Customer Satisfaction in Nepalese Cellular Networks: Rewan Kumar Dahal

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Tribhuvan University Journal

Vol. 33, No.TRIBHUVAN UNIVERSITY


2: 59-72, December, JOURNAL, VOL. 33, NO. 2, DECEMBER, 2019
2019 59
Centre for Research, Tribhuvan University,
Kathmandu, Nepal
DOI: https://doi.org/10.3126/tuj.v33i2.33607

CUSTOMER SATISFACTION IN
NEPALESE CELLULAR NETWORKS
Rewan Kumar Dahal*
*Lecturer, Nepal Commerce Campus, Minbhawan, TU

ABSTRACT
Now a days identification of responsible factors that influence customer
satisfaction is a key concern of marketers and research scholars and it will remain
in future too. The purpose of the study was to identify the responsible factors that
affect on customer satisfaction with cellular networks in Nepal and analyze them.
Nepal Telecom and Ncell were taken as sample organizations where they occupy
more than 94 % of market share. The study was based on primary data collected
through a structured questionnaire based on the judgmental sampling technique
from 816 customers. It examined that price and service quality, brand and loyalty,
corporate social responsibilities, network and coverage, and customer care and
innovation were the responsible factors in the assessment of customer satisfaction
with Nepalese cellular networks services. The study concluded that mobile service
providers should concentrate upon the factors responsible on customer satisfaction
and care of those factors that have significant influence on promoting customer
satisfaction in Nepalese cellular networks industry.
Keywords: service quality - brand loyalty - social responsibilities - customer care
- innovation.
INTRODUCTION
Customer satisfaction as an experience-based evaluation made by
the customers by comparing the actual level of service obtained with that
of their expectations. It is not a universal phenomenon and they do not
enjoy the same service experience by consuming a commodity, service or
idea due to variations of their needs, objectives and past experiences that
influence their expectations (Saha et al. 2016). The unique combination of
product features, services, and relationships of company should satisfy its
customers’ needs better than the competitors (Atkinson et al., 2014).
Achieving and sustaining success by satisfying customers in today’s
hyper-competitive marketplace
6 CUSTOMER SATISFACTION IN NEPALESE CELLULAR

is an ultimate challenge for any company and business leader especially


in- service industries like mobile telecommunication services.
The mobile network market in Nepal is relatively new yet the
growth is much faster in comparison to other industries. The operators
are enthusiastic to promote quality of services for customer satisfaction
at present and near the future. All of them compete to grab customers by
providing wide range of services based on customers demand. Markets are
becoming more international, dynamic and customer-driven. Customers
are demanding more variety, better quality and service, including both
reliability and faster delivery. The companies should look for factors to
attract, retain and satisfy their customers. In response to ongoing changes
in the operating environment of cellular network industry, managers of
telecom companies to stay in the competition and offering their services
at acceptable levels, benefit from new techniques of management in their
organizations (Khanmohammadi et al. 2015). Many studies notice that
higher customer satisfaction means higher product quality and higher
willingness to purchase the product (share of wallet) and a satisfied customer
positively affects the profitability of the company.
Therefore, this study tries to find the answer of: what are the
major factors that affect customer satisfaction in cellular networks
industry in Nepal? To assess the issues, the objective of the study is to
examine strength of the most influencing factors that affect customers’
satisfaction and initiate some discussions in this regard.
LITERATURE REVIEW
Customer satisfaction is closely related with fair pricing on
product or a service that leads to customer loyalty towards organization
(Martin- Consuegra et al. 2007). Both price level and price fairness
influence on customer satisfaction (Hermann et al., 2007).
Telecommunications services are undifferentiated products and therefore,
mobile phone subscribers will be willing to pay for services only when
they are satisfied, otherwise, they will switch to another operator
(Lommeruda & Sorgard 2003). Service quality is a comparison of
perceived expectations of a service with perceived performance.
Customers’ perception is widely varied in accordance with the
communication quality, call service, facilities, price, customer care and
service provider’s attributes (Paulrajan & Rajkumr 2011). Customer
service quality is a significant source of distinctive competence and often
considered a key success factor in sustaining competitive advantage in
TRIBHUVAN UNIVERSITY JOURNAL, VOL. 33, NO. 2, DECEMBER, 6
service industries (Palmer 2001). Customer service can also be viewed as
a system of activities that comprises customer support systems, complaint
processing, speed of complaint processing, ease of reporting complaint
and friendliness when reporting complaint (Kim, Park & Jeong 2004).
Furthermore, promises and commitments develop long term relationship
and maintain customer loyalty (Sanchez & Iniesta 2004) that lead better
customer satisfaction.
Customer satisfaction generally depends on wider array of
facilities for the customers (like easy recharge, easy utility bills payments,
more friends and families (FNFs), customer care, higher speed in internet
service etc.) offered by the marketers (Saha et al. 2016). Product
differentiation and customers’ facilities can be used as powerful tool of
competitive advantage adopted by organizations for offering products to
the customers that satisfy individual customer’s needs (Saha et al. 2016).
The brand image of the company is expected to have a positive
relationship towards the customer expectations, satisfaction and loyalty
(Martensen et al. 2000). Gupta (2002) found the empirical evidence
between corporate reputation and competitive advantage for the firms by
successfully differentiating it from competitors. It takes precedence in the
services sector, especially with regards to those providing services
with little differentiations and ones competing in aggressive conditions,
for example, the telecommunications sectors (Santouridis & Trivellas
2010).
Organizational societal and environmental image is a valuable
intangible capital that is hard to imitate, and it can help an organization
to achieve a sustainable and superior social performance. The image is
expected to have a positive relationship towards the customer
expectations, customer satisfaction and loyalty of customers to the
company (Rahman, 2016). Corporate reputation and social responsiveness
have significant competitive advantages (Gupta 2002). Network quality as
one of the relevant factors in terms of evaluating service performance
quality in determining the overall customer satisfaction (Rahman et al.
2011). Studies have shown that quality reflects the customers’
expectations about a product or service (Leisen & Vance 2001) and the
service performance quality as the consumers’ judgment about a firm’s
overall excellence or superiority (Parasuraman, Zeithaml & Berry 1988).
According to Leisen and Vance (2001) service performance quality helps
to create the necessary competitive advantage by being an effective
differentiating factor.
6 CUSTOMER SATISFACTION IN NEPALESE CELLULAR

