Mobile Telecommunication Industry in Korea

1. Introduction

Mobile Telecommunication industry in Korea is under oligopoly and market is divided by 3 firms which are KT, SKT and LGT. government introduced number portability policy which allows customer to move mobile carrier easily to make industry more competitive. So it is important thing for each carrier to maintain or improve their customer loyalty. The purpose of this research is find relationship between customer loyalty and service quality of carrier. And finding which service quality items affect a lot and which are not is second purpose of this research.

2. Research Model

- Independent Variable

Independent variables are consist of different service quality items. Also it can be interpreted as customer satisfaction so if customer has high satisfaction level, customer loyalty will be counted highly. (Hypothesis)

And also I planned to find which item affects a lot.

A. Quality of service

1) Quality of voice service

2) Quality of 3G data service

3) Quality of supplementary service

Voice service is basic function of mobile phone service. Because of increasing smartphone, 3G data service is becoming important factor choosing carrier recently. Carrier's are providing a lot of supplementary service like spam message blocking service. So I inserted supplementary service for third item evaluating quality of service.

B. Variety of rate system

1) Variety of voice service rate system

2) Variety of 3G data service rate system

3) Variety of SMS/MMS service rate system

Customer has to choose rate system when they make contract with carrier. And many companies bundling the rate system with voice, 3G and text message service. So this items measure the customer's variety of choice.

C. Reasonable rate

1) Reasonable rate of voice service

2) Reasonable rate of 3G data service

3) Reasonable rate of SMS/MMS service

Some customers like student are price sensitive. These items are measuring price satisfaction of carrier.

D. Contents provided by carrier

1) News and information

2) Music download/streaming service

3) Multimedia service(Video streaming, Satellite DMB)

These days, not only voice service but also other contents provided by carrier are important because of smartphone. Carriers are providing news and information through widget and message.

Also they provide music download service like SKT Melon, and KT Dosirak.

E. Customer service

1) Accessability of customer service/call center employee

2) Friendliness of customer service/call center employee

3) Professionalism of customer service/call center employee

Customer service is direct touch point to customer so it is generally affects a lot.

F. Membership program

1) Variety of membership service

2) Discount benefit of membership service

3) Long-term client discount

Membership service was one of important factor selecting mobile carrier in Korea. Because Korean company tried to give a lot of benefits such as discounting theatre admission, convenience store and restaurant. And it became burden to carriers so they tried to reduce membership program recently. But still membership program is big factor for Korean users.

- Dependent Variable

1) Willingness to recommend their carrier to another person

2) Willingness to use other product or service provided by carrier in use

3) Willingness to switch the company (negative)

Dependent variable is consists of three items related to customer loyalty.

3. Research Method

A. Servey

Date : 2011. 6. 4

Location : Yeukori(6 junction), Pohang

Yeukori is one of the biggest downtown area in Pohang. For the randomness of survey, I requested the survey to people who were resting at the bench near the stream located along the street. I approached one after another. But I couldn't get perfect randomness because some senior citizens refused the survey or couldn't understand the survey items. Young people were cooperative. Only 2 women refused the survey. It took approximately 3hours to finish the survey.

B. Analysis

Tool : SPSS(PASW Statistics 18 Korean Ver.)

- Frequency Analysis, Crosstab, Regression analysis(Linear),

Regression analysis(Linear-Backward elimination)

4. Sample analysis

A. User gender

Gender ratio

Frequency Percent Valid Percent Cumulative

Percent

Valid Male 14 46.7 46.7 46.7

Female 16 53.3 53.3 100.0

Total 30 100.0 100.0

To gain randomness for survey, I targeted only people who are sitting in the bench. And I could get sex ratio almost evenly and it is similar to national level.

B. Age group

Age group

Frequency Percent Valid