Over the past few years, the Indian mobile market has recorded an
exponential growth that has exceeded the expert's expectations. The Indian mobile
subscriber base grew by approximately 48.5% in
2008. The low call rates, affordable
mobile handsets, and the changing socioeconomic status of the customers along with
the regulatory reforms have resulted in the Indian mobile sector to expand from
around 10 million subscribers in 2002 to reach 370 million by
2008. The GSM players
constitute 75% of the total market with Bharti-Airtel, BSNL, Vodafone, and
Idea being the major players. The Code Division Multiple Access (CDMA) players such
as Reliance and Tata Indicom have maintained a reasonably stable market share
of 25% over the past few years. Bharti-Airtel is the market leader with about
23.2% market share and has recently crossed 100 million subscription
base.
According to a report by the global consulting and research firm, Gartner
Inc., the Indian mobile service is expected to grow at a compounded annual rate
of 18%, exceeding 700 million subscription base by
2012. The market is estimated at $26 bn with the mobile penetration to increase by 38% by
2011. The rural
penetration would reach 58% in 2011 up from an abysmal 2% in 2006.
The prepaid services would be an important driver for this exponential growth
and would account for 93% of the total subscribers. The bulk of the market being
voice services, the data services could make up as much as 30% with the Average
Revenue Per User (ARPU) falling to $59.5 from $82 by
2011.
While the Indian mobile market is poised to grow at an increasing rate,
the mobile service providers have not been able to either maintain or increase
customer satisfaction. According to Voice and Data mobile user's satisfaction
survey 2008, there was a significant drop in the overall satisfaction of all
major service providers against the benchmark set by Telecom Regulatory Authority
of India (TRAI). This is a major cause of concern with Prasanto K Roy, Chief Editor
of Cyber Media saying "We see rapidly declining quality of service stemming
from poor network availability and lack of customer care as the top issues for the
mobile players". In addition, the churn rate is high at 41% with customers often
switching service providers. With the increased competition and more new entrants to
the market, the quality of services provided and customer satisfaction becomes
the determinant of customer loyalty. According to Claes Fornell, "satisfied
customers represent a real, albeit intangible, economic asset that generates future
income streams for the owner of that
asset". The study taps this gap and
investigates the antecedents of customer satisfaction with the Indian mobile services.
Further, the paper adopts the American Customer Satisfaction Index (ACSI) model to
examine the impact of customer satisfaction on trust, price tolerance and
customer loyalty. |