Innovativeness satisfies customers by converting the invention or


idea into product/service and improved firm value at acceptable risk
(Dotzel et al. 2013). It influences customer satisfaction and customer
retention from end user perspective (Salunke et al. 2013) and includes
process innovation; customization; competitiveness. Technology and
information facilitate innovation in competitive markets (Sood & Tellis
2009) and improvisation, modification, augmentation or transformation of
existing channels of trade using technology can reduce transaction costs
that lead better customer satisfaction (Rodríguez-Pose & Crescenzi 2008).
Conceptual Framework and Hypotheses
This study is guided from the stakeholders’ theory and focuses on
customers, specifically treating them well and managing for their interests,
helps a firm create value along several dimensions and is therefore good for
firm performance (Bosse, Phillips & Harrison 2008). The conceptual
framework of the study consists of seven major constructs that influence
cell phone users’ satisfaction such as price and service quality, friendly and
responsive service, facilities and effective communication, brand and
loyalty, corporate social responsibilities, network and coverage, and
customer care and innovation among all as observed from the literature. The
structural representation of the customer satisfaction presented in Figure 1.

Figure 1: Conceptual framework of the study


TRIBHUVAN UNIVERSITY JOURNAL, VOL. 33, NO. 2, DECEMBER, 6
The conceptual framework leads to the following hypotheses:
H1: Price and service quality positively and significantly affect customer
satisfaction.
H2: Friendly and responsive services positively and significantly affect
customer satisfaction
H3: Facilities and effective communication positively and significantly
affect customer satisfaction.
H4: Brand and loyalty positively and significantly affect
customer satisfaction.
H5: Corporate social responsibility positively and significantly
affects customer satisfaction.
H6: Network and coverage positively and significantly affect customer
satisfaction.
H7: Customer care and innovation positively and significantly affect
customer satisfaction.

