Thesis TELECOM MOBILE SECTOR Preetkanwal

AN EMPIRICAL STUDY OF TRUST AND COMMITMENT
IN CELLULAR USERS OF SELECTED TELECOM

SERVICE PROVIDERS
A THESIS
Submitted to the
FACULTY OF BUSINESS MANAGEMENT & COMMERCE
PANJAB UNIVERSITY, CHANDIGARH
for the degree of
DOCTOR OF PHILOSOPHY
2007
PREET KANWAL
UNIVERSITY BUSINESS SCHOOL

PANJAB UNIVERSITY, CHANDIGARH
ACKNOWLEDGEMENTS
I consider it pleasure and privilege to pay regards and thanks to Dr. Suresh
Kumar Chadha, Professor, University Business School, Panjab University,
Chandigarh who supervised this work with critical insight and intellectual
acumen. Under his guidance, it always looked within my reach. In fact, without his
critical suggestions, encouragement and co-operation, this thesis would have not
touched its zenith.
I thank Prof. S.C. Vaidya, Chairman, University Business School, Panjab
University, Chandigarh and other members of the teaching faculty of this
department for their help and co-operation.
I am also thankful to Dr. Satish Kapoor, Dean, Faculty of Business
Management and Commerce for his support.
My thanks are also due to Sh. S.S. Bedi, Librarian in providing references
on the subject. As also to other members of non-teaching staff of the department for
their help.
I am also grateful to Dr. S.K. Sharma, Chairman, Department of Statistics,
who lent me his expertise at the time of analysis of data.
I would also acknowledge the help provided by subscribers, dealers and
telecom service providers in providing precious data and suggestions.
I express my gratitude to my parent in-laws and parents who motivated me
to carry my research to its culmination. This work couldn’t have been completed
without their blessings and encouragement.
I owe very special thanks to my husband, Narinder, for his unstinted
support and inspiration. I am thankful to my little kids, Hargun and Guragam, for
understanding the hard work involved in the research and bearing with me.
I am also thankful to M/s Kaizen Graphics for typing the thesis.
Above all, I am grateful to Almighty, without Whose grace I would not have
succeeded.
Preet Kanwal
TABLE OF CONTENTS
Acknowledgements
List of Tables
List of Figures
List of Abbreviations
CHAPTER – 1: INTRODUCTION
1.1 INTRODUCTION 1
1.2 GROWTH OF INDIAN TELECOM SECTOR: AN OVERVIEW 3
1.3 TRUST AND COMMITMENT AND TELECOM SECTOR 11
1.4 RATIONALE OF TRUST AND COMMITMENT 19
1.5 RESEARCH OBJECTIVES 20
1.6 TRUST AND COMMITMENT MODEL OF THE RESEARCH STUDY 20
1.6.1 Shared Value 21
1.6.2 Communication 22
1.6.3 Opportunistic Behaviour 23
1.6.4 The Consequence of Trust –Relationship Commitment 24
1.7 PROPOSED MODEL AND HYPOTHESES 25
1.8 NEED AND SIGNIFICANCE OF STUDY 28
1.9 RESEARCH METHODOLOGY 30
1.9.1 Research Problem 30
1.9.2 Scope of Study 30
1.9.3 Selection of Services 30
1.9.4 Questionnaires 30
1.9.5 Sample Design and Sample Size 30
1.9.6 Methods of Data Collection 31
1.9.7 Limitations of the Study 32
1.9.8 Analysis of Data 32
1.10 CHAPTER PLAN 38
CHAPTER – 2: REVIEW OF LITERATURE
2.1 BRIEF OVERVIEW 46

2.2 STUDIES RELATED TO GROWTH AND DEVELOPMENTS IN 46
INDIAN TELECOM SECTOR
2.2.1 Studies Related to Technology Upgradation in Telecom Sector 52
2.2.2 Studies on Investment Policy of Telecom Sector 54
2.2.3 Studies Relating to Competition in Indian Telecom Service Sector 55
2.3 TRUST AND COMMITMENT IN SERVICES SECTOR 56
2.4 IDENTIFICATION OF RESEARCH GAPS IN LITERATURE 74
2.4.1 Research gaps related to Indian Telecom Sector 74
2.4.2 Research Gaps Related to Trust and Commitment 75
CHAPTER – 3: GROWTH OF INDIAN TELECOM SECTOR
3.1 INTRODUCTION 76
3.2 GLOBAL TELECOM INDUSTRY: AN OVERVIEW 76
3.3 TRENDS IN INDIAN TELECOM INDUSTRY 78
3.4 TRANSITION OF INDIAN TELECOM INDUSTRY 80
3.4.1 Objectives of the National Telecom Policy 82
3.4.2 Telecommunication Services 83
3.4.3 Revenue Analysis 84
3.4.4 Teledensity 85
3.4.5 Value Added Services 86
3.4.6 Village Telephones 87
3.4.7 Thrust on broadband, high-speed Internet 87
3.4.8 Growth in Telecom manufacturing 88
3.4.9 Broadcasting sector 88
3.5 PRIVATIZATION AND DISINVESTMENTS OF BASIC SERVICES 88
3.6 FOREIGN DIRECT INVESTMENT (FDI) 91
3.7 FUTURE GROWTH OPPORTUNITIES OF INDIAN TELECOM SECTOR 93
3.8 GROWTH OF TELECOM SECTOR IN PUNJAB 97
3.9 LEADING PLAYERS OF INDIAN TELECOM INDUSTRY 98
3.9.1 Airtel 101
3.9.2 Tata Teleservices Limited 102
3.9.3 Hutchison Essar Limited 105
3.9.4 Reliance Infocomm Limited 106
3.10 CONCLUSION 107
CHAPTER – 4: A CONCEPTUAL FRAMEWORK OF TRUST

AND COMMITMENT
4.1 INTRODUCTION 108

4.1.1 Concept of Trust and Commitment 111
4.2 DISCRETE VS. RELATIONAL EXCHANGE 114
4.3 THE RELATIONSHIP DEVELOPMENT PROCESS 116
4.4 TRUST AND COMMITMENT AS KEY MEDIATING VARIABLES 119
4.5 CATEGORIES OF TRUST 120
4.6 TRUST AND PROFITABILITY 122
CHAPTER – 5: RESEARCH FINDINGS OF THE STUDY
5.1 BRIEF OVERVIEW 124

5.2 RELIABILITY FOR DATA COLLECTED FROM SUBSCRIBERS 124
5.3 RELATIONSHIP BETWEEN KEY-MEDIATING VARIABLES OF PREPAID 125
AND POSTPAID SUBSCRIBERS OF SELECTED TELECOM SERVICE
OPERATORS
5.4 THE EMPIRICAL TEST 133
5.4.1 Reliability Analysis - Scale (Alpha) for Key Mediating Variable - 133
Shared Value
5.4.1.1 Results for Shared Value between Service Provider 133
and Prepaid and Postpaid Subscribers
5.4.1.2 Results of Prepaid and Postpaid Subscribers and City-Wise 136
Results for Shared Value
5.4.1.3 Results of Shared Value and its Dimensions for City-Wise and 140
Telecom Service Operator-Wise
5.4.1.4 Results of Telecom Service Provider-Wise, City-Wise and 144
Service-Wise Results of Shared Value
5.4.3 Reliability Analysis - Scale (Alpha) for Key Mediating Variable 147
Communication
5.4.3.1 Results for Communication between Service Provider 147
and Prepaid and Postpaid Subscribers
5.4.3.2 Results of Prepaid and Postpaid Subscribers and 150
City-Wise Results for Communication
5.4.3.3 Findings of a Comparison of City-Wise and Telecom Service 154
Provider-Wise Results of Communication
5.4.3.4 Results of Telecom Service Provider-Wise, City-Wise 159
and Service-Wise Results of Communication
5.4.5 Reliability Analysis – Scale (Alpha) for Key Mediating Variable 162
Opportunistic Behavior
5.4.5.1 Results for Opportunistic Behaviour between Telecom 163
Service Providers and Prepaid and Postpaid Subscribers
5.4.5.2 Results for Opportunistic Behaviour between Selected 166
Cities and Prepaid and Postpaid Subscribers
Cities and Telecom Service Providers (TSP)
5.4.5.4 Results for Opportunistic Behaviour between Prepaid 173
and Postpaid Subscribers, Selected Cities and Telecom
Service Providers (TSP)
5.4.6 Reliability Analysis - Scale (Alpha) for Key Mediating Variable-Trust 177
5.4.6.1 Results for Opportunistic Behaviour between Prepaid and 178
Postpaid Subscribers and Telecom Service Providers (TSPs)
5.4.6.2 Results for Trust between Selected Cities and Prepaid 180
and Postpaid Subscribers
5.4.6.4 Results for Trust between Selected Cities, Prepaid and 187
Postpaid Subscribers and Telecom Service Providers (TSPs)
5.4.7 Reliability Analysis - Scale (Alpha) for Key Mediating Variable 190
Relationship Commitment
5.4.7.1 Results for Relationship Commitment between Selected 191
Cities and Prepaid and Post Paid Subscribers
5.4.7.2 Results for relationship commitment between Prepaid 193
and Postpaid subscribers Selected Cities
Cities, Prepaid & Postpaid Subscribers and Telecom
Service Providers (TSP)
5.4.7.5 Results of β Values of Reliance 204
5.4.7.6 Results of β Values of Airtel 206
5.4.7.7 Results of β Values of Hutch 208
5.4.7.8 Results of β Values of Tata Indicom 210
5.4.7.9 Results of β Values of Prepaid Subscribers 212
5.4.7.10 Results of β Values of Postpaid Subscribers 214
5.4.7.11 Results of β Values of Combined Prepaid and Postpaid 216
Subscribers
5.5 SOCIO DEMOGRAPHIC PROFILE OF SUBSCRIBERS 234
5.6 RESEARCH FINDINGS OF DATA COLLECTED FROM DEALERS 240
5.7 RESEARCH FINDINGS OF TELECOM SERVICE PROVIDERS 247
5.8 IMPACT OF TRUST AND COMMITMENT IN TELECOM SECTOR 255
CHAPTER – 6: SUMMARY, SUGGESTIONS AND RECOMMENDATIONS
6.1 INTRODUCTION 257

6.2 NEED AND SIGNIFICANCE OF STUDY 257
6.3 RESEARCH OBJECTIVES OF THE STUDY 259
6.4 RESEARCH METHODOLOGY 259
6.5 SUMMARY OF THE FINDINGS 260
6.5.1 Growth of Indian Telecom Sector 260
6.5.2 Trust and Commitment as Key Mediating Variable 263
6.5.3 Impact of Trust and Commitment in Indian Telecom Sector 264
6.6 DISCUSSIONS OF THE FINDINGS 265
6.7 MANAGERIAL IMPLICATIONS 267
6.8 LIMITATIONS OF THE STUDY 269
6.9 DIRECTIONS FOR FUTURE RESEARCH 269
6.10 CONCLUSION 270
BIBLIOGRAPHY 271-294
APPENDICES i-xiv
ANNEXURE – I: LIST OF SERVICE PROVIDERS

ANNEXURE – II: QUESTIONNAIRE FOR SUBSCRIBER
ANNEXURE – III: QUESTIONNAIRE FOR DEALERS
ANNEXURE – IV: QUESTIONNAIRE FOR TELECOM SERVICE PROVIDER
LIST OF FIGURES
Figure Title Page

No. No.
1.1 Major Developments in Indian Telecom Industry during 1986-2006 5
1.2 Trend Exhibited by Subscriber Base, Traffic and Average Revenue 7
Per User (ARPU) during (2000 – 2006)
1.3 Growth for GSM vs. CDMA Subscribers for the Period 10
of 1999-2006
1.4 Operator-wise Market Share of GSM Mobile as on 30.9.2006 10
1.5 Operator-Wise Market Share of CDMA Mobile as on 30.9.2006 11
1.6 Trust and Commitment Model of the Research Study 26
3.1 Regulatory Bodies of Indian Telecom Industry 80
3.2 A comparison of Private and Public Sector Undertaking Subscriber 89
base for the period (1998-2006)
4.1 Discrete Forms of Relationship Marketing 114
4.2 The Hypothesized Realm of Buyer Seller Relationship 116
4.3 Stages in buyer and seller relationship development 117
4.4 Benefits of Loyal Customers 120
5.1 Results of Reliance 204
5.2 Results of Airtel 206
5.3 Results of Huch 208
5.4 Results of Tata Indicom 210
5.5 Results of Prepaid Subscribers 212
5.6 Results of Postpaid Subscribers 214
5.7 Results of Combined Prepaid and Postpaid Subscribers 216
5.8 Purposes of Mobile Usage 220
5.9 Different Mobile Services between Prepaid and Postpaid Subscribers 222
5.10 Considerations Prior to Purchase Decision for a Mobile Service 225
Provider
5.11 Evaluation of Service Providers’ Touch Points 227
5.12 Evaluation of Customer Care services for Selected Mobile Service 229
Provider
5.13 Evaluation of Service Quality 232
5.14 Satisfaction Level of Network Quality 232
5.15 Age-Wise Composition of Prepaid and Postpaid Subscribers 234
5.16 Occupation-Wise Composition of Prepaid and Postpaid Subscribers 235
5.17 Gender-Wise Composition of Prepaid and Postpaid Subscribers 236
5.18 Income-Wise Composition of Prepaid and Postpaid Subscribers 237
Figure Title Page
No. No.
5.19 Experience-Wise Composition of Prepaid and Postpaid Subscribers 238
5.20 Time-Spent on Mobile-Usage of Subscribers Amongst Selected Cities 239
5.21 Dealership of Telecom Operators 241
5.22 Evaluation of Company’s Directions with to Dealers 241
5.23 Dealers’ Participation in Marketing Decisions 242
5.24 Customer Feedback and After Sale Service 243
5.25 Effectiveness of Product Strategy 245
5.26 Effectiveness of Price Strategy 245
5.27 Compensation and Seller Support 246
5.28 Telecom Service Providers’ Collaboration 247
5.29 Telecom Service Provider and Call Line Identification Services 248
5.30 Methods of marketing of products 254
LIST OF TABLES
Table Title Page

