A comparison between switching intention and switching behaviour in the South African mobile telecommunication industry

Abstract

Rapid growth in the mobile telecommunications industry has resulted in near-saturated markets and thus intense competition. Due to high new customer acquisition costs, mobile network operators (MNOs) provide attractive offers to competitors existing customers to encourage switching. Consequently, MNOs currently face accelerated switching rates, despite using contracts as a means of customer lock-in. Therefore preventing switching in this industry has become vital. The study develops and tests a conceptual switching intention model using switching intention data. Switching antecedents investigated are relational switching costs, perceived value and alternative attractiveness. Subsequently, actual switching behaviour data is compared to the conceptual switching intention model. Finally, the role of relationship characteristics in both switching contexts is investigated. Primary data was collected via an online self-administered survey using a cross-sectional online panel. A contract with a South African MNO was a prerequisite for survey participation. Parameter estimates were obtained using maximum likelihood (ML) in AMOS and bootstrapping was conducted to confirm the stability of the ML estimates. EQS was used to obtain robust ML indices. The switching intention model fit indices obtained were as follows: x^2/df = 6.004 (x^2 = 966.61; df = 161; p < 0.000); RMSEA = 0.070 [0.066; 0.074]; NNFI = 0.943; CFI = 0.952. In the switching behaviour context, the three antecedents explained only 12% of variance; whereas the same antecedents explained 52% of variance for switching intention. The results suggest that factors other than the antecedents investigated drive switching behaviour. Relationship depth weakly influenced switching intention, while the influence of relationship length and breadth was negligible. None of the relationship characteristics influenced switching behaviour. The strongest predictor of switching intention was alternative attractiveness. The relationship strength of the dependent variable and antecedent variables was stronger in the switching intention context than in the switching behaviour context. Findings suggest that switching intention and switching behaviour are intrinsically different. Moreover, customers may perceive an increase in their monthly bill as a reason to switch. However other factors may influence customers when their actual switching decision is made.