Consumers’ Behaviour Towards Telecom Services

Title and Introduction

Title: CONSUMERS’ BEHAVIOUR TOWARDS TELECOM SERVICES

According to World Bank (2006), access to information and communication technology is considered important to a sustainable agenda of poverty reduction. It is because it increases the efficiency and competitiveness of a country in the global economy, which enables better delivery of health and education services and creates new sources of income and employment. It has also been emphasized that mobile telecommunication is one of the most convenient means of communicating and transacting business. Nowadays, it can be seen that telecommunication industry in Malaysia has also been a fastest growing sector keeping appropriate pace with global advancements, especially the mobile telecom market. This telecommunication sector contributed much to the nation’s economic growth and development which is consistent with the National Vision 2020. There is a dramatic increase in the growth rate of use of telecommunication facilities which showed by the rank of increasing number of telephone subscribers. According to Government Report (1995), the number of telephones for every 100 persons increased from 6.5 in 1985 to 12 in 1993. Scrutinizing the background of Malaysian telecommunication sector, competition can be seen as main factor by the telecommunication service provider companies. The competition between the telecommunication service provider companies can be affected by several factors which are price, service quality, and promotion.

There are several research questions that can be formulated based on the introduction and problem statement.

What is the relationship between consumers’ knowledge and willingness to purchase the telecom services?

What is the relationship between consumers’ attitudes and willingness to buy the telecom services?

Do consumers willing to pay extra for the telecom services?

How the social influences the consumers’ willingness to pay for the telecom services?

Research Objectives

To increase the understanding of consumer’s knowledge and attitude towards telecom services

This research could help producers to have a better understand of consumer’s knowledge and their attitudes on telecom services. This may increase the manufacturers to understand and satisfy consumers’ needs and wants in the consumption of telecom services. By knowing the level of consumer’s knowledge and attitudes, government can conduct some awareness campaigns or events to improve it.

To identify the consumers’ willingness to pay for telecom services.

This paper would also identify how willing the consumers want to pay extra to purchase telecom services. It is important to determine consumers’ willingness to pay for telecom services because this can be used by marketer markets price of telecom services. This can provide guideline for the producers to set the price so that the consumers will not be overcharged or producers will not incur losses.

To investigate the relationship between the social influence and the consumers’ intention to purchase telecom services.

This study can help to determine will the social influence the consumers to purchase telecom services. They may focus this factor by encourage consumers to recommend their friends or family the advantages of using telecom services.

Justification for the Research

From this study, we can create awareness among consumers and let them know the benefits of purchasing telecom services. Furthermore, we can also know the consumers’ purchase intention towards telecom services and modified the strategy to increase the use of telecom services. This may indirectly contribute to our social.

Literature Review and Theoretical Framework

In telecommunication, a telecommunications service is a service which provided by a telecommunications provider, or a specified set of user-information transfer capabilities provided to a group of users by a telecommunications system. For purposes of regulation by the Federal Communications Commission under the U.S. Communications Act of 1934 and Telecommunications Act of 1996, the telecommunications services is defined as “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.” In a competitive market like Malaysia, service providers are expected to compete on both price and quality of services. It is necessary for the service providers to meet the consumers’ requirements and expectations in price and service quality (Melody, 2001). Customers need fundamental information about the mobile telecommunication service providers before they want to purchase a certain operator’s line. Thus, it seems extremely important that a company must know the needs, wants, taste, criteria and the perceptions of their consumers in the first place if they want to compete with other company in same sector. As the competition among the telecom operators has been escalating, the telecom operator is necessary to learn about the consumers’ perception about the price, service quality, and promotion which have been playing an important role which will affect the consumer behaviour on selecting the telecommunications services. Therefore, they are finding the factors that can influence consumers’ intention to purchase and use telecom services. There are several factors that have significant relationship with the consumers’ purchase intention of telecom services.

Service Quality

According to Leisen and Vance (2001), service quality helps to create the competitive advantages by being an effective differentiating factor. Competitive advantage is a value-creating strategy which is not implemented by any existing or potential competitors (Barney, 1991). As a result, service quality plays an important role which can be used as a competitive advantage to give a good satisfaction to customers and lead to consumer loyalty and future purchase (Johnson and Sirikit, 2002). In particular, consumers prefer service quality when the price and other cost elements are the same (Boyer and Hult, 2005). It has played as an important role for the product and service offering (Wal et al., 2002). Moreover, a competitive advantage also sustained when other companies are unable to duplicate the benefits