No. No.
1.1 Mobile Subscribers (GSM and CDMA) as %of Basic Subscribers in 6
India – March, 2000 to March, 2006
1.2 Performance of Mobile Service Providers from 2000-2006 7
1.3 List of Cellular (GSM & CDMA) Service Providers in Operation as on 9
31st March, 2006
1.4 Categories of Trust 15
1.5 List of Variables and Measures 25
1.6 Prepaid vs. Postpaid Subscribers 31
1.7 City Wise Prepaid and Postpaid Subscribers 32
1.8 Summary Statistics and Reliability Estimates 33
for the Model Constructs
1.9 ANOVA Table 34
2.1 Drivers of the New Telephony 75
3.1 Cellular Tariffs across South – Eastern Countries 78
3.2 Subscriber Base of Fixed and Wireless Services as on Feb,2007 78
3.3 Indian Telecom Services at a Glance (FY 2006-07) 84
3.4 Average Revenue Per User (ARPU) (Rupee / per month during the 85
quarter)
3.5 Service-wise Actual Inflow of FDI upto March 2006 (in millions) 92
3.6 Potential of Indian Telecom Industry 96
3.7 Subscriber Base of GSM Service Providers for the period 2004-2006 99
3.8 Subscriber Base of CDMA Operators for the period 2004-06 99
3.9 Coverage of Leading Mobile Service Providers 101
5.1 Evaluation of Relationship between Key Mediating Variables of 125
Reliance Prepaid Subscribers
5.2 Evaluation of Relationship between Key Mediating Variables of Airtel 126
Prepaid Subscribers
5.3 Evaluation of Relationship between Key Mediating Variables of Hutch 127
Prepaid Subscribers
5.4 Evaluation of Relationship between Key Mediating Variables of Tata 128
Indicom Prepaid Subscribers
5.5 Evaluation of Relationship between Key Mediating Variables of 129
Reliance Postpaid Subscribers
5.6 Evaluation of Relationship between Key Mediating Variables of Airtel 130
Postpaid Subscribers
5.7 Evaluation of Relationship between Key Mediating Variables of Hutch 131
5.8 Evaluation of Relationship between Key Mediating Variables of Tata 132
Indicom Postpaid Subscribers
5.9 Two way ANOVA for Service Provider and Prepaid and Postpaid 134
Subscribers
Table Title Page
No. No.
5.10 Comparison of Shared Value and its Dimensions for Reliance 134
Subscribers
5.11 Comparison of Shared Value and its Dimensions for Airtel Subscribers 135
5.12 Comparison of Shared Value and its Dimensions for Hutch Subscribers 135
5.13 Comparison of Shared Value and its Dimensions for Tata Indicom 136
Subscribers
5.14 Two Way ANOVA for Selected Cities and Prepaid and Postpaid 137
Subscribers
5.15 Multiple Comparisons (Selected Cities) 138
5.16 Comparison of Prepaid and Postpaid Subscribers for Shared Value and 138
its Dimensions in Ludhiana City
its Dimensions in Amritsar City
its Dimensions in Chandigarh City
5.19 Two Way ANOVA for Selected Cities and Telecom Service Providers 141
5.21 One-Way ANOVA - Ludhiana and Telecom Service Provider 142
5.22 Multiple Comparison for Shared Value between 142
Telecom Service Providers for Ludhiana City
5.23 One-Way ANOVA - Amritsar and Telecom Service Providers 142
5.24 Multiple Comparison for Shared Value between Telecom Service 143
Providers for Amritsar City
5.25 One-Way ANOVA – Patiala and Telecom Service Providers 143
5.26 Multiple Comparisons for Shared Value between Telecom Service 143
Providers for Patiala City
5.27 One-Way ANOVA – Chandigarh and Telecom Service Providers 144
Providers for Chandigarh City
5.29 Multiple Factor ANOVA for Prepaid and Postpaid Subscribers, Selected 146
Telecom Provider and Selected Cities
5.30 Comparison of Shared Value its Dimensions for Amritsar Hutch 146
5.31 Comparison of Shared Value its Dimensions for Amritsar Tata Indicom 147
5.32 Two-Way for ANOVA Service Provider and Prepaid and Postpaid 148
Subscribers
5.33 Comparison of Communication and its Dimensions for Reliance 149
5.34 Comparison of Communication and its Dimensions of Hutch 149
5.35 Comparison of Communication and its Dimensions for Tata Indicom 150
5.36 Two way ANOVA Prepaid and Postpaid Subscribers and Selected 151
Cities
5.38 Comparison of Communication and its Dimensions for Ludhiana City 152
5.39 Comparison of Communication and its Dimensions for Amritsar City 153
5.40 Comparison of Communication and its Dimensions for Chandigarh City 153
Table Title Page
No. No.
5.41 Two Way ANOVA for Selected Telecom Provider and 155
Selected Cities
5.43 One-Way ANOVA for Ludhiana and Selected Telecom Service 156
Providers
5.44 Multiple Comparisons for Communication between Telecom Service 156
Providers for Ludhiana City
5.45 One-way ANOVA for Amritsar and Selected Telecom Operators 157
Providers for Amritsar City
5.47 One-Way ANOVA: Patiala and Selected Telecom Operators 157
5.49 One Way ANOVA: Chandigarh and Selected Telecom Operators 158
Providers for Chandigarh City
5.51 Multi-factor ANOVA for Selected Telecom Provider, Prepaid and 160
Postpaid and Selected Cities
5.52 Comparison of Communication and its Dimensions for Reliance 161
Ludhiana
5.53 Comparison of Communication and its Dimensions for Airtel Ludhiana 161
5.54 Comparison of Communication and its Dimensions for Hutch Amritsar 161
5.55 Comparison of Communication and its Dimensions for Tata Indicom 162
Amritsar
5.56 Comparison of Communication and its Dimensions for Reliance Patiala 162
5.57 Comparison of Communication and its Dimensions for Airtel 162
Chandigarh
5.58 Two-way ANOVA for Prepaid and postpaid subscribers and Selected 163
Telecom Provider
5.59 Comparison of Opportunistic Behaviour and its Dimensions for Reliance 164
5.60 Comparison of Opportunistic Behaviour and its Dimensions for Airtel 164
5.61 Comparison of Opportunistic Behaviour and its Dimensions for Hutch 165
5.62 Comparison of Opportunistic Behaviour and its Dimensions for Tata 165
Indicom
5.63 Two Way ANOVA for Prepaid and Postpaid Subscribers and Selected 166
Cities
5.65 Comparison of Opportunistic Behaviour and its Dimensions for Amritsar 167
City
5.66 Comparison of Opportunistic Behaviour and its Dimensions for 168
Chandigarh City
5.67 Two-way ANOVA for Telecom Service Providers and 16
Selected Cities
5.68 One-way ANOVA for Opportunistic Behaviour Ludhiana and Selected 170
Telecom Operators
Table Title Page
No. No.
5.69 Multiple Comparison for Opportunistic Behaviour between 170
5.70 One-way ANOVA for Amritsar and Selected Telecom Operators 170
Telecom Service Providers for Amritsar City
5.72 One Way ANOVA for Patiala and Selected Telecom Operators 171
Telecom Service Providers for Patiala City
5.74 One-way ANOVA for Chandigarh and Selected Telecom Operators 172
Telecom Service Providers for Chandigarh City
5.76 Multiple Factor ANOVA for Telecom Service Providers, Selected Cities 174
and Prepaid and Postpaid Services
5.78 Comparison of Opportunistic Behaviour and its Dimensions for Airtel 175
Ludhiana
Ludhiana
Amritsar
5.81 Comparison of Opportunistic Behaviour and its Dimensions for Tata 176
Indicom Amritsar
5.82 Comparison of Opportunistic Behaviour and its Dimensions for Reliance 177
Patiala
Patiala
5.84 Two Way ANOVA for Selected Service Provider and Prepaid and 178
5.85 Comparison of Trust and its Dimensions for Reliance 179
5.86 Comparison of Trust and its Dimensions for Hutch 179
5.87 Comparison of Trust and its Dimensions for Tata Indicom 180
5.88 Two-way ANOVA for Trust in Selected cities and Prepaid and Postpaid 181
Subscribers
5.90 Comparison of Trust and its Dimensions for Amritsar City 182
5.91 Comparison of Trust and its Dimensions for Patiala City 182
5.92 Comparison of Trust and its Dimensions for Chandigarh City 183
5.93 Two Way ANOVA for Selected Cities and Selected Telecom Service 184
Providers
5.94 One Way ANOVA for Ludhiana and Selected Telecom Operators 185
5.95 Multiple Comparison for Trust between Telecom Service Providers for 185
Ludhiana City
5.96 One Way ANOVA for Amritsar and Selected Telecom 0perators 185
Amritsar City
Table Title Page
No. No.
5.98 One-way ANOVA for Patiala and Selected Telecom 0perators 186
Patiala City
5.100 One Way ANOVA for Chandigarh and Selected Telecom 0perators 187
Chandigarh City
5.102 Multiple Factor ANOVA for Selected Cities, Selected Service Providers 189
and Prepaid and Postpaid Services
5.103 Comparison of Trust and its Dimensions for Reliance Ludhiana 189
5.104 Comparison of Trust and its Dimensions for Airtel Amritsar 190
5.105 Comparison of Trust and its Dimensions for Hutch Amritsar 190
5.106 Two Way ANOVA Prepaid and Postpaid Subscribers and Selected 191
Cities
5.107 Comparison of Relationship Commitment and its Dimensions for 192
Reliance
5.108 Comparison of Relationship Commitment and its Dimensions for Airtel 192
5.109 Comparison of Relationship Commitment and its Dimensions for Hutch 193
5.110 Two Way ANOVA for Prepaid and Postpaid Subscribers and Selected 194
Cities
Amritsar City
5.113 Comparison of Relationship Commitment and its Dimensions for Patiala 196
City
Chandigarh City
5.115 Two Way ANOVA for Selected Telecom Service Providers and 198
Selected Cities
5.116 One Way ANOVA: Ludhiana and Selected Telecom 0perators 199
5.117 Multiple Comparison for Relationship Commitment between 199
5.118 One Way ANOVA: Patiala and Selected Telecom 0perators 199
5.120 Multifactor ANOVA for Prepaid and Postpaid Subscribers, TSPs and 201
Selected Cities
Ludhiana Reliance
Amritsar Airtel
5.123 Comparison of relationship commitment and its dimensions for Amritsar 202
Hutch
Amritsar Tata Indicom
5.125 Effectiveness of Source of Information between Prepaid and Postpaid 218
Subscribers
Table Title Page
No. No.
5.126 Subscription of Other Services of Selected Telecom Operators 218
5.127 Subscription between Prepaid and Postpaid Subscribers 219
5.128 Evaluation of Various Purposes of Mobile Usage 219
5.129 Evaluation of Different Mobile Services between Prepaid and Postpaid 221
Subscribers
5.130 Evaluation of Executive’s Knowledge About the Product 223
5.131 Considerations Prior to Purchase Decision for a Mobile Service 223
Provider
5.132 Evaluation of Awareness of Company’s Offices 226
5.133 Response About Service Providers’ Touch Points 227
5.134 Evaluation of Customer Care Services 228
5.135 Efficient Solution of Query Handling 229
5.136 Effectiveness of After-Sales Services 230
5.137 Evaluation of Service Quality 230
5.138 Evaluation of Satisfaction Level of Network Quality 231
5.139 Evaluation of Correlation between Pre-Purchase and Post-Purchase 233
Behaviour
5.140 Age-Wise Composition of Subscribers 234
5.141 Occupation-Wise Composition of Subscribers 235
5.142 Gender-Wise Composition of Subscribers 236
5.143 Education-Wise Composition of Subscribers Amongst Selected Cities 237
5.144 Income-Wise Composition of Subscribers Amongst 237
Selected Cities
5.145 Experience-Wise Composition of Subscribers Amongst Selected Cities 238
5.146 Time-Spent on Mobile-Usage of Subscribers Amongst Selected Cities 239
5.147 Place-Wise Mobile-Usage of Subscribers Amongst Selected Cities 240
5.148 Dealership of Telecom Operators 240
5.149 Evaluation of Company’s Directions with to Dealers 242
5.150 Evaluation of Dealers 243
5.151 Evaluation of Company’s Product Attributes 243
5.152 Evaluation of Promotional Strategy 246
5.153 Functional Domain of Products and Services 248
5.154 Export of Services 249
5.155 Localisation of Products and Services 249
5.156 Promotional Activities 249
5.157 Effectiveness of Marketing Channels and Distribution Networks 250
5.158 Evaluation of Pre and After-Sale Services 250
5.159 Availability of After-Sale Service Station 251
5.160 Fixation of After-Sale Charges 251
Table Title Page
No. No.
5.161 Customer Care and After-Sale Services 252
5.162 Maintenance of Customer Database 252
5.163 Customer Feedback After Sale Service 252
5.164 Feedback Channels of Telecom Service Providers 253
5.165 Usage of Indian Technology vis-à-vis Foreign Technology 253
5.166 Company’s Policy with regard to Training Programme 254
5.167 Areas of Marketing Strategy 255
ABBREVIATIONS
Abbreviation Expression
GNP Gross National Product
GDP Gross Domestic Product
RBI Reserve Bank of India
ASCON Confederation of Industry Associated Councils
VAS Value Added Services
TRAI Telecom Regulatory Authority Of India
NLD National Long Distance
ILD International Long Distance
ARPU Average Revenue Per User
BSNL Bharat Sanchar Nigam Limited
Hutch Hutchinson Essar Limited
RIM Reliance India Mobile
GSM Global System for Mobile
CDMA Code Division Multiple Access
NTP National Telecom Policy
CPP Calling Party Pays
UAL Unified Access Licensing
ADC Access Deficit Charges
FDI Foreign Direct Investment
LISREL Linear Structural Relationships
GMPCS Global Communication by Satellite
OECD Organization for Economic Cooperation and Development
DEL Direct Exchange Lines
NCAER National Council of Applied Economic Research
3G Third Generation
DoT Department of Telecommunications
SMS Short Message Services
PSUs Public Sector Undertakings
CRM Customer Relationship Management
TQM Total Quality Management
JIT Just-in-time
MRP Material Resource Planning
GAM Global Account Management
ICT Information and Communications Technology
USO Universal Service Obligation
MoC Ministry of Communications
VSNL Videsh Sanchar Nigam Limtied
DTO Department of Telecom Operations
DTS Department of Telecom Services
NET X-25 based Packer Switched Data Network
GPSS Gateway Packet Switched Data Services
GEDIS Gateway Electronic Data Interchange Service
GEMS-400 Gateway E-Mail and Store & Forward FAX Service
CPS Concert Packet Service
VPT Village Public Telephones
CHAPTER – 1
INTRODUCTION
1.1 INTRODUCTION
In the 21st century, the new economy is becoming increasingly customer

