Abstract
Abstract As a result of rapid technological advancements in the mobile telecommunication industry, many firms have set their strategies to target larger customer bases since it forecasts extensive future profit generation. Due to severe competition, while employing successful customer loyalty strategies, customer locked-in strategies are also commonly used in the telecommunication industry to retain their customers within the firm. Call-clubs benefits are one of the commonly used strategies used to create local network effects in the mobile telecommunication market place. Thus, this paper targets to provide insight on the implication of subscriber’s involvement in call-clubs on their loyalty towards service providers. A survey based quantitative approach was followed for this study and the data was gathered through a structured off-line questionnaire from randomly selected mobile users in Sri Lanka. Based on collected valid responses, analysis was carried out to answer the designed research hypotheses and structural equation modelling techniques were mainly used for statistical analysis. As per the analysis, research model shows a fairly high level of explanatory power with customer loyalty and perceived call-clubs benefits which indicate customers′ preference towards the service provider when most frequently contacting parties are using the same network. Further analysis was carried out to investigate the moderating effect on call-clubs benefits and customer loyalty relationships due to two main technological advancements; namely, Internet based voice calling facility and multiple connection access facility. Based on the analysis results recommendations were made to track the value of call-clubs strategies accordingly.
Highlights
Day by day, the mobile telecommunication market is facing drastic changes due to technological innovations in the industry
To check the reliability of our data, internal consistency of the sample was analysed. Both call-club benefits and customer loyalty scales are first subjected to a series of exploratory factor analyses
Likelihood factoring estimation via the Promax rotation as the orthogonal rotation method were employed and the results reveal that the call-club benefits scale has two dimensions in line with the design
Summary
The mobile telecommunication market is facing drastic changes due to technological innovations in the industry. According to Lee et al (2015), the rapid expansion of the mobile service market was spurred by the wide availability of high-speed telecommunication networks and wireless Internet services. These indicate subscribers’ extensive use of mobile services than telephony. As a result of these market changes, company profits through telephony have significantly declined though all the service providers are up to date in technological adoption perspective in the market place. This has created a new environment for service providers to become the platform supplier for data channels which forecasts extensive future profit generation (GSMA, 2016). Similar phenomenon has verified by Reicheld and Sasser (1990), and they have stated that the businesses may increase their profits by 100% if the retention rate goes up by 5%
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