METHODOLOGY
The study applied quantitative research strategy and used primary
data. The data were collected through structured questionnaire survey.
The population of the study comprised all the global system for mobile
communication (GSM) customers of Nepal Telecom and Ncell since they
occupy approximately 94 % of the total market share. The study employed
judgmental sampling technique because there was no evidence of active
and the dead SIM card issue with sample companies. Targeted
respondents of the study were: universities faculties, post graduate
students, service holders, business persons, freelancers etc. who are living
in different provinces and use GSM networks. A Sampling plan was used
as proposed by Krejcie and Morgan’s (1970), Bowerman et al. (2004) and
ensured at least 385 respondents of each sample organization.
The questionnaire designed for customers’ survey consisted of 48
items and organized into three sections. The first section asked for
demographic / general information of the respondents and included 7
questions. The second section requested for customer satisfaction in
various dimensions based on literature and included 33 questions. The
third section asked for the overall satisfaction and included 8 questions. The
last two sections focused on the study variables and series of close ended
questions were composed in order to get appropriate information from the
respondents. All survey items of the study
6 CUSTOMER SATISFACTION IN NEPALESE CELLULAR

variables were measured with a 6-point Likert-type scale with 1 = strongly


disagree; 2 = disagree; 3 = slightly disagree; 4 = slightly agree; 5 = agree; 6
= strongly agree. The 6-point scale was chosen because it does not include
the ambivalent middle rating.
The questionnaires distributed through two ways: online survey
and field survey. An online survey was done to MBA/MBS passed out
students in last five years who are working at different part of Nepal by
using data base provided by different colleges/universities. Total of 300
respondents were approached during 30 days period of March/April 2019.
112 responses were received from the online survey and recorded in SPSS
for further analysis. On the other hand, a field survey was conducted and
distributed in Tribhuvan, Kathmandu, Pokhara and Purbanchal Universities’
MBS/MBA students and their faculties. The distribution was for 1,000
questionnaires and 728 were collected during 30 days of March/April 2019.
From collected questionnaires,
24 questionnaires were rejected and 704 questionnaires were valid and
recorded. Therefore, the total valid questionnaires were 816 which used in
this study for analysis.
Reliability assessment was done by using Cronbach’s alpha (α =
0.907) and average inter-item correlation coefficient (r = 0.227) of 33 test
items. Despite having ideal values, Cronbach’s alpha also analyzed if item
deleted. None of the item was found to delete. Thus, all 33 test items
retained in the study. Table 1 presented the analytical result for the
reliability statistics of each construct.
Table 1: Reliability statistics
Average
Cronbach's No of
Construct inter-item Name of the items
Alpha items
correlation
Price and service quality 0.647 0.389 VAR_ 8, 9, 10 3
Friendly and responsive VAR_11, 12, 15, 20 4
0.717 0.383
services
Facilities and effective VAR_13, 14, 16, 21 4
0.278
communication 0.605
Brand and loyalty 0.682 0.303 VAR_17, 18, 19, 22, 26 5
Corporate social VAR_23, 24, 25, 27, 28, 29, 7
0.820 0.391
responsibility 30
Network and coverage 0.825 0.542 VAR_31, 32, 33, 34 4
Customer care and VAR_35, 36, 37, 38, 39, 40 6
0.774 0.365
innovation
Total no of test-items 33
TRIBHUVAN UNIVERSITY JOURNAL, VOL. 33, NO. 2, DECEMBER, 6
The reliability statistics showed that four constructs had good
values of alpha i.e. 0.7 or higher as suggested by Nunnally (1993) and three
constructs had acceptable values of alpha i.e. 0.6 or higher as suggested by
McKinley et al. (1997). In addition, all the constructs except network and
coverage had good average inter-item correlation coefficient and fallen in the
ideal range of 0.15 to
0.50 as suggested by Clark and Watson (1995). The study had adequate
sample size since the Kaiser-Meyer-Olkin (KMO) value of 0.908 from 33
test items was greater than threshold value of 0.5 as recommended by Kaiser
(1974). The significant value of Bartlett’s test of sphericity (8703.311, df =
528, p = 0.000) indicated that the variables had some correlations to each
other.
ANALYSIS AND RESULTS
This study was the customer evaluation of Nepalese mobile
telecommunication service in terms of whether that has met their needs
and expectations. To accomplish the objectives of the study, primary data
were collected through structured questionnaire from 816 mobile phone
users of Nepal Telecom and Ncell. The customers were 430 (52.7 %) from
Nepal Telecom and 386 (47.3 %) from Ncell. As per the sample framed, the
occupational background of the respondents was: students (53.9 %),
service holders (42.2%), business person (2.6%) and freelancer (1.3%).
The study ensured almost equal participation of male and female, having
with different age groups and from all 7 provinces of Nepal. The study
showed that around 45 % of Nepalese cell phone subscribers used both
companies’ services. With respect to connection type, more than 80 %
subscriber preferred pre-paid service, 10 % preferred post-paid and about
10 % used both post-paid and pre- paid services. Nearly 7 % Nepalese
customers have fewer years of experience (less than 5 years) on mobile
phone service.
This study examined the results of developing and testing the
constructs by comparing the theoretical measurement model against reality, as
represented by sample. A standard multiple regression was performed
between overall customer satisfaction as the dependent variable with price
and service quality, friendly and responsive services, facilities and
effective communication, brand and loyalty, corporate social responsibilities,
network and coverage, and customer care and innovation as independent
variables. Table 2 showed the model summary and Table 3 showed
analysis of variance of the model. The adjusted multiple correlation was
significantly different from zero (F = 158.441, p > .001) and 57.5 % of the
variation in the dependent variable was explained by the set of independent
variables. Table 4 and Figure 2 reported overall model of the study.
6 CUSTOMER SATISFACTION IN NEPALESE CELLULAR