centric. In the current marketplace, considerable attention has been paid to the
concept of relationships between service providers and their customers (Barnes,
1997; Gwinner et al., 1998; Reynolds and Arnold, 2000), and this concept has
been enthusiastically embraced by academics and practitioners (Beatty et al.,
1996; Berry, 1995; Reynolds and Arnold, 2000). Both operationally and
theoretically, the word relationship is poorly defined (Bagozzi, 1995). A
relationship may be seen to exist in an operational context, where the
relationship is created through a series of episodes, so that in the buying of a
service at least two encounters are required before a relationship exists
(Liljander and Strandvik, 1995; Storbacka et al., 1994). This position is further
developed by Barnes (1997), who suggests that before a relationship may be
said to exist, both parties must mutually perceive that the relationship exists and
the relationship must be characterized by a special status. Relationships are,
therefore, a series of transactions which build an awareness of a shared
relationship through trust and commitment, among several other factors (Morgan
and Hunt, 1994).
On the surface, there is considerable merit in the idea of a service

company building relationships with its customers. It is in an attempt to increase
the level of trust and commitment that customers feel towards the company
(Sheaves and Barnes, 1996). The higher levels of trust and commitment, in turn,
are associated with higher levels of customer retention and, inevitably,
organisational profitability. However, there is little consideration given to what
actually constitutes a relationship, and even less to how it is practised in
business and other organisations (Barnes, 1997; Sheaves and Barnes, 1996). It
is plausible that a certain interaction may be perceived by some people as a
relationship, while others may perceive the same interaction to be merely an
1
interaction, devoid of the elements that would make up a relationship (Bendapudi
and Berry, 1997). Therefore, the concept of a relationship is highly subjective,
and given the lack of a clear definition of a relationship, it may be useful to
explore the various dimensions of a relationship and address their impact on the
overall quality of a relationship.
A service has been defined as, "any act or performance that one party
can offer to another that is essentially intangible, and does not result in the
ownership of anything..." (Kotler, 2004) Unlike physical products, service
products cannot be seen, tasted, felt, heard, or smelled before they are bought
(Parasuraman et al; 1985; Lovelock, 1981). Since services are intangible,
consumers are often faced with not knowing what to expect of a service until
they have consumed it, and hence perceive services as risky (Murray and
Schlacter, 1990). Further, research has demonstrated that the need for trust
arises in any situation characterized by a high degree of risk, uncertainty, and/or
a lack of knowledge or information on the part of the interaction participants
(Mayer et al., 1995). Thus, customers have an inherent need to trust in their
service provider to deliver the desired service outcome.
Services sector is the fastest growing segment as compared to other

sectors of the Indian economy. A major stimulus in this shift is the movement to
information age spurred by invention of computer and advancements in
telecommunications. As countries continue to shift from agricultural base to
services oreientation, the demand for services further holds huge potential.
Additional factors contributing to the growth of service sector are higher per
capita income, increased time pressure, advances in product technology (Kurtz,
2002), spiralling competition, rise of individualism (Seth & Seth, 2005)
technological advances, globalisation, (Balchandaran, 2004), competition,
greater life expectancy and cost effectiveness drives (Rampal and Gupta, 2002)
and growth of service chains and networks and service quality movement Thus,
tremendous growth of services sector implies the role of marketing in terms of
vast opportunities and implications, marketing opportunities arising from new
2
technology, in franchising from fewer regulations and professional restrictions, in
servicing physical goods and international markets (Lovelock, 1999).
1.2 GROWTH OF INDIAN TELECOM SECTOR: AN OVERVIEW
The service sector growth worldwide has been phenomenal which is

reflected in its increased contribution to Gross Domestic Product (GDP) as well
as employment generation mechanism. Liberalisation, Privatisation and
Globalisation have brought unprecedented changes in the economic, trade, and
industrial scenarios. India is fast moving from a protected economy to an open
market economy and becoming integrated with the world economy. The change
environment has exposed various organizations including the service sector to
the challenges of competition, service quality, cost, and the competitive
environment .It will help organizations to modernize. Some of those unable to
cope with the changes may have to face the consequences of survival of the
fittest.
The Reserve Bank of India (RBI) Annual Report for the year 2005-06
states that services have emerged as the fastest growing sector and has
imparted much of the effect to the overall growth of the economy, particularly in
the times of adverse agricultural shocks and industrial slow-down. Share of
services sector has risen from 41.3 percent in 1995-96 of services (including
construction) the real gross domestic product to 61.2 percent in 2005-06. A
major part of the share in service sector has taken place in trade,
communication, banking and insurance segments.
According to a survey conducted by the Confederation of Industry

Associated Councils (ASCON) in 2006, the three service sectors --- cellular
phone, housing finance and IT services showed the highest growth rates
recently. These services may change from time to time, but what is remarkable
about their growth rates is that many are growing at more than 20 percent a
year, which is far higher than the overall growth in the economy as a whole.
Thus, among these sectors, telecom sector is likely to be the growth engine for
the Indian economy.
3
India, like many other countries of the world, has adopted a gradual
approach to telecom sector reform through selective privatisation and managed
competition in different segments of the telecom market. To begin with, India
introduced private competition in value-added services in 1992 followed by
opening up of cellular and basic services for local area to private competition.
Private competition was also introduced in National Long Distance (NLD) and
International Long Distance (ILD) telephony at the start of the current decade.
The Indian mobile services industry is moving in full swing, be it

investment, subscriber base, technology or Value Added Services (VAS). Also
the industry is coming up with innovative ways to lower their cost of operations.
Apart from this, cut-throat competition in terms of technology as well as among
the service providers has pushed the industry to innovate which has benefited
the ultimate consumer.
Gartner (2006), in its recently global forecast for mobile phones predicted
that mobile phones sales will exceed 1 billion in 2009. Asia/Pacific accounts for
most of the sales. China and India alone will account for nearly 200 million units
in 2007, with the Indian market surpassing China in 2009 to reach 139 million
units. The revenues of Indian cellular markets will reach $ 24 billion by year 2009
recording Compounded Annual Growth Rate (CAGR) of 35.6%. Mobile Value
Added Services (VAS) market in India is estimated at $0.55 billion (2005) and is
expected to grow more than fifteen fold to greater than $9 billion by 2010
(Lehman Brothers, 2006).
India has gone through a period of adjustment over the past 8 years. The
Telecom Regulatory Authority of India (TRAI) was constituted in 1997. It acts as
an independent regulator in this sector. Several progressive measures have
been taken over the past few years. At the time of launch of GSM cellular service
in the country, there were a number of impediments in the form of high handset
costs, exorbitant tariffs, high initial entry/activation charges, Mobile Party Pays
(MPP) regime etc. With the passage of time, these initial barriers have almost
disappeared as on date.
The most important of them that are considered to be landmarks in Indian

Telecom history are given in Figure 1.1.
4
Figure 1.1: Major Developments in Indian Telecom Industry during 1986-2006
Guidelines for
opening up fixed-
Awarded 8 Enhanced and line operations
licences for Announced Transition to separated role of to unlimited
Established cellular services New Telecom revenue sharing TRAE regulatory competition; limited Privatization Lowering of Increase in
MTNL & VSNL in 4 metros Policy (NTP’99) arrangement & appellate Tribunal mobility permitted of VSNL access deficit FDI ceiling
19 86 M ay 94 J an 9 5 Ma r 9 6 Ma r 9 9 J uly 9 9 Oct 9 9 D ec 99 Au g 00 J an 0 1 Jul 0 1 F eb 0 2 A pr i l 03 J u ne 0 4 Apr i l 05 S ep t. 06
Announced Awarded Separated DoT as: Long distance Fourth cellular Policy for Introduction of Introduction of
Telecom policy 33 cellular a) DTO - Service provider policy licenses awarded international CPP regime revenue share
for deregulation and 6 fixed line b) DoT - Policy maker announced. pursuant to a long distance regime
of sector licenses for Incorporated bidding process announced
individual circles BSNL, DTO
coprporation
process initiated
Source: Merrill Lynch, December, 2006.
5
In the pre-reform period, growth in telecom services was primarily driven
by public sector monopoly, showing very marginal growth, as the incremental
tele-density between 1948 and 1998, a 50-year period, was only
1.92%.Telecommunication development in the initial stage of the reforms
process beginning with National Telecom Policy (NTP) in I994, which provided
for migration from fixed license fee to revenue share regime. Cost-Oriented
Telecom Tariffs were also introduced by TRAI in 1999. From 2003 onwards, as a
result of certain pragmatic decisions by the Government and the Regulator, viz.,
introduction of Calling Party Pays (CPP) regime, Unified Access licensing
regime, lowering of access deficit coupled with introduction of revenue share
regime triggered further growth. The incremental growth in the ratio of total
mobile subscribers as a proportion of the basic subscribers has been indicated in
table below:
Table 1.1: Mobile Subscribers (GSM and CDMA) as %of Basic Subscribers
in India – March, 2000 to March, 2006
March, March, March, March, March, March, March,

2000 2001 2002 2003 2004 2005 2006
7.07% 10.94% 16.73% 30.36% 78.64% 113.05% 179.28%
nd
Source: www.trai.gov.in as on 22 Oct, 2006
It is very clear from table 1.1 that the number of mobile subscribers as a
proportion of basic service subscribers continued to increase, which reflects the
global trend. The ratio of mobile subscribers as a proportion of the basic
subscribers has shown tremendous growth of 179.28% for the year 2005-2006
as compare to 7.07% for 2000-01. Further, the performance of mobile service
providers can be studied on the basis of parameters of subscriber base,
teledensity and traffic.
Table 1.2: Performance of Mobile Service Providers from 2000-2006

Year 2000 2001 2002 2003 2004 2005 2006
Indicator
Population (in million) 1016 1032 1048 1069 1088 1108 1130
Subscriber base (in million) 1.90 3.58 6.54 13.0 33.69 52.22 90.14
Tele-density subscriber 100 0.18 0.34 0.62 1.27 3.09 9.08 14.05
Traffic (min of use/sub/month) 197 223 218 225 302 367 443
Source: AUSPI.in as on 15th Nov, 2006
6
From table1.2, following observations can be drawn:
i) Rate of growth in mobile subscriber base has been substantially higher

than growth in population, indicating a rapid proliferation of mobile
telephone and adoption by non-users/first-time users.
ii) Tele-density has also gone up which is reflection of above discussion.
iii) From 2000 to 2006, traffic or usage of mobiles phones increased, but the
increase was not uniform during the period. Till 2003, mobile usage went
up gradually but year 2004 onwards saw an era of speedy increase in
mobile traffic. It was probably because of the reasons that in initial days of
mobile telephony, call rates were high and the number of services offered
by cellular operators was limited. However 2003 onwards, because of the
slashed prices and add-on-services resulted in sudden increased traffic.
Figure 1.2: Trend Exhibited by Subscriber Base, Traffic and Average

