THE DETERMINANT OF USERS' CHOICE OF MOBILE SERVICE PROVIDERS IN THE NIGERIAN TELECOMMUNICATION INDUSTRY

Introduction

1.1 Background To The Study

In a competitive market, service providers are expected to compete on both price and quality of services and also it is necessary for the service providers to meet the consumers’ requirements and expectations in price and service quality (Melody, 2001). Telephone, for example, provides ubiquitous social interactions between and among individuals, groups, organisations and the governments alike and that subsequently makes and operates a broadly networked international environment tying nations, cultures, casts, creed, national identities and businesses.

According to Olatokun and Nwonne (2013), the Nigerian telecommunication sector has experienced unprecedented growth especially between 2001 and 2007 following the deregulation of that sector by then civilian democratic government in 1999. Since then, Nigeria has pursued an aggressive market liberalization policy that has made her perhaps the most liberalized telecommunication market in Africa. The deregulation brought about the issuance of the first set of GSM licenses in 2001 by the Nigeria communication commission (NCC). At present, there are four active Global System for Mobile Communication (GSM) operators: MTN, Airtel, Giobal Communication Limited (Glo), and most recently in 2008 Etisalat, and multitude of Code Division Multiple Access (CDMA) operators. The top mobile GSM operators; MTN, Glo and Airtel, account for over 85% of mobile subscriptions in the country (Olatokun and Nwonne, 2013). The Nigeria telecommunication market has been described as one of the world’s fastest growing market, making it the most preferred investment destination for mobile network operators (Telia, Adetoro and Adekunle, 2009).

The telecommunication market has attracted more than $18 billion dollars in investment as at 2009, the second largest after the oil and gas sector and is still growing both in terms of subscribers’ base and infrastructural development (NCC, 2007). The nation’s teledensity currently exceeds 50%, with about 74 million subscriber lines as of the end of December 2009.Access to modern telecom services is now within reach of more than 90% of the people who live within Nigeria. Users of mobile products and services are highly differentiated in terms of demography thereby increasing sensitivity across the offerings of mobile operators. Since subscribers base determine the network effects accrued to a mobile telecom operator, huge subscribers base amount to high network effect with a resultant margin on profitability.

According to Olatokun and Nwomie (2012), consumers of telecommunications products and services in Nigeria are varied and their tastes, needs and expectations are also varied. User satisfaction is very important in today’s business world as the ability of a service provider to create high degree of satisfaction is crucial for product differentiation and developing strong relationship with the user. User satisfaction makes the phone users loyal to one telecommunication service provider. Satisfaction of the user can help the brands to build long and profitable relationships with their users. Although it is costly to generate satisfied and loyal users of a product or service, however, it would prove profitable in the long run for the firm. Therefore, this study is aimed at knowing the users choice of mobile services providers in the Nigerian Telecommunications industry.

1.2 Statement Of The Problem

It is a widely known fact that life in the world today has been made easier through Communications. It has made every business in the world so easy that many now describe the world as a global village. Though the major objectives of GSM had been partially achieved in Nigeria, there are some major challenges to the development of quality ICT in Nigeria and these challenges can be seen in the services rendered by the major network service providers, namely MTN, Airtel, Etisalat and Globacom to their numerous subscribers.

Most times, using the services of these network providers are frustrating due to the high rate of drop calls, poor network coverage, frustrating Internet services, unjustifiable charges and lack of qualified customer care agents. One can seldom complete a minute call without any bad signal interference. Also, these network providers seem to only focus attention on cities and major towns leaving remote areas with poor and even lack of network. Also, in spite of the fact that Internet plays a key role in globalisation, none of the service providers in Nigeria can boast of adequate and reliable Internet connection in all the villages and cities in the country.

1.3 Aim And Objectives Of The Study

The aim of the study is to assess the determinants of users’ choice of mobile service providers in the Nigeria Telecommunication industry While the specific objectives of the study are to:

1. Identify the influences of the frequency of dropped calls on users’ choice of mobile service provider.
2. Examine the effects of occupation of mobile phone users on choice of telecoms operators in Nigeria.
3. Assess the impact of telecoms service quality on users’ choice of mobile phone carriers in Nigeria.
4. Determine the effect of sales promotion on the choice of telecommunication service provider in Nigeria.

1.4 Research Questions

The following research questions readily emanated from the objectives of the study and their resolution would be helpful in attaining the purposes for which this study is undertaken:

1. What are the influences of the frequency of dropped calls on users’ choice of mobile service provider?
2. What is the effect of occupation of mobile phone users on choice of telecoms operators in Nigeria?
3. What is the impact of telecoms service quality on users’ choice of mobile phone carriers in Nigeria?

1. What Is The Effect Of Sales Promotion On The Choice Of Telecommunication Service Provider In Nigeria?

1.5 Research Hypotheses

In addition to the research questions above, the following hypotheses were evaluated to lend more credence to the findings of the study.

Hypothesis One

• H0: There is no significant relationship between frequency of dropped calls and users choice of mobile service.
• h1: There is significant relationship between frequency of dropped calls and users choice of mobile service.

Hypothesis Two

• H0: There is no significant relationship between occupations of mobile phone users on choice of telecoms operators in Nigeria
• h1: There is significant relationship between occupations of mobile phone users on choice of telecoms operators in Nigeria

Hypothesis Three

• H0: There is no significant relationship between telecoms service quality and users’ choice of mobile phone carrier in Nigeria.
• h1: There is significant relationship between telecoms service quality and users’ choice of mobile phone carrier in Nigeria.

Hypothesis Four

• H0: There is no significant relationship between sales promotion and choice of telecommunication service provider in Nigeria.
• h1: There is significant relationship between sales promotion and choice of telecommunication service provider in Nigeria.

1.6 Significance Of The Study

This research intends to assess the determinants of users’ choice of mobile service providers in the Nigeria Telecommunications industry. Findings of the study will therefore be used to throw more light on the reasons behind the choice of a particular network, while the positive aspects of these determinants can be sieved from the whole gamut of the concept, so that it can help form the very vertebra of this research work. Recommendations made from this research study will also aid the management of the telecommunication firms in Nigeria to identify and comprehend the endless opportunities that abound in the Nigeria telecommunication industry.

Furthermore, scholars and students of the management can use the research work as a reference point in their future research.

1.7 Scope Of The Study

This research attempts to understudy the determinants of users’ choice of mobile service providers in the Nigeria Telecommunications market. It is not an easy task on the part of the researcher to take a nationwide magnitude of the study, therefore the study will be limited to students of University of Lagos as a case study.

1.8 Definition Of Terms

Globalization:

Globalization implies the opening of local and nationalistic perspectives to a broader outlook of an interconnected and interdependent world with free transfer of capital, goods, and services across national frontiers. GSM: Global System for Mobile Communications, originally Grouped Special Mobile), is a standard developed by the European.

Internet:

Is a global network connecting millions of computers. More than 100 countries are linked into exchanges of data, news and opinions.

Tarrif:

A tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers. Also Tariffs provide additional revenue for governments and domestic producers at the expense of consumers and foreign producers.

Teledensity:

Is the number of telephone connections for every hundred individuals living within an area. It varies widely across the nations and also between urban and rural areas within a country.