Table 2: Model summary of customer satisfaction


Model R R Square Adjusted R Square
Std. Error of the
Estimate
0.761 0.579 0.575 0.44575
Predictors: (Constant), Price and service quality, Friendly and responsive
services, Facilities and effective communication, Brand and
loyalty, Corporate social responsibilities, Network and coverage,
Customer
care and innovation
Dependent variable: Customer satisfaction
Table 3: ANOVA result of customer satisfaction
Model Sum of df Mean square F Sig.
squares
Regression 220.365 7 31.481 158.441 0.000
Residual 160.542 808 0.199
Total 380.907 815
Dependent variable: Customer satisfaction
Predictors: (Constant), Price and service quality, Friendly
and responsive services, Facilities and effective
communication, Brand and loyalty, Corporate social
responsibilities, Network and coverage, Customer care
and innovation
Table 4: Regression coefficients of overall customer satisfaction
Unstandardized Standardized Part Remarks
Model Coefficients coefficients t-value Sig. corr. VIF on
B S.E Beta sq. (sr2) hypothesis
(Constant) 0.521 0.114 4.580 0.000 -
Price and .0064 1.488 Accepted
service quality 0.075 0.022 0.097 3.493 0.001

Friendly and
responsive -0.003 0.025 -0.003 -0.114 0.909 -.0001 1.752 Rejected
services
Facilities
and effective 0.028 0.026 0.031 1.079 0.281 .0006 1.589 Rejected
communication
Brand and .0210 1.779 Accepted
loyalty 0.182 0.029 0.193 6.347 0.000
Corporate social
responsibilities 0.194 0.023 0.231 8.611 0.000 .0841 1.376 Accepted
Network and .0121 1.314 Accepted
0.090 0.019 0.126 4.824 0.000
coverage
Customer care
0.333 0.026 0.368 12.576 0.000
and innovation .0824 1.644 Accepted

Dependent variable: Customer Satisfaction


Regression equation: Y = β 0 + β 1 X1 + β 2 X2 + β 3 X3 + β 4 X4 + β 5 X5 + β 6 X6 + β 7 X7 + ε
TRIBHUVAN UNIVERSITY JOURNAL, VOL. 33, NO. 2, DECEMBER, 6

Figure 2: The regression model

Regression equation for the study,


Y = β 0 + β 1 Price and service quality + β 2 Friendly and responsive services
+ β 3 Facilities and effective communication + β 4 Brand and loyalty
+ β 5 Corporate social responsibilities + β 6 Network and coverage
+ β 7 Customer care and innovation + ε
Customer satisfaction,
Y = 0.521+ 0.075Price and service quality–0.003Friendly and responsive services
+ 0.028Facilities and effective communication+0.182Brand and loyalty
+ 0.194 Corporate social responsibilities + 0.090 Network and coverage
+ 0.333 Customer care and innovation + ε
As presented in Table 4 and Figure 2, all the independent
variables except friendly and responsive services, and facilities and
effective communication were found to be uniquely and significantly
contribute to the prediction of customer satisfaction in Nepalese mobile
telecommunication services. The main contributor independent variables
were price and service quality (sr2 = 0.0064, t = 3.493, p = 0.001), brand
and loyalty (sr2 = 0.0210, t = 6.347, p = 0.000), corporate social
responsibilities (sr2 = 0.0841, t = 8.611, p = 0.000), network and coverage
(sr2 = 0.0121, t = 4.824, p = 0.000) and customer care and innovation (sr2 =0
.0824, t = 12.576, p = 0.000). Five set of independent variables out of seven
were significantly related to the dependent variable. The Table 4 also
examined that there was no problem of multi-collinearity as the observed
values were well below 10.0 for each variable. The study did not
6 CUSTOMER SATISFACTION IN NEPALESE CELLULAR