Revenue Per User (ARPU) during (2000 – 2006)
500
400 Subscriber base (in

million)
300
Tele-density subscriber
100
200
Traffic (min of
100 use/sub/month)
0
2000 2001 2002 2003 2004 2005 2006
Year
th
Source: www.trai.gov.in as on 15 Nov, 2006
Figure 1.2 exhibits trend of subscriber base, traffic and ARPU for the
period from 2000-2006. The revenue generated by a cellular company is the
resultant of two factors – number of subscribers and the usage rate (traffic).
Although traffic has been showing upward trend but the rate at which the
revenue has been increasing is far less than the rate of growth in subscriber
base and usage. The trend indicates that from 2000-2006, Average Revenue
7
Per User (ARPU) was consistently decreasing which means the revenue
generated through individual connection had been decreasing. This reflects the
decreasing profitability of incremental connections. The reason behind this
paradox is drastic reduction in rental and call rates over the last five years. In
order to woo the customers, companies slashed prices. Today, rental tariffs have
hit the lowest in the world at 40 paise for a local call and Rs.1.99 for an STD call.
Six years ago, mobile users had to pay Rs.16.40 for local calls and Rs.40 per
minute for an STD call. The pre-paid card, which was once sold for Rs.450-500
now costs just 10 paise now in most markets.
Service Providers are Categorised as per service into two parts --- Basic
Service Providers and Value Added Service Providers. Basic service providers
are those who provide mainly voice communication. The subscriber’s connection
to the telecom network is called a Direct Exchange Line (DEL) and people use it
for talking. Basic services can be differentiated as per call destination into
domestic and international. Domestic calls, both local and long-distance are
routed through cables and wireless links. International calls are routed overseas,
mainly through satellite links. The international telecom service providers of
various nations liaison with one another to ensure smooth operations and
efficient call transfer. Major global telecom service providers, mainly private
operators from the developed nations, determine international call tariffs.
Revenue sharing agreements exist between various international carriers. Value
added service providers are those which provide services, such as cellular
telephony, paging, e-mail and VSAT network, which provide the subscriber
greater ease of communication and enhance the utility of basic services network.
After the liberalization of Indian telecom sector in 1994, the Indian cellular
market witnessed a surge in cellular services. In cellular service there are two
main competing network technologies: Global System for Mobile
Communications (GSM) and Code Division Multiple Access (CDMA). With the
advent of cellular phones doing double and triple duty as streaming video
devices, pod cast receivers and email devices, speed is important to those who
use the phone for more than making calls. CDMA has been traditionally faster
than GSM, though both technologies continue to rapidly leapfrog along this path.
In GSM phones, SIM cards are used. The removable SIM card allows phones to
8
be instantly activated, interchanged, swapped out and upgraded, all without
carrier intervention. The SIM itself is tied to the network, rather than the actual
phone and the phones that are card-enabled can be used with any GSM carrier.
CDMA operators require proprietary handsets that are linked to one operator
only and are not card-enabled. To upgrade a CDMA phone, the operator must
deactivate the old phone then activate the new one and the old phone becomes
useless.
By 2004, there were a total of 12 players in the market with the five major
players being Bharti-Tele-ventures Limited (Bharti), Bharat Sanchar Nigam
Limited (BSNL), Hutchinson-Essar Limited (Hutch), Idea, Cellular Limited (Idea),
and Reliance India Mobile (RIM). All the players except RIM offered services
based on the Global System for Mobile (GSM) technology whereas RIM
provided services based on code division Multiple Access (CDMA) technology.
At the end of March, 2006, following operators were providing mobile service
(GSM & CDMA) in the service areas mentioned in Table 1.3 below:
Table 1.3: List of Cellular (GSM & CDMA) Service Providers in Operation as
on 31st March, 2006
S. No. Service Provider No. of Circles

1. BSNL 21
2. Bharti 23
3. Reliance Communications 23
4. Tata Teleservices 20
5. Hutch 16
6. IDEA 8
7. BPL 1
8. Aircel 7
9. MTNL 2
10. Spice Communications 2
11. HFCL 1
12. Shyam Telelink 1
13. Escorts Telecommunications 3
Source: www.dot.com as on 20th March 2007
9
Figure 1.3: Growth for GSM vs. CDMA Subscribers for the Period
of 1999-2006
Figure 1.3 signifies the comparison of the growth trend for GSM and
CDMA subscribers for the period of 1999-2006. On cumulative basis, India has
grown by 73.5% taking the overall tally to 90.8 million subscribers in year 2006
as compare to 1.2 million subscribers in March, 1999. Of this, GSM contributes
76% whereas CDMA contributes 24%. The industry has added 38.5 million
mobile lines i.e. around 3.2 million lines every month and around 90,000
connections every month. As every month, 4-5 million lines are being added,
growth continues even in the year 2006.
Figure 1.4: Operator-wise Market Share of GSM Mobile as on 30.9.2006
Source: www.trai.gov.in as on 30th Sep 2006
10
Figure 1.4 explains Operator-Wise Market Share of GSM mobile services.
The GSM subscribers’ base has reached 91.01 million in the quarter ending
September 2006 as against 78.49 million at the end of the previous quarter
registering a growth rate of 15.94%.Bharti with 27.06-million subscriber base
remains the largest GSM mobile operator holding 29.73% share. It is followed by
BSNL, Hutch and Idea with subscriber base of 20.93 million, 20.36 million and
10.36 million, respectively. The subscriber base of all the GSM operators has
increased except that of BPL which is operating in Mumbai. Private operators
have 74% subscribers whereas Public sector Operators (BSNL & MTNL) have
26% subscribers in the GSM segment.
Figure 1.5: Operator-Wise Market Share of CDMA Mobile as on 30.9.2006
Source: www.trai.gov.in as on 30th Sep, 2006
The figure 1.5 explains the market share of CDMA operator on Sep, 2006.
Reliance Communications Ltd continued to have the highest subscriber base
with 60% market share followed by Tata Teleservices with 32% market share,
while other players in CDMA Technology have the remaining 8%.
1.3 TRUST AND COMMITMENT AND TELECOM SECTOR
Telecommunication markets have changed dramatically in recent

years. Customers in many countries who used to have only one service
provider now have a wide variety to choose from. The fight to attract and
keep customers has resulted in the development of relationship marketing
strategies. The telecom companies are developing a mix of relationship-
11
marketing tools to establish and build profitable customer relationship.
With the concept of relationship marketing, we focus on the need for
companies to be market oriented by building up the ability to manage
networks, relationships and interactions (Gronroos, 1983; Gummesson,
1987). In other words, the main thrust has been on expanding the
relationship with existing customers. It has been fully accepted in
marketing literature that long-term customers are more profitable than
short-term customers (Reichheld and Teal, 1996; Johnson, 1998).
The evolution of the competition forces firms to cope with an

increasing difficulty in the management of technological options and
market relations. In telecommunication industry, technologies are in
continual development; market relations are frequently threatened by new
or more aggressive competitors. In this situation, the behaviour of
entrepreneurs and managers is turned in search of new models to
manage market relations, suitable for operating with success in face of
continual change and a high level of uncertainty.
The marketing literature has shown that trust between firms, and
between firms and consumers, is a crucial factor in the move from discrete
market transactions to continuous exchange relationships. Most firms
have reacted to this dynamics by trying to develop long-term cooperative
relationships with other firms (Valdani 1997; Lanza 1998) and, above all,
with the clients, final and intermediate (Busacca 1994; Castaldo 1994;
Costabile 1999). Such relationships are based on mutual trust, and are
intended to control the variety and the variability (Vicari 1991; Rullani,
1992; Busacca, 1997). Trust established between firms, and between
firms and consumers, is one of the fundamental resources that firms can
make use of in order to control complexity. The continuous growth of trust
makes it possible, according to several authors, to pursue the objective of
the firm’s value generation and diffusion (Guatri, 1991; Vicari, 1991; Guatri
and Massari, 1992; Busacca, 1994; Costabile 1996b and 1998; Vicari,
Busacca and Bertoli, 1999).
12
As a first approach, trust whether in someone or something, can be
defined as an attitude, characterised by the belief in the counterparty’s
reliability, for example, supplier or client. More specifically, according to
some authors, this is the belief (Castaldo, 1995) that the behaviour of the
counter party is predictable in terms of its direction and intensity, which
means that future actions of the counterparty will conform to obligations
assumed, implicity or explicity. In general, this perception of reliability
comes from experience, and more particularly, from a sequence of
satisfactory interactions, that is a series of evaluative processes from
which a systematic confirmation of expectations emerges (Costabile,
1996).
The trust concept has been the object of particular attention in

research about markets relations in which two specific parties are
involved: one which gives trust (trustor) and one to which trust is given
(trustee). These relationships can take place at different levels: between
individuals, between firms, or between firms and individuals (Baccarani,
1995); there has been no lack of efforts to differentiate trust towards the
individuals from that towards the organizations (Doney and Cannon, 1997;
Zaheer, McEvily and Perrone, 1998), but most of these studies do not
hypothesis any distinction on this point. Besides, they assume that there is
a symmetry in the trust relationships. Trust is perceived, then, as a
phenomenon that is characterised by reciprocity, even if this symmetry is
not always confirmed (Ganesan, 1994).
It has been observed from marketing literature that trust is crucial

factor in the shift from discrete market transactions to continuous
exchange relationships (Dwyer, Schurr and Oh, 1987). Trust has thus a
central role in the development of relationship marketing, which refers to
all activities intended to establishing, developing and maintaining
exchange relationships with clients (Morgan and Hunt, 1994).
Some recent studies have also considered the trust concept in the
area of consumer marketing, that is in the relationships between firms and
13
final consumers. This is particularly the subject matter of studies aimed to
analyze the constructs involved in the customer buying behavior, such as
satisfaction, brand image and customer loyalty (Valdani and Busacca,
1992; Busacca, 1994; Vicari, 1995; Berry, 1995; Gruen, 1995; Gurviez,
1995; Busacca and Castaldo, 1996; Fletcher and Peters, 1997; Costabile,
1999).
On the grounds of exhaustive review done by Castaldo (1995), it is

possible to affirm that the conceptualization of trust concept in the
marketing literature has been at the beginning uni-dimensional. In
particular, the meaning recognized to trust by some authors, both in the
area of sales management (Swan and Nolan, 1985; Swan, Trawick and
Silva, 1985; Hawkes, Strong and Winick, 1996) and in the area of channel
management (Schurr and Ozanne, 1985; Dwyer and Oh, 1987), reflects
the first of the elements proposed in social psychology, that is to say it
refers to expectations of the counterparty’s behaviour and, more
specifically, to the certainty that the counterparty will keep his promises
(Rotter, 1967). Trust has thus been defined only with reference to the
dimension of “reliability”, considered as probability, more of less high, that
the expectations of performance – typically from a firm – are followed by
actual performance lined up with the expectations.
Subsequently, other definitions of trust, as those provided by

Anderson e Weitz (1989) and Anderson and Narus (1990) in the studies
on distribution channels and by Crossby, Evans and Cowles (1990) in the
study of the relationships between salespeople and consumers in the
services sector, have emphasized some new dimensions (Castaldo,
1995). The conceptualisation of the construct and its dimensions is
certainly one of the most controversial issues in the studies about the
topic. Indeed, most authors have offered a conceptualization of the trust
in terms of multidimensionality, but there is no agreement about number
and the nature of these dimensions.
14
In the opinion of some authors, trust would depend on the
perception that there is not opportunism from the counterparty, which
would be, in its turn, reinforced by the certainty that a behaviour is intented
to achieve a joint objective (goal congruence). This is the view, even if
there are some other changes, of Andaleeb (1992) who, referring to
channel relationships, has affirmed that trust is influenced by the party’s
perception about the motivations governing the other party’s actions. The
stronger the belief that these motivations are debatable, or even
opportunist, the more difficult it is to trust. The same author says that the
formation of trust can be adequately explained only by taking into account
another dimension: exchange partner ability, or rather the perception of
that competence.
To come to the point, Andaleeb (1992), who is quoted subsequently

by Fletcher and Peters (1997), suggests to conceptualize the trust of a
party “A” in a party “B” by reference to two basic elements: A’s perceptions
of B’s motivations (or intentions); and/or A’s perceptions of B’s ability to
produce the desired outcomes. On the basis of these considerations,
Andaleeb (1992) identifies a scheme for categorizing the different levels of
trust that can be found in market relationships, by using two dimensions
combined in different ways to form different types of trust (Table 1.4).
Table 1.4: Categories of Trust
ABILITY
High Low
Positive
Bonding trust Hopeful trust

MOTIVES
Negative
Unstable trust Distrust
Source: Andaleeb (1992),”The trust concept: research issues for channel distribution”, Research
in Marketing, vol. 11, pp.1-34
15
This matrix, subsequently considered also by Busacca and Castaldo
(1996), allows both to conceptualize the multidimensional nature of trust
and to hypothesize different configurations of it. Indeed, it would not exist
only one type of trust, but different types, which can be identified by
combining the perceptions about motivations and ability of the
counterparty – typically the supplier.
Also Ganesan (1994), to whom more recently Doney and Cannon

