implementing MNP regulation.