accept that the constructs friendly and responsive services (sr2 = -0.0001, t =
- 0.114, p = 0.909), and facilities and effective communication (sr2 = 0.0006,
t = 1.079, p = 0.281) had significant contribution towards customers
satisfaction in Nepalese mobile telecommunication services.
DISCUSSION AND CONCLUSION
Literature review of the study identified seven major constructs as
the determinants of the customer satisfaction in mobile telecommunication
service. Out of seven constructs, five constructs: price and service quality,
brand and loyalty, corporate social responsibilities, network and coverage,
and customer care and innovation were observed as determinant factors
that affect customer satisfaction in Nepalese mobile telecommunication
services. The study did not accept the factors: friendly and responsive
service, and facilities and effective communication as the determinants of
customer satisfaction in Nepalese mobile telecommunication services
though they were significant on the various previous studies (Kim, Park &
Jeong 2004, Sanchez & Iniesta 2004).
Studies showed that price perceptions directly influence
satisfaction judgments as well as indirectly through perceptions of price
fairness (Herrmann et al. 2007). In consistent with the past studies (Martin-
Consuegra et al. 2007, Hermann et al., 2007, Saha et al. 2016), customer
satisfaction with Nepalese mobile telecommunication service was closely
related with fair price, service quality and service reliability (β = 0.097, P =
0.001, AVE = 0.462). In the line of the previous studies (Martensen et al.
2000, Gupta 2002, Santouridis & Trivellas, 2010, Moreira, Silva &
Mountinho 2017), brand image and loyalty (β
= 0.193, p = 0.000, AVE = 0.286) had significant effect on customer
satisfaction with Nepalese mobile telecommunication services. The brand
image and loyalty were shaped mainly by: recommending products, price
tolerance, trust, entertainment, and brand image.
Business is a part of society; social responsiveness of service
provider creates positive soft corner in the inner mind of the customer and
leads greater satisfaction. This study proved that ‘corporate social
responsibilities’ was one of the major determinants of customer satisfaction
(β = 0.231, p = 0.000, AVE
= 0.408) with Nepalese mobile telecommunication services. Signal quality
and network coverage have always been essential criteria for selecting
mobile telecommunication service providers. Surveys have shown that
both signal quality and network coverage affect consumer’s satisfaction
positively and the image of the company (Woo & Fock 1999). In consistent
with such previous
TRIBHUVAN UNIVERSITY JOURNAL, VOL. 33, NO. 2, DECEMBER, 6
studies, the factor ‘network and coverage’ was one of the significant factors
(β = 0.126, p = 0.000, AVE = 0.614) of customer satisfaction of Nepalese
mobile telecommunication services too. Customer care and innovation
satisfy customers by converting the invention or idea into product/service
and improved firm value at acceptable risk (Dotzel et al. 2013). So, the
factor ‘customer care and innovation’ was one of the significant factors (β =
0.368, p = 0.000, AVE
= 0.359) of customer satisfaction of Nepalese mobile telecommunication
services having with the highest importance.
In conclusion, the study enriches to the literature by providing
some insight into the benefits associated with exploring factors that affect
customer satisfaction in Nepalese cellular networks industry. As per the
stakeholder theory’s guideline, the study supports to treat them well and
manage for their interest, helps a firm to create values along several
dimensions.
LIMITATIONS AND IMPLICATIONS
It was very difficult to survey the research exhaustively. So, this
study cited representative research rather than attempting to be exhaustive.
The reliability of the findings may be contingent on the number of participants
could have been enhanced further by a larger sample. A larger sample size
for the analytical survey would have augmented the validity and
generality of the findings. The findings of this study provide helpful
guidelines for Nepalese mobile telecommunication industry in
understanding key drivers and offer valuable information regarding
strategic areas in the field of customer satisfaction.
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