(1997) also refer, proposes two dimensions of trust, which are very similar
to those identified by Andaleeb (1992):
a) credibility, which depends on the buyer’s belief that the supplier has
the required expertise to carry out his role effectively and reliability;
b) benevolence, based on the buyer’s belief that the supplier acts on

the basis of intentions that are beneficial to the buyer himself.
In the same point of view, finally, Castaldo (1995) and Busacca and
Castaldo (1996) propose a conceptualization tri-dimensional of the
construct, taking account both the dimension originally identified in the
studies of social psychology, that is the predictability of the behaviour, and
the dimensions identified by Andaleeb (1992): the perceptions about ability
and the perceptions about motivations of the firm.
Among the authors who have proposed a multidimensional

definition of trust, Moorman, Zaltman and Deshpande (1992), in a study of
the relationships between providers and users of market research, identify
cognitive and behavioural dimensions of trust. The cognitive dimension
would consist of the belief in the partner’s reliability (trustworthiness), or
credibility, which comes from his motivation and knowledge – therefore
taking form in the same way as proposed by Andaleeb (1992) and
Ganesan (1994). The behavioural dimension, instead, would concern the
behavioural intention, that is the concrete act of placing trust in the
partner, and this implies vulnerability and uncertainty in the trustor, the
person doing trust.
16
Morgan and Hunt (1994) do not agree with last definition. Indeed,
even though they identify two different dimensions of the construct, yet
they hold that trust also exists in the presence of the cognitive component
alone. That is, it would be enough that the buying firm believes in the
honesty and reliability of the supplier firm. The behavioural intention
incorporated in the honesty and reliability of the supplier firm. The
behavioural intention incorporated in the willingness (“willingness to act”)
identified by Moorman, Zaltman and Deshpande (1992) would be implicit
in the concept of trust itself. Morgan and Hunt (1994), on this point, argue
that, although it might be appropriate to have items that incorporate
“declared willingness” into a measure of trust, willingness is redundant to
its definition: willingness to rely should be seen as a result (or,
alternatively, as a potential indicator) of trust, and not as one of its
constitutive dimensions.
The most recent marketing studies are characterised by a further

development, still as regards to the discussion about multi-dimensionality
of the construct. More specifically, recent works on the conceptualisation
of the trust have been dominated by two trends (Fenneteau and Guibert,
1997): the first one suggests a distinction between the cognitive and
affective dimensions of trust; the second one, conversely, leads to the
conceptual differentiation of the concepts of perceived trustworthiness,
that is the degree to which a subject perceives his partner as trustworthy,
trust and trusting behaviour, which is behavioural manifestation of trust.
In the light of these distinctions, trust can be, therefore, defined as

the willingness of one party to be vulnerable to the actions of the other
party, on the basis of the expectation that the other one will carry out a
particular action for the trustor, irrespective of the ability to control that
party.
Whereas, definition work on the construct of commitment began in

the sociology and psychology disciplines. In the sociological literature, the
17
concept of commitment is used to analyse both individual and
organizational behaviour (Becker, 1960). Sociologists use commitment as
a descriptive concept to mark out forms of action characteristic of
particular kinds of people or their groups. They also use it as an
independent variable to account for certain kinds of behaviour of
individuals and groups, as well as in analyses of a wide variety of
phenomena:
• Power;
• Religion;
• Occupational Recruitment;
• Bureaucratic Behaviour; and
• Political Behavior (Becker, 1960).
On the other hand, psychologists defined commitment in terms of

decisions or cognitions that fix or bind an individual to a behavioural
disposition (Kiesler, 1971).
Conceptualisations of commitment as a relationship, in the context

of a marriage or work, have interpreted the construct within a social-
psychological framework, whereby the construct was conceptually
characterized by intent to remain, along with certain personal and
environmental factors that underpin intent (Mowday et al., 1982). In this
sense, commitment was inferred not only from the employee’s beliefs and
options (a series of cognitions) but also by their level of intent to act in a
particular way (Pritchard et al., 1999). In other disciplines, commitment
has been characterized as a multidimensional phenomenon, composed of
several cognitive features (Kiesler, 1971). Nevertheless, in consumer
research, the complex nature of the construct has seldom been
considered. For example, Kelley and Davis (1994) examined customer
commitment as a general trait, adapting Mowday et al.’s (1979) measure
of organizational commitment. Likewise, Morgan and Hunt’s (1994) study
in relationship marketing, adopted the same scale.
18
1.4 RATIONALE OF TRUST AND COMMITMENT
It is important to keep and build strong bond of trust and

commitment with customers for the following five reasons.
1. There are higher marketing costs associated with generating

interest in new customers as opposed to already informed existing
customers.
The marketing costs involved in the creation of interest in an

uniformed new customer far outweigh those involved in maintaining
the relationship necessary to continue exchanges between buyer
and seller (Barnes and Glynn, 1992).
It has been estimated that the cost of attracting new customers can
be as high as six times that of retaining existing customers
(Desatnick, 1987; Sellers, 1989; Congram, 1991).
2. The close and long-term relationships with customers imply

continuing exchange opportunities with existing customers at a
lower marketing cost per customer (Gronroos, 1990).Across a wide
range of businesses, the pattern is the same: longer a company
keeps a customer, the more money it tends to make (Reichheld and
Sasser, 1990).
3. Viewing customer exchanges as a revenue stream, as opposed to a

compendium of isolated transactions, enables cross-selling of
related services over time and premium pricing for the customer’s
confidence in the business (Reichheld and Sasser, 1990; Congram,
1991).
4. Strong customer relationships with a high degree of familiarity and

communications on both sides can generate more practical new
product ideas from customers and contact personnel (Kiess-Moser
and Barnes, 1992).
19
5. Good relationships with customers can result in good work-of-mouth
from successful exchanges and minimal bad work-of-mouth in the
event of unsuccessful exchanges.
1.5 RESEARCH OBJECTIVES
The study has the following objectives:-
1. To study the rapid growth of Indian telecom sector.
2. To explore the impact of key dimensions of trust and commitment for

mobile services in the telecom sector.
3. To study the relationship between trust and commitment in both pre-paid

and post-paid services in selected telecom companies.
4. To analyse the level of trust and commitment in selected telecom service

providers across Punjab and Chandigarh.
5. To suggest managerial implications of trust and commitment to Indian

Telecom Sector.
1.6 TRUST AND COMMITMENT MODEL OF THE RESEARCH STUDY
Trust has been defined in various ways in literature. Trust is “willingness

to rely on an exchange partner in whom one has confidence” (Moorman et al.
(1993). Morgan and Hunt (1994) felt trust exists “when one party has confidence
in an exchange partner’s reliability and integrity”. According to Deutsch (1960),
trust consists of two components: confidence in ability and intention. There are
three dimensions of trust: perceived risk, technology orientation and reputation.
Perceived risk is a key dimension of trust in this research. The issue of

trust arises because economic transactions involve risk (Humphrey and Schmitz,
1998). More experienced more customers have more information, and therefore
they perceive the risk to be less and thus have more trust in transactions (Ba,
2001).
The customers’ orientation towards the technology of electronic

communication is frequently a proxy for their trust. Customers use various
performance measures such as network and download speed, navigability,
reliability, connectivity and availability to evaluate electronic transactions (Lee
and Turban, 2001). When customers are transmitting personal financial data
20
over the electronic network, there are risks that unauthorized parties could
intercept this information (Clay and Strauss, 2000).
Reputation is another dimension of trust. Reputation is defined as “overall

quality of character as seen or judged by people in general”. Reputation arises
from the strength of a particular brand name, endorsement from trusted third
parties, and previous interactions on and/or off-line (Egger, 2000). While
assessing the reputation, customers also assess the innovative abilities of the
service provider, which is based on the customers’ expectations of the skills and
competencies that it possesses in electronic transactions (Lee and Turban,
2001).
This research formulates following hypothesis:
H1: Trust has significant influence on customer commitment.
H1a: Perceived risk has significant influence on trust.
H1b: Technology Orientation has significant influence on trust.
H1c: Reputation has significant influence on trust.
The antecedents of trust
In this research, three main antecedents to trust have been identified:
1. Shared Value;
2. Communication;
3. Opportunistic behaviour.
1.6.1 Shared Value
Shared value is the extent to which partners have beliefs in common

about what behaviours, goals and policies are important or unimportant,
appropriate or inappropriate, and right or wrong (Morgan and Hunt, 1994). In this
research, shared value has been treated as a multi-dimensional construct. In the
telecommunication context, shared value symbolizes the extent to which the
company and the customers share common beliefs on critical values like ethics,
security, and privacy.
Ethical values determine the chances of companies giving incomplete

product information or divulging confidential personal information about
21
customers and selling customer information to other parties. Ethics and honesty
in a broad sense, which are aspects of good business morality, build trust
(Huemer, 1998). Mechanisms such as code of ethics and institutional
governance that establish and enforce rules and regulations can build trust by
addressing security and privacy concerns (Benassi, 1999).
A number of surveys have found consistently high levels of customer

concern about privacy (Ackerman et al., 1999; Swaminathan et al., 1999). The
main privacy concern of customers is violation and lack of confidentiality, which
is the misuse and lack of control of personal information subsequent to the
transaction (Novak et al., 1999). Due to the fall in cost of data transmission and
emerging technologies, it is now easier to collect personal information from
customers and share it with third parties (Clay and Strauss, 2000). There is thus
a risk of loss of confidentiality, which is a significant factor in building trust
(Culman and Armstrong, 1999).
Security is another factor that affects customer trust. This reduces the
customers’ level of trust, discouraging them from engaging in information
sharing. However, one study has shown that recent developments in electronic
exchange systems have caused an average customer to be less concerned
about the security of electronic exchanges or privacy issues (Swaminathan et al.,
1999). Security was identified as one of the least important factors to distinguish
a compelling online environment (Novak et al., 2000).
This research hypothesizes that in when there is a higher perception of

shared value, such perceptions will lead to increased trust.
H2: Shared value has a significant influence on customer trust and

commitment.
H2a: Privacy has significant influence on shared value.
H2b: Security has significant influence on shared value.
H2c: Ethics has significant influence on shared value.
1.6.2 Communication
Communication can be defined as “the formal as well as informal sharing

of meaningful and timely information” (Anderson and Narus, 1990).
22
Communication, especially timely communication (Moorman et al., 1993), fosters
trust by assisting in resolving disputes and ambiguities, and aligning perceptions
and expectations (Etgar, 1979). Anderson and Narus (1990) and Morgan and
Hunt (1994) have used past communication as an antecedent of trust.
In this research, communication is considered as a multidimensional

construct. The variables that constitute communication are openness, speed of
response, and quality of information.
Trust is negotiated through openness in communication and is specific to

the individual customers involved and their relationship. Research conducted by
Gefen and Straub (2001) found that man-machine communication, or at least the
belief that the electronic system has characteristics of social presence, is critical
to building customer trust. Methods to increase a social presence include real-
time interaction, fast response, and personalization of messages (Gefen and
Straub, 2001).
This research hypothesizes that the communication between the service

provider and the customer is positively related to trust.
H3: Communication has a significant influence on customer trust and

commitment .
H3a: Openness has a significant influence on communication.
H3b: Speed of response has a significant influence on communication.
H3c: Quality of Information has a significant influence on communication
1.6.3 Opportunistic Behaviour
Opportunistic behaviour has its roots in the transaction cost literature, and
is defined as (Williamson, 1975). In this research, opportunistic behaviour has
been conceptualized as regulatory control and information asymmetry.
The integrity of the telecom service providers and adherence to expected

roles and obligations depend on the extent of regulatory control, which is a major
determinant of customer trust (Lee and Turban, 2001). Customers assess the
level of confidence in regulatory control mechanism at the time of usage of
mobile phones. Due to the higher risk of opportunistic behaviour by company’s
owing to nascent and poorly-developed rules and regulations, customers
23
frequently have low levels of trust (Clay and Strauss, 2000). Identities can be
forged (Ba, 2001) and electronic documents can be falsified (Bailey and Bakos,
1997). The lack of adequate regulatory control also leads to the customers’
perception that their personal information may be used without their knowledge
during or after navigation (Novak et al., 1999; Li et al., 2001; Ackerman et al.,
1999). Therefore, the customers’ level of trust would be partly based on whether
they believe that the service provider would fulfill its obligations. Klang (2001)
pointed out that customers tend to assess the company’s interests and then
make a judgement about its integrity.
Information asymmetry is another important factor that affects customers’

trust. There is information asymmetry on the completeness of product
information, as complete information about the quality of the product is difficult or
impossible to obtain in a virtual environment (Klang, 2001; Ba, 2001). In
electronic transactions, customers cannot view the cues (Lee and Turban, 2001).
Under conditions of incomplete information on the quality, customers frequently
lack the trust to engage in transactions (Ba, 2001).
This research hypothesizes that in telecom service industry, when cellular

users believe that the company is engaging or can engage in opportunistic
behaviour, or vice versa, such perceptions will lead to reduced trust.
H4: Opportunistic behaviour has significant influence on customer trust and

commitment.
H4a: Regulatory control has significant influence on opportunistic

behaviour.
H4b: Information asymmetry has significant influence on opportunistic

behaviour.
1.6.4 The Consequence of Trust –Relationship Commitment
Moorman et al. (1992) defined relationship commitment as “an enduring

desire to maintain a valued relationship”. According to Morgan and Hunt (1994),
a critical complement of trust in exchange relationships is commitment. Trust
influences relationship commitment (Achrol, 1991; Moorman et al., 1992; and
Morgan and Hunt, 1994). The dimensions of commitment are the degree of
24
association, length of association and sense of belonging. Thus, this research
hypothesize that as trust increases, commitment also increases.
H5: Relationship Commitment has significant influence on customer

commitment and trust.
H5a: Degree and length of association has significant influence on

commitment.
H5b: Sense of belongingness has significant influence on commitment.
The hypothesized causal relationships and linkages are depicted in

