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Network Effects and Qos As Determining Factors In World Academy of Science, Engineering and Technology International Journal of Humanities and Social Sciences Vol:8, No:10, 2014 Network Effects and QoS as Determining Factors in Selection of Mobile Operator: A Case Study from Higher Learning Institution in Dodoma Municipality in Tanzania Justinian Anatory, Ekael Stephen Manase know that the future is brightest for companies that develop Abstract—The use of mobile phones is growing tremendously all technologies that make the lives of customers easier and over the world. In Tanzania there are a number of operators licensed better. This means satisfying the needs and desires of people by Tanzania Communications Regulatory Authority (TCRA) aiming of all age groups, both in the work place and at home[1]. at attracting customers into their networks. So far In telecommunication Industry we have witness a stiff telecommunications market competition has been very stiff. Various measures are being taken by mobile operators to survive in the competitions in Tanzania and other counties. The current market. Such measure include introducing of different air time mobile operators with at least a coverage in all Tanzania bundles on daily, weekly and monthly at lower tariffs. Other cities/town are Vodacom Tanzania [2], Tigo Tanzania [3], measures include the introduction of normal tariff, tourist package Airtel Tanzania [4], and Zantel [5]. Tanzania and one network. Despite of all these strategies, there is a dynamic Telecommunications Company Ltd (TTCL) [6] has coverage competition in the market which needs to be explored. Some in some of the regions in Tanzania mainland. Others mobile influences which attract customers to choose a certain mobile operator are of particular interest. This paper is investigating if the operators such as Sasatel [7], Smile [8] etc are operating in network effects and Quality of Services (QoS) influence mobile major cities such as Dar es Salaam [9]. All mobile operators customers in selection of their mobile network operators. Seventy are looking different alternative to attract customers to their seven students from high learning institutions in Dodoma networks. Various measures are being taken by different Municipality in Tanzania participated in responding to prepared companies including, lowering tariff, and introduction of free questionnaires. The data was analyzed using Statistical Package for short messages within and out of their networks, and free calls Social Science (SPSS) Software. The results indicate that, network coverage does influence customers in selection of mobile operators. during off-peak periods. Others include introducing different In addition, this paper proposes further research in some areas bundles in daily, weekly and monthly at lower tariff. Also especially where the study came up with different findings from what other companies are introducing normal tariff, tourist package the theory has in place. and one network. In our previous studies in [10] we looked at if tariff is a determining factor in choosing mobile operators. Keywords—Network effects, Quality of services, Consumer The study was conducted on students in higher learning Buying, mobile operators. institutions in Dodoma municipal and it was revealed through descriptive analysis that, the tariff had 61%. This paper is I. INTRODUCTION extension of our previous study in [10] and is investigating if ECENT years telecommunication companies have the network effects and QoS influence mobile customers in R accomplished a great deal in deploying different mobile selection of their mobile network operators. For comparison technologies. These include Global System for Mobile purpose of the same area and group studied in [10] were used. communications (GSM) and Code Division Multiple Access (CDMA) operators. In Tanzania alone what has been done in II. EMPIRICAL FRAMEWORK the past ten years is incomparable to many years before. The A. Network Effects as Determining Factors in Choosing emerging breakthrough in telecommunications will revolve Mobile Operators around improving lives through more efficient International Science Index, Humanities and Social Sciences Vol:8, No:10, 2014 waset.org/Publication/10000038 communications, better delivery of information when and Goolsbee and Klenow [11] used individual-level data to where it’s necessary needed and improving lives away from investigate the interactions between consumer’s behaviour on work, as well as on the job. Companies that have succeeded in network selection and the network effects. Their study the past and that will continue to flourish in the era to come revealed that, for networks like mobile telecommunications, it is rather an individual’s social network that determines an adoption decision. They concluded that mobile networks are Justinian Anatory is with the School of Informatics, College of Informatics highly compatible with each other and that, the network and Virtual Education, University of Dodoma, P. O. Box 490, Dodoma, Tanzania, (mobile: phone: +255262310010; fax: +255262310118; e-mail: effects that exist in the market are mainly induced by network anatory@ engineer.com). operators in many countries through higher prices for calls to Ekael Stephen Manase is with Tanzania Telecommunications Company other networks (off-net calls) than for calls to the same Ltd, Dodoma, Tanzania. International Scholarly and Scientific Research & Innovation 8(10) 2014 3388 scholar.waset.org/1307-6892/10000038 World Academy of Science, Engineering and Technology International Journal of Humanities and Social Sciences Vol:8, No:10, 2014 network (on-net calls). These were discussed as tariff- characteristics of users, none of the different variables among mediated network effects but assumed that every subscriber to advertising or off-net prices proved to have a significant a network is of the same importance to the consumer [12]. impact on the probability of choosing a mobile operator. The Kim and Kwon [13], have also studied network effects on results of this research indicated that, the number of the consumer selection behaviour and used market level data subscribers and market share have a positive impact on the in Korean mobile telephony market. They also revealed that probability of choosing a mobile operator [17]. network effects have significant impact on consumer’s Birke and Swann [18] on their research on the impact of decision regarding selection of mobile operator. A survey network effects in choosing mobile operator revealed that the conducted by Ericsson Company in Malaysia [14] revealed network effects in mobile telecommunications are local that, mobile consumers are mostly influenced by price, (that is (among friends), which militates against the tendency of tariffs), network coverage, and capacity. The study also network markets to be highly concentrated. This study revealed that, the more the coverage and the network capacity, considered network effects as the extent of network coverage the more likely the operator was to win more customers. only, although in totality, network effects comprise of Hrovan et al. [15] analyzed the subscription behaviour of coverage, number of customers within the network and the mobile users in Slovenia with a special emphasis on network network capacity or network size. It is the intention of this effects. In their comments they said that network effects also paper to find out whether the extent of the network effects can represent a disadvantage for small operators and have a also influence customers in selecting a mobile operator since tendency towards a higher market concentration. This is what some operator’s networks in Tanzania have a low coverage was observed in Slovenian mobile market, where a battle for with much concentration in urban areas only while others new subscribers was then causing a continuous fall in prices in extend to the very remote areas with extensive coverage in conjunction with the continuous growth of penetration. On the almost all major roads. Due to the recommendations from other hand, Slovenian mobile market remained highly Peighambari [19] on further research on factors determining concentrated. They came up with a conclusion that, the the choice of mobile operator, and based on the reviewed numbers of subscribers and market share have a positive literature on consumer buying behaviour, the current paper correlation with the probability of choosing a mobile operator also investigate through respondent’s recommendations and therefore an indication that network coverage is the whether network effects and quality of services influence determining factor for consumers in selecting a mobile mobile customers in their choices of a mobile operator. operator [15]. B. Quality of Service as a Determining Factor in Selection Researchers like Doganoglu and Grzybowski [16], studied of Mobile Operator network effects on the customer selection behaviour and used market level data in analyzing the mobile market in German. Researchers in the marketing have studied most areas of They believed that the network effect operating at the firm consumer behaviour including the impact of everything from level leads to intense competition in the market. In their music to lighting on how people behave and how they findings, they observed that, network coverage in mobile consume products. This is not surprising considering the fact telephony had many origins. First, an increase in the number that we live in a consumption-driven culture. This paper focus of users raises communications
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