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Analysis of consumer preferences for mobile telecom plans using a discrete choice experiment

Author

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  • Confraria, João
  • Ribeiro, Tiago
  • Vasconcelos, Helder

Abstract

In this paper, we present a study of consumer preferences for mobile telecommunications plans and operator characteristics. The objective of the study was to identify consumer preferences for the following characteristics of mobile plans: the importance of using the same provider as friends and family (calling club network effects), the market share of the provider (pure network effects), the length of the commitment period, monthly fee/recharge obligations and per minute call charges for calls made within and outside the provider network. A discrete choice experiment was used as a preference elicitation method and implemented in face-to-face interviews. We present results regarding willingness to pay for the described features as well as their relationship to socio-demographic variables. Consumers are willing to pay 1.3 Euro per month more to reduce the commitment period from 1 year to 6 months and willing to pay 2.5 euros per month more to be part of a larger network. Consumers are also twice as much more sensitive to within-network price variations than extra-network price variations. These results remain unchanged in the sub-sample of those that have internet access suggesting that a web-based surveys are capable of producing unbiased results. The implications of these results for regulatory policy are discussed.

Suggested Citation

  • Confraria, João & Ribeiro, Tiago & Vasconcelos, Helder, 2017. "Analysis of consumer preferences for mobile telecom plans using a discrete choice experiment," Telecommunications Policy, Elsevier, vol. 41(3), pages 157-169.
  • Handle: RePEc:eee:telpol:v:41:y:2017:i:3:p:157-169
    DOI: 10.1016/j.telpol.2016.12.009
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    Cited by:

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    2. Uner, M.Mithat & Guven, Faruk & Cavusgil, S.Tamer, 2020. "Churn and loyalty behavior of Turkish digital natives: Empirical insights and managerial implications," Telecommunications Policy, Elsevier, vol. 44(4).
    3. Martins, Lurdes & Szrek, Helena, 2019. "The impact of the decision environment on consumer choice of mobile service plans: An experimental examination," Utilities Policy, Elsevier, vol. 56(C), pages 20-32.
    4. Gelmar García-Vidal & Alexander Sánchez-Rodríguez & Reyner Pérez-Campdesuñer & Rodobaldo Martínez-Vivar, 2019. "Consumer Preferences for Local Chocolate Consumption. Implications from Market Segmentation at Ecuador," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 9(4), pages 1-12, April.
    5. Gelmar García-Vidal & Alexander Sánchez-Rodríguez & Reyner Pérez-Campdesuñer & Rodobaldo Martínez-Vivar, 2019. "Consumer Preferences for Local Chocolate Consumption. Implications from Market Segmentation at Ecuador," International Journal of Business and Social Research, LAR Center Press, vol. 9(4), pages 1-12, April.

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    More about this item

    Keywords

    Stated preference survey; Discrete choice experiments; Network effects; Experimental design;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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