Table 1.5.
Table 1.5: List of Variables and Measures
Construct Variable Measures used
Shared Value Variable 1 Privacy

Variable 2 Security
Variable 3 Ethics
Communication Variable 4 Openness
Variable 5 Speed of response
Variable 6 Quality of Information
Opportunistic Variable 7 Regulatory Control

behaviour
Variable 8 Information asymmetry
Trust Variable 9 Perceived Risk
Variable 10 Technology Orientation

Variable 11 Reputation
Relationship Variable 12 Degree and Length of association
Commitment
Variable 13 Sense of belonging
1.7 PROPOSED MODEL AND HYPOTHESES
The overall research issues and the model tested are given in Figure 1.6.
25
Figure 1.6: Trust and Commitment Model of the Research Study
Privacy Sense of
Degree & length
Belongingness
of association
Security
Ethics
Shared Value
H2 H5
Openness
H3 Relation
Communication Trust
Speed H1 Commitment
Quality of H4
Information
Opportunistic
Information
Behaviour
Asymmetry
Regulatory Reputation Technology

Perceived Risk
Control Orientation
26
This research formulates following hypotheses:
H1: Trust has significant influence on customer commitment.

H1a: Perceived risk has significant influence on trust.
H1b: Technology orientation has significant influence on trust.
H1c: Reputation has significant influence on trust.
H2: Shared value has a significant influence on customer trust and
commitment.
H2a: Privacy has significant influence on shared value.
H2b: Security has significant influence on shared value.
H2c: Ethics has significant influence on shared value.
H3: Communication has a significant influence on customer trust and
commitment.
H3a: Openness has a significant influence on communication.
H3b: Speed of response has a significant influence on communication.
H3c: Quality of information has a significant influence on communication
H4: Opportunistic behaviour has significant influence on customer trust and
commitment.
H4a: Regulatory control has significant influence on opportunistic
behaviour.
H4b: Information asymmetry has significant influence on opportunistic
behaviour.
H5: Relationship commitment has significant influence on customer
commitment and trust.
H5a: Degree and length of association has significant influence on
commitment.
H5b: Sense of belongingness has significant influence on commitment.
H6: All the key mediating variables have significant positive influence on
overall customer trust and commitment.
H6a: Shared value has positive significant influence on customer trust
and commitment.
27
H6b: Shared value has positive significant influence on customer trust
and commitment.
H6c: Communication has positive significant influence on customer trust
and commitment.
H6d: Opportunistic behaviour has a negative significant influence on
customer trust and commitment.
H6e: Trust has positive significant influence on customer trust and
commitment.
H7: Level of customer trust and commitment among various telecom service
providers.
H8: There is no significant relationship between trust & commitment and
demographic variables.
H9: Trust and commitment have significant impact on both pre-paid and post-
paid subscribers.
1.8 NEED AND SIGNIFICANCE OF STUDY
It is well perceived fact that customer trust and commitment have become
the important factors of business success. However many conclusions have
been drawn with regard to trust and commitment. But there are very few studies
related with trust and commitment in telecom sector with special reference to
India. The relevance of Trust and Commitment Theory for mobile users of Indian
Telecom Sector has yet to be established.
This research is grounded in the well-known commitment-trust theory of

relationship marketing, originally proposed by Morgan and Hunt (1994). Morgan
and Hunt showed that relationship marketing as the act of establishing,
developing, and maintaining successful relational exchanges. It constitutes a
major shift in marketing theory and practice.
According to the theory (Morgan and Hunt, 1994), trust is central to

successful relationship marketing, because it encourages marketers to:
• Work at preserving relationship investments by co-operating with
exchange partners;
• Resist attractive short-term alternatives in favour of the expected long-
term benefits; and
28
• View potentially high-risk options as being prudent because of the belief
that their partners will not act opportunistically.
Trust, according to Speakman (1988) is so important to relational

exchange that it is “the cornerstone of the strategic partnership” between the
seller and the buyer.
This research attempts to test an adaptation of the commitment-trust

theory of relationship marketing in the telecommunication context. Although the
main variables were mostly borrowed from the commitment-trust framework
(Morgan and Hunt, 1994), the dimensions and the items were adapted
significantly to the context of cellular users of telecom sector. Therefore, one of
the primary contributions of this research is to test the applicability and
extendibility of the commitment-trust theory to the domain of telecom service
providers
In Indian Telecom Sector mobile telephony is called as “sun-rise industry.

It is one of the growing industries in the country rapid growing with rate of
subscriber base teledensity and traffic. Indian telecom sector holds huge
potential for growth because of following reasons.
• Liberalisation and privatization has brought around 12 majors in both

GSM and CDMA sectors. With intense competition, companies try to woo
and retain customers for longer period of time. For which, trust and
commitment are key variables to maximize the average revenue per user.
• Impact of technology
• Impact of FDI flows
• Trust and commitment model given by Morgan and Hunt comprises

various key dimensions-shared value, communication, and opportunistic
behaviour. How these variables affect trust and commitment among
mobile users of Indian telecom sectors has further to be studied.
• Companies are spending heavily on acquisition and retention of both pre

paid and post-paid subscribers. To what extent, different telecom services
providers are able to build trust with both pre-paid and post-paid require
further analysis.
29
1.9 RESEARCH METHODOLOGY
1.9.1 Defining the Research Problem
Defining the research problem is an important step in a research. The

research problem of this proposal is to study “An Empirical Study of Trust and
commitment in Cellular Users of Selected Telecom Providers”.
1.9.2 Scope of Study
The study covers Chandigarh, Patiala, Ludhiana and Amritsar. Basis of

the selection of these cities is:
• More Tele-density subscriber base.
• Close proximity to the Circle Switches based at Chandigarh and Amritsar.
• Socio-demographic features of these cities.
1.9.3 Selection of Services
While selecting services for the study, a number of factors are taken into
account. Both pre-paid and post-paid services are selected for this purpose. The
preliminary study showed that the ratio between prepaid and postpaid subscriber
base is 80: 20. Since, Average Revenue per User is 4 times more in case of
postpaid users as compared to the prepaid subscribers. So, more weightage is
paid to the post-paid subscribers. Besides, the operators adopt various retention
tools in the post-paid category to retain customers.
1.9.4 Questionnaires
The questionnaire is prepared in English only. It is structured

questionnaire that include questions and scales on all concepts included in
hypothesis viz. Shared Value, Communication, Opportunistic Behaviour, Trust
and Relationship Commitment. Three different questionnaires are framed for
subscribers, dealers and telecom service providers.
1.9.5 Sample Design and Sample Size
Four major telecom service providers are selected i.e. Reliance

Infocomm, Airtel, Tata Telecom and Hutch. Through random sampling, sample
of 400 respondents is selected for administering the questionnaire. The data is
collected from 4 cities i.e. Chandigarh, Ludhiana, Amritsar, Patiala.
30
Sample is selected in two phases:
In Phase 1, number of subscribers has been selected in the ratio of 20:80

for Pre-Paid vis-à-vis Post-Paid subscribers for all the selected four operators.
Table 1.6: Prepaid vs. Postpaid Subscribers
Operator Prepaid Postpaid Total

Reliance Infocom
Airtel
Tata Telecom
Hutch
In Phase 2, sample has been selected city- wise.
Table 1.7: City Wise Prepaid and Postpaid Subscribers

City
Ludhiana Amritsar Chandigarh Patiala
Operator
Reliance Prepaid 5 5 5 5
Infocom Postpaid 20 20 20 20
Prepaid 5 5 5 5
Airtel
Postpaid 20 20 20 20
Prepaid 5 5 5 5
Tata Telecom
Prepaid 5 5 5 5
Hutch
1.9.6 Methods of Data Collection
This study will be based on primary and secondary data. The main
sources of secondary data will be published reports of World
Telecommunications development, Department of Telecommunications, Indian
Telecom Policy, Year book of Statistics, Journals, Books and various websites of
the Mobile operators. The primary data will be collected through the
questionnaire and personal Interviews. 4 Major telecom operators are selected:
Reliance Infocomm, Airtel, Tata Telecom and Hutch. Through a systematic
random sampling, a sample 400 respondents will be selected for administering
questionnaire at the touch-points of these Telecom Operators in these select
31
towns. Besides this, a sample of 60 questionnaires would be collected from
employees and 40 from the dealers of selected operators.
1.9.7 Limitations of the Study
Since data will be collected at the touch-points of the different operators,

so customers who do not visit these touch-points will not be part of the study.
The study has geographical limitations as it covers only 4 locations.
1.9.8 Analysis of Data
The data collected will be analysed using various statistical tools. The
basic framework of the model consisted of unobservable theoretical constructs,
which would not be measured directly. So, this study used a set of indicator
variables, which measured the unobservable constructs.
To tackle the problem of measuring the latent variables, usually two

strategies are followed. The first is selection of a single indicator variable for
each theoretical construct. However, in most cases, it is unrealistic to assume
that a single indictor variable will provide a reliable measure of the latent
variables. The second method is to assign pre- determined weights to different
indictor variables. However, both these methods are prone to error. Dillon and
Goldstein (1984), showed that when such measures are used in linear models
(e.g. variance analysis, regression and path analysis models), the coefficients
would have an unknown bias. Hence, this research will use linear structural
relationships (LISREL), an algorithm that is used widely for latent structure
analysis.
Tests for significance are less useful in small samples (less than 30) and
quite sensitive in large samples (exceeding 1,000 observations)(Hair et al.,
1995). Thus, both graphical and statistical tests will be carried out using SPSS
version 10.0 for Windows to assess the actual degree of departure from
normality the mean, standard deviation and reliability estimate of each model
construct are furnished in Table 1.8.
32
Table 1.8: Summary Statistics and Reliability Estimates
for the Model Constructs
Mean Standard Deviation Cronbach Alpha

Shared Value
Communication
Opportunistic behaviour
Trust
The normal distribution is important, continuous distribution because

a good number of random variables occurring in practice can be
approximated to it. If a random variable is affected by many independent
causes, and the effect of each cause is not overwhelmingly large
compared to other effects, then the random variable will closely follow a
normal distribution.
2
1 ⎛ x−µ ⎞
1 − ⎜
σ ⎠
⎟
f ( x) = e 2⎝ − ∞ < x < +∞ (3.1)
2πσ
ANOVA is a statistical method for determining the existence of

differences among several population means.
While the aim of ANOVA is to detect differences among several

population means, the technique requires the analysis of different forms of
variance associated with the random samples under study – hence the
name analysis of variance.
The ANOVA Model
There are four telecom service providers and data pertaining to 4 cities.
The linear model used for ith (i=1,2,3,4) telecom service operators and jth
(j=1,2,3,4) cities.
The linear model used for ANOVA with two way classification without
interaction is
Yij = µ+α1+β1+eij (3.2)
With i∑ αi = 0 j∑ βj = 0 and eij N (0, σ2)
33
Here
α1 : effect if ith telecom service provider
β1 : effect if jth city
In equation (3.2), the total sum of squares (TSS) can be decomposed into
three components i.e. sum of squares due to telecom service providers, sum of
squares due to place (SSP) and sum of squares due to error (SSE). Therefore, it
can be written.
F=MSY/MSE ~Fα (4,4)
Where α is the given level of significance
Once we have determined that differences exist among various telecom

service providers, the next step is to carry out post-hoc test for pair-wise multiple
comparisons, which determine which pair of telecom service providers differ
significantly.
Suppose, to test the hypothesis
H0 = αi = αi, i=1 for pair of telecom service providers and i. If
TSS=SSTSP+SSP+SSE
Thus, two hypotheses can be tested
H01 : α1 = α2 = α3 = α4 for telecom service providers
H02 : β1 = β2 = β3 = β4 for cities
These hypotheses correspond to variation between various telecom

service operators and variation of different cities, respectively. In order to test
these hypotheses, an ANOVA table is formed.
Table 1.9: ANOVA Table
Source of Degree of Sum of Mean SS F-Value

variation Freedom Squares
Between telecom 4 SSTSP SSTSP/4=MSTSP MSTSP/MSE~F(4,16)
service provider
Between cities 4 SSP SSP/4=MSP MSP/MSE~F(4,16)
Error 16 SSE SSE/16=MSE
Total 24 TSS
34
Thus for testing H01 i.e. there is no variation between telecom service
provider, reject H01, if
F=MSBG/MSE > Fα (4,4)
And
For testing there is no variation between cities, reject H02, if yi0 and yi’0 be
the means for these telecom service providers, then we reject H0 if
(yi0 – yi’0) is greater than Scheffe otherwise, accept H0
The ANOVA is tested for trust and commitment and its variables for
different combinations:
(a) Selected telecom service provider and prepaid and postpaid subscribers
and the interaction between both of them.
(b) Selected city and prepaid and postpaid subscribers and the interaction
between both of them.
(c) Selected telecom service provider and selected city and the interaction
between both of them.
(d) Prepaid and postpaid subscriber, selected telecom service provider and
selected city and the interaction between both of them.
Another statistical tool, t-test is used. When both populations are

normally distributed; population standard deviations σ1 and σ2 are
unknown, but the sample standard deviations S1 and S2 are known. The
equations for the test statistic t depend on two subcases:
Subcase 1: σ1 and σ2 are believed to be equal (although unknown).

