An Analysis of Switching Behavior in the Thai Cellular Market

Abstract

The purpose of this paper is to explain the determinate factors of switching behavior in the Thailand cellular market before the mobile number portability (MNP) policy is implemented. A binary logit model and individual survey data of the National Telecommunications Commission 2009 is used to estimate the intention of mobile phone consumers to switch. The results show that subscriber characteristics including age, government officer, self employed, internet use, central region, and southern region can significantly explain switching behavior of Thai mobile subscribers. It also indicates that different mobile operators’ customers confront with different level of switching costs. The subscribers of the largest mobile operator receive 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 switching costs of smaller mobile operators rather than larger operators since the subscribers of smaller operator are more likely switch and they would move to the larger mobile operators since the larger operators provide better quality of network coverage. The study shows the expected impact of implementing MNP without national mobile roaming regulation that it will be worst for the 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 larger operators due to inequality of quality of network coverage.