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Consumer switching intentions for telecoms services: evidence from Ireland
1Economic and Social Research Institute, Dublin and Department of Economics, Trinity College Dublin, Ireland.
Heliyon
|June 7, 2018
Summary
Many consumers resist switching telecoms providers due to loyalty and behavioral barriers. Significant bill shock or expected gains over 20% are needed to overcome this inertia, indicating complex switching dynamics.
Area of Science:
- Consumer Behavior
- Telecommunications Market Analysis
Background:
- Despite market liberalization, consumer switching in telecommunications remains low.
- Understanding factors influencing consumer switching is crucial for market competition.
Purpose of the Study:
- To investigate consumer and service characteristics influencing switching intentions in fixed-line broadband, mobile, and landline telephony markets.
- To identify key drivers and barriers to consumer switching behavior.
Main Methods:
- Utilized survey data from ComReg (Ireland's National Regulatory Authority) from 2015.
- Analyzed a comprehensive set of personal and service characteristics, controlling for bill shock and expected gains.
Main Results:
- Long-standing, non-switching customers exhibit strong resistance to switching.
- Bill shock and expected gains (especially >20%) significantly increase switching intention.
- Socioeconomic, supplier, and usage characteristics have minor and inconsistent effects across markets.
Conclusions:
- Consumer switching behavior is complex and context-dependent, not solely determined by demographics.
- Behavioral barriers necessitate substantial incentives to overcome inertia in telecoms markets.
- Findings support theories of fairness preference and behavioral economics in consumer choices.
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