In this subcase, we calculate t using the formula
(X1 − X 2 ) − (µ1 − µ 2 ) 0
t= (3.3)
S2P (1/n1 + 1/n 2 )
Where S2P is the pooled variance of the two samples, which serves as the
estimate of the common population variance given by the formula
(n1 − 1)S12 + (n 2 − 1)S22

S2P = (3.4)
n1 + n 2 − 2
35
The degrees of freedom for t are (n1+n2-2).
Subcase 2: σ1 and σ2 are believed to be unequal (although

unknown). In this subcase, we calculate t using the formula
(X1 − X 2 ) - (µ1 − µ 2 ) 0
t= (3.5)
S12 /n1 + S22 /n 2
The degrees of freedom for this t are given by
⎡ (S12 /n1 + S22 /n 2 ) 2 ⎤

df = ⎢ 2 ⎥ (3.6)
⎣ (S1 /n1 ) /(n1 − 1) + (S2 /(n 2 − 1) ⎦
2 2
Var(X1 − X 2 ) = Var(X1 ) + Var(X 2 ) = σ 2 /n1 + σ 2 /n 2 = σ 2 (1/n1 + 1/n 2 )
We estimate σ2 by-
(n1 − 1)S12 + (n 2 − 1)S22

S2P = (3.7)
(n1 + n 2 − 2)
Which is a weighted average of the two sample variances. As a result, if

the null hypothesis is true, then the quantity.
(X1 − X 2 ) − (µ1 − µ 2 ) 0
(3.8)
Sp 1/n1 + 1/n 2
must follow a t distribution with (n1+n1-2) degrees of freedom.
Subcase 2 does not neatly fall into a t distribution as it combines two

sample means from two populations with two different unknown variances.
It can be shown that when the null hypothesis is true, the quantity.
(X1 − X 2 ) − (µ1 − µ 2 ) 0
(3.9)
S12 /n1 + S 22 /n 2
will approximately follow a t distribution with degrees of freedom given by

the complex equation (iv). The symbol [ ] used in this equation means
rounding down to the nearest integer.
Another test of hypothesis used is the chi square test. Chi square is
one of the most important and widely used non-parametric test in
36
statistics. Many authors (Siegel and Castellan, 1988; Gupta, 1998; Singh,
1998) have discussed and explained chi square in detail.
Gupta (1998) describes the quantity of χ2 as the magnitude of the

discrepancy between theory and observation. It is defined as
Σ(O − E) 2
χ2 = (3.10)
E
O = observed frequencies
E = expected frequencies
Expected frequencies for nay cell is calculated by the following

equation
RT x CT
E=
N
E = Expected frequency
RT = The row total for the row containing the cell
CT = The column total for the column containing the cell
N = The total number of observations
While comparing the calculated value of χ2 with the table value the
degrees of freedom are to be determined. Degrees of freedom means the
number of classes to which the values can be assigned arbitrarily or at will
without violating the restrictions or limitations placed. The degrees of
freedom are denoted by the symbol v or d.f. and are obtained by v=n – k,
where k refers to the number of independent constraints. In a contingency
table, the degrees of freedom are obtained by (c-1) (r-1) where ‘c’ refers to
column and ‘r’ refers to rows.
Singh (1998) explains that some times it happens that with 1df, any
one of the expected cell frequencies becomes less than 5. In such a
situation a correction called Yates correction for continuity is applied.
Where frequencies are large, this correction makes no difference but
where frequencies are small, Yates correction is significant. According to
37
Siegel and Castellan (1998) applying the χ2 test to data where both r and c
equal 2, the following equation should be used.
N (| AD - BC | -N/2) 2
χ2 = df=1 (3.11)
(A + B) (C + D) (A + C) (B + D)
1.10 CHAPTER PLAN
Chapter 1: Introduction
This chapter covers the fastest growing services and brief overview of
growth of Indian telecom sector. Research objectives and significance of study
are also covered. This chapter is concerned trust and commitment, research
methodology used for selection of telecom service providers, geographical
scope, selection of variables and analysis of the tools required tools for the
study.
Chapter 2: Review of Literature
This chapter covers studies related to telecom sector, studies related to

relationship marketing, trust and commitment. Review of telecom sector has
been further classified into technology up-gradation, changing investment
policies and competition. In studies related to relationship marketing review of
literature has been studied from conceptual and practical aspects. In studies
related to trust, various aspects –trust, relationship commitment, shared value,
customer skills, opportunistic behaviour, communication and switching costs are
reviewed
Chapter 3: Indian Telecom Industry: Growth and Prospectus
This chapter covers global telecom industry, Indian telecom industry,

new telecom policy and regulatory development. It explains also studies various
telecom providers and services provided by them.
Chapter 4: A Conceptual Framework of Trust and Commitment
This chapter is devoted to the concept of relationship marketing and

discrete and relational exchanges. It studies the relationship development
process and various categories of trust for the relationship development. It also
covers the analytical study of selected telecom service providers and various
customer relationship programmes taken by them.
38
Chapter 5: Research Findings of the Study
This chapter covers the trust and commitment of telecom sector by

studying according to selected city, development of a model in prepaid and
postpaid services of selected telecom service providers.
Chapter-6: Summary, Suggestions and Recommendations
This chapter presents summary, conclusion and recommendations of the

study. How these recommendations are useful for managerial decision, limitation
of the study and identify the directions for future research are also discussed..
Bibliography
Appendices
• Tables
• Questionnaire
• List of Abbreviations
39
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45
CHAPTER – 2
REVIEW OF LITERATURE
2.1 BRIEF OVERVIEW
The growth in demand for telecom services in India is not limited to basic
telephone services. India has witnessed rapid growth in cellular, radio paging,
value added services, internet and global communication by satellite (GMPCS)
services. The agents of change, as observed from international perspective,
have been broadly categorized into economic structure, competition policy and
technology. Economic reforms and liberalisation have driven telecom sector
through several transmission channels of which these three categories are of
major significance.
The effective research cannot be accomplished without critically studying

what already exists in the form of general literature and specific studies.
Therefore, it is considered as an important pre-requisite for actual planning and
execution of research project. This helps to formulate hypotheses and framework
for further investigation. In this research, the survey of literature has been
classified into two parts --- studies related to telecom sector and studies related
to trust and commitment.
2.2 STUDIES RELATED TO GROWTH AND DEVELOPMENTS IN INDIAN

TELECOM SECTOR
According to Snyder (2006) Communications is a process that allows

information to pass between a sender and one or more receivers and. the
transfer of meaningful information or ideas from one location to a second
location. Communications is a human process; humans communicate by
sending information between themselves. Whereas, telecommunication is the
transmission of data or information over a distance. Tele is a Greek word
meaning at a distance, far off. Thus, it classifies smoke signals, semaphore
flags, lanterns and signal flares, telegraph systems, televisions, telephones,
written letters, and hand signals as capabilities that support telecommunications.
46
The problems with these communications forms include reliability, speed of
transmission, and comprehension purposes.
Muller (1990) in his a research focuses that the success of the mobile
commerce can be attributed to the personal nature of wireless devices. Adding
to this are its unique features of voice and data transmission and distinct
features like localisation, feasibility and convenience. The sustained growth of
the mobile commerce around the world has been more because of the transfer
of technology according to the needs of local geography.
National Telecom Policy (1999) projected a target 75 million telephone

lines by the year 2005 and 175 million telephone lines by 2010 has been set.
Indian telecom sector has already achieved 100 million lines. With over 100
million telephone connections and an annual turnover of Rs. 61,000 crores, our
present teledensity is around 9.1%. The growth of Indian telecom network has
been over 30% consistently during last 5 years.
According to Wellenius and Stern (2001), information is regarded today

as a fundamental factor of production, alongside capital and labor. The
information economy accounted for one-third to one-half of gross domestic
product (GDP) and of employment in Organization for Economic Cooperation
and Development (OECD) countries in the 1980s and is expected to reach 60
percent for the European Community in the year 2000. Information also accounts
for a substantial proportion of GDP in the newly industrialized economies and the
modern sectors of developing countries.
Videsh Sanchar Nigam Limited (VSNL) 16th Annual Report (2002)

India like many other countries has adopted a gradual approach to telecom
sector reform through selective privatisation and managed competition in
different segments of the telecom sector. India introduced private competition in
value-added services in 1992 followed by opening up of cellular and basic
services for local area to competition. Competition was also introduced in
National Long Distance (NLD) and International Long Distance (ILD) at the start
of the current decade.
47
World Telecommunication Development Report (2002) explains that
network expression in India was accompanied by an increase in productivity of
telecom staff measured in terms of ratio of number of main lines in operation to
total number of staff.
Indian Telecommunication Statistics (2002) in its study showed the

long run trend in supply and demand of Direct Exchange Lines (DEL). Potential
demand for telecom services is much more than its supply. In eventful decade of
sectoral reforms, there has been significant growth in supply of DEL.
Economic Survey, Government of India (2002-2003) has mentioned

two very important goals of telecom sector as delivering low-cost telephony to
the largest number of individuals and delivering low cost high speed computer
networking to the largest number of firms. The number of phone lines per 100
persons of the population which is called teledensity, has improved rapidly from
43.6 in March 2001 to 4.9 in December 2002.
Adam Braff, Passmore and Simpson (2003) focus that telecom service
providers even in United States face a sea of troubles. The outlook for US
wireless carriers is challenging. They can no longer grow by acquiring new
customers, in fact, their new customers are likely to be migrated from other
carriers. Indeed, churning will account for as much as 80% of new customers in
2005. At the same time, the carrier’s Average Revenue Per User (ARPU) is
falling because customers have.
Dutt and Sundram (2004) studied that in order to boost communication

for business, new modes of communication are now being introduced in various
cities of the country. Cellular Mobile Phones, Radio Paging, E-mail, Voice-mail,
Video, Text and Video-Conferencing now operational in many cities, are a boon
to business and industry. Value-added hi-tech services, access to Internet and
Introduction of Integrated Service Digital Network are being introduced in various
places in the country.
A study by Jeanette Carlss on and Salvador Arias (2004) wireless

substitution is producing significant traffic migration from wireline to wireless and
helping to fuel fierce price competition, resulting in margin squeezes for both
48
wireline voice tariffs in organisation for Economic Co-operation and Development
Countries have fallen by an average of three percent per year between 1999 and
2003.
T.V. Ramachandran (2005) analysed performance of Indian Telecom

Industry which is based on volumes rather than margins. The Indian consumer is
extremely price sensitive. Various socio-demographic factors-- -- high GDP
growth, rising income levels, booming knowledge sector and growing
urbanization have contributed towards tremendous growth of this sector. The
instrument that will tie these things together and deliver the mobile revolution to
the masses will be 3 Generation (3G) services.
Rajan Bharti Mittal (2005) explains the paradigm shift in the way people
communicate. There are over 1.5 billion mobile phone users in the world today,
more than three times the number of PCOs. India today has the sixth largest
telecom network in the world up from 14th in 1995 , and second largest among
the emerging economies. It is also the world’s 12th biggest market with a large
pie of $ 6.4 billion. The telecom revolution is propelling the growth of India as an
economic powerhouse while bridging the developed and the developing
economics.
ASEAN India Synergy Sectors (2005) point out that high quality of
telecommunication infrastructure is the pillar of growth for information technology
(IT) and IT enabled services. Keeping this in view, the focus of telecom policy is
vision of world class telecommunication services at reasonable rates. Provision
of telecom services in rural areas would be another thrust area to attain the goal
of accelerated economic development and social change. Convergence of
services is a major new emerging area.
Aisha Khan and Ruchi Chaturvedi (2005) explain that as the

competition in telecom area intensified, service providers took new initiatives to
customers. Prominent among them were celebrity endorsements, loyalty
rewards, discount coupons, business solutions and talk time schemes. The most
important consumer segments in the cellular market were the youth segment
and business class segment. The youth segment at the inaugural session of
49
cellular summit, 2005, the Union Minister for Communications and Information
Technology, Dayanidhi Maran had proudly stated that Indian telecom had
reached the landmark of 100 million telecom subscribers of which 50% were
mobile phone users. Whereas in African countries like Togo and Cape Verde
have a coverage of 90% while India manages a merely mobile coverage of 20%.
In overview in Indian infrastructure Report (2005) explains India’s

rapidly expanding telecom sector is continuing to witness stiff competition. This
has resulted in lower tariffs and better quality of services. Various telecom
services-basic, mobile, internet, national long distance and international long
distance have seen tremendous growth in year 2005 and this growth trend
promises to continue electronics and home appliances businesses each of which
are expected to be $ 2.5 bn in revenues by that year. So, driving forces for
manufacturing of handsets by giants in India include-sheer size of India market,
its frentic growth rates and above all the fact that its conforms in global
standards.
Marine and Blanchard (2005) identifies the reasons for the unexpected
boom in mobile networks. According to them, cellphones, based on Global
System for Mobile Communication (GSM) standard require less investment as
compared to fixed lines. Besides this, a wireless infrastructure has more mobility,
sharing of usage, rapid profitability. Besides this, usage of prepaid cards is the
extent of 90% simplifies management of customer base. Moreover, it is suitable
to people’s way of life-rural, urban, and sub-urban subscribers.
G. Dhananjayan (2005) did a case study on mobile users of Punjab and

concluded that despite the presence of only four mobile operators in Punjab
(against six in most of other states), due to aggressive market expansion and
segmentation strategy followed by two key operators (Airtel and Spice), the total
mobile population crossed 3.2 million by October 2004 for a population of just
24.35 million, thus achieving a penetration level of a whopping 13%. Most states
which are industrially advanced had just 6% mobile penetration, clearly
illustrating the lead achieved by Punjab.
50
According to Business and Economy (2005) the catalyst for Indian
mobile operators in the future will undoubtedly be increased marketing and
advertisement expenditure, along with better deals for mobile phone users like
the previously mentioned full talk time Rs. 10 recharge card, will go a long way in
not only retaining customers but also acquiring the vast market of lowered
customers who are extremely sticky about value for money and have extremely
low loyalties and almost non-existent switching costs.
According to Oliver Stehmann (2005) the telecommunications industry is

characterized by rapid innovation in the service and the transmission market.
The legally protected public or private monopolist does not have the same
incentive to foster innovation that would exist in a competitive environment.
Thus, state intervention based on the natural monopoly argument neglects
dynamic aspects, which are crucial in the telecommunications sector.
Marketing Whitebook (2005) explains with support of detailed data that

bigger players are close to 20% of the market each. In CDMA market, it is
Reliance Infocom and Tata Teleservices are dominating the scene whereas
Airtel is lead in GSM operators. Between 2003 and 2004, the total subscriber
base of the private GSM operators doubled. It rose from 12.6 million subscribers
at the end of March 2003 to 26.1 million by the end of March 2004. And yet that
100% growth rate notwithstanding, total industry revenue for 2003-04 were
around Rs. 8308 crores. Compared to Rs. 6400 crores that industry grossed in
2002-2003, that is an increase of 30%.
According to The Economic Times (2005) Indian mobile phone market is

set to surge ahead since urban India has a teledensity of 30 whereas rural India
has a teledensity of 1.74. It indicates that the market is on ascent, with more
than 85000 villages yet is come under teleconnectivity.
According to a paper released by the Associated Chambers of

commerce and Industry of India (2005), it is stated that 30% of the new mobile
subscribers added by the operators worldwide will come from India by 2009.
10% of the third generation (3G) subscribers will be from India by 2011, Indian
handset segment could be between US $ 13 billion and US $ 15 billion by 2016.
51
It offers a great opportunity for equipment vendors to make India a
manufacturing hub. Indian infrastructure capital expenditure on cellular
equipment will be between 10 to 20% of the investment that will be made by
international operators by 2015. The other proposals included setting up of
hardware manufacturing cluster parks, conforming to global standards and fiscal
incentives for telecom manufacturing among others.
Virat Bahri (2006) explains the viewpoint of Sam Pitroda the Chairman of
Worldtel that identifies opportunities for investments in telecommunications. He
analyses that there is an increasing role for telecom in e-governance in India.
According to him, technology can be leveraged to take India’s development to
next level.
2.2.1 Studies Related to Technology Upgradation in Telecom Sector
Uehara (1990); King (1990); Glynn (1992); Mutoh (1994) emphasized

that technological changes in the telecom and computers have radically changed
the business scenario. In turn, the new demands of business have spurred many
telecom based technological innovations. In order to exploit these innovations for
competing in global markets, business community has been putting pressures on
governments to revise the policy, regulation and structure of the telecom sector.
Several countries across the world have responded by restructuring the state
controlled telecom provider, increasing private participation and deregulating
service provisions.
Business Today (1992) pointed out that due to lack of technical and
financial resources especially foreign exchange, the DOT generally lagged
behind in its level of technology. India’s indigenisation program in the switching
segment carried out by C-DOT was successful in the introduction of rural
exchanges designed specially for Indian conditions characterized by dust, heat
and humidity.
According to Economic Commission for Europe (2000) this transition of

the telecommunication area is mainly technology driven. The borderline between
computers and electronics, on the one hand, and telecommunications, on the
other, is disappearing. This convergence of technologies has led to the
52
acceleration of the innovation process, which is constantly bringing forward new
products and services. Besides expanding the market potential, this innovation
process has also given rise to major changes in industry and the institutional
structure.
E Pedersen and Methlie (2002) studied the technology aspect and

explained a comparative view. According to them, a comparison of the slow
adoption of WAP services in Europe with the successful adoption of comparable
I-mode services in Japan and technologically simple SMS based services in
Scandinavian suggest that aggregate and technology based models are
insufficient to explain the mobile service. Thus, technological models of the
supply side need to be supplemented with the views and impact of perceptions
from the demand side of the mobile commerce end user.
World Telecommunication Development Report (2002) technologies of

mobile telecommunications and internet are going to set the contours of further
technological progress in the current decade. The most recently initiatives aims
at convergence of voice and data received from multiple sources both web
based and real time video streams in mobile handsets and calling cards have
virtual presence possible almost everywhere overcoming the barriers of
distance, topography and remoteness.
Prithipal Singh (2004) with the convergence of technologies, data

services are expected to grow exponentially in the years to come. Broadband is
likely to take a lead in the development of Indian Telecom Sector. Broadband is
growing market and offers immense possibilities for investment. In Broadband
policy, India has envisaged a target of 40 million Internet subscribers and 20
million broadband subscribers by 2010.
P.S. Saran (2004) the telecom technology in India has transformed from
manual and electro-mechanical systems to the digital systems. India has
stepped into new millennium by having 100% electronic switching system. The
technological changes have made way for new services and economics in the
provision of telecom services.
53
According to Mather (2005) the challenge, of course, is that a competitor
can show up in one of your established markets with new technology, better
people, a better network of companies for support and a better management
style and steal huge chunks of your business before you can respond. Staying at
the forefront of all these issues will be the only way to stay successful.
2.2.2 Studies on Investment Policy of Telecom Sector
Moto (1990) researched the need of separate policy, regulation and

operation which require changes in legislation - for example the restructuring the
Japanese Nippon Telegraph and Telephone Public Corporation and Kokusai
Denshin Dewwa was preceded by appropriate changes in legal framework.
Melody (1990) points out that the Indian Government had not addressed
the basic requirement necessary for reform and there was no pre-planned
sequence of structural changes which are basic determinants of reform.
Therefore, the government, investors and subscribes could expect only marginal
benefits from the reform process.
MTNL Report (1991) explains that international bodies had supplemented

government resources and funded expansion and technology upgradation
programmes.
Akwule (1992) researched that in comparison Kenya, which had almost

the same level of gross domestic investment as percentage of GDP from 1981-
89 raided the telecom investment as a share of GDP from 3.28% to 8.67 in 1978.
The effect of under investment in these sectors was compounded by the
diffusion of these scarce resources over a number of areas where no specific
area in telecom was developed.
Jain and Chhokar (1993) points out the limitations of capital and
manpower as key constraints. The Athreya’s Committee’s report may be viewed
as an initiation of a process of examining organizational options. Management
incentives which would allow these organizations to increase profitability and the
structural mechanisms which would allow then to raise capital from markets had
been sketchily outlined.
54
2.2.3 Studies Relating to Competition in Indian Telecom Service Sector
Melody (1990) points out various concerns for the telecom sector
covering competition as important one. Competition is considered more
important factor than ownership in introducing efficiency. Further the order in
which structural adjustments take place determine the effectiveness. Donaldson
(1994), Jussawala (1992); Jain, (1995); Wellenius (1995), recognize that
developing countries feel the important role a responsive, business oriented, and
technologically advanced telecom sector plays in the growth of the economy.
Many developing countries accept the limitations of a monolith state monopoly in
responding to the twin challenges of spurring internal growth and competing in
global economy.
Shyamal Ghosh (2003) mentions that the most significant development

since 1999 has been the progressive reduction in tariffs which has been
facilitated by competition through multi operator environment. The most dramatic
reduction in tariff has been from very high Rs. 16 per minute to Rs. 2 per minute.
N.M. Shanthi (2005) throws light on the factors that contributed to the
growth of telecom sectors. The studies various initiatives takes by government in
lien of liberalisation, privatisation and de-monopolisation initiatives. The trend is
expected to continue in the segment as prices are falling as a result of
competition in the segments. The beneficiaries of the competition are the
consumers who are given a wide variety of services.
Kushan Mitra (2005) analyses various factors contributing to competition

to Indian Telecom Industry. Besides lowering of prices, increased efficiency,
greater innovation, highly tech industry better quality services are some of the
reasons which are boosting competition amongst various telecom service
providers.
Michael Meltzer (2005) explain that in electronic age, the need to

manage customer relationships for profit is a marketing dilemma that many
telecommunication companies face.
55
Arindham Mukherjee (March, 2006) takes out various case studies like
Vodafone, Maxis, Telekopm Malaysia, Tatatele etc. to study the rising interest of
foreigners for investment in Indian telecom industry. Various reasons of
stemming growth can be rising subscriber base, rising teledensity, rising handset
requirements, saturated telecom markets of other countries, stiff competition,
requirement of huge capital, high growth curve on telecom, changing regulatory
environment, conducive FDI limits in telecom sector.
According to Stephen Y. Walters (2003) the telecommunications industry

is being rocked by change fueled by the advent of the tremendous success of
the internet and its technologies.. For quite some time, there has been
competition in the telephony business. Long-distance rates have seen
continuous decreases for two decades as new carriers sought to capture greater
and greater market share. Local carriers have seen competition for
interconnecting the networks of large corporate customers and for providing
them access to long-distance services. So, competition and change are not new
issues in telecommunications. But the internet has forced an entirely new set of
changes on the phone business. There are new carriers, new business
scenarios, new technologies, and new ways of thinking about end users and the
services they seek.
2.3 TRUST AND COMMITMENT IN SERVICES SECTOR
As Navin (1995) points out, these terms have been used to reflect a
variety of themes and perspectives. Some of these themes offer a narrow
functional marketing perspective while others offer a perspective that is broad
and somewhat paradigmatic in approach and orientation. A narrow perspective
of customer relationship management is database marketing emphasizing the
promotional aspects of marketing linked to database efforts (Bickert, 1992).
Another narrow, yet relevant, viewpoint is to consider CRM only as

customer retention in which a variety of after marketing tactics is used for
customer bonding or staying sin touch after the sale is made (Vavra 1992). A
more popular approach with recent application of information technology is to
focus on individual or one-to-one relationship with customers that integrate
56
database knowledge with a long-term customer retention and growth strategy
(Peppers and Rogers, 1993). Thus, Shani and Chalasani (1992) define
relationship marketing as “an integrated effort to identify, maintain, and build up
a network with individual consumers and to continuously strengthen the network
for the mutual benefit of both sides, through interactive, individualized and value-
added contacts over a long period of time”. Jackson (1985) applies the
individual account concept in industrial markets to suggest CRM to mean,
“Marketing oriented toward strong lasting relationships with individual accounts”.
McKenna (1991) professes a more strategic view by putting the customer

first and shifting the role of marketing from manipulating the customer (telling
and selling) to genuine customer involvement (communicating and sharing the
knowledge). Berry (1995), in somewhat broader terms, also has a strategic
viewpoint about CRM. He stresses that attracting new customers should be
viewed only as an intermediate step in the marketing process. Developing closer
relationship with these customers and turning them into loyal ones are equally
important aspects of marketing. Thus, he proposed relationship marketing as
“attracting, maintaining, and – in multi-service organizations – enhancing
customer relationships”.
Berry’s notion of customer relationship management – resembles that of

other scholars studying services marketing, such as Gronroos (1990),
Gummesson (1987), and Levitt (1981). Although each of them is espousing the
value of interactions in marketing and its consequent impact on customer
relationships, Gronroos and Gummesson take a broader perspective and
advocate that customer relationships ought to be the focus and dominant
paradigm of marketing. For example, Gronroos (1990) states: “Marketing is to
establish, maintain and enhance relationships with customers and other
partners, at a profit, so that the objectives of the parties involved are met. This is
achieved by a mutual exchange and fulfillment of promises”. The implication of
Gronroos’ definition is that customer relationships is the ‘raison de etre’ of the
firm and marketing should be devoted to building and enhancing such
relationships. Similarly, Morgan and Hunt (1994), draw upon the distinction
57
made between transactional exchanges and relational exchanges by Dwyer,
Schurr, and Oh (1987), to suggest that relationship marketing “refers to all
marketing activities directed toward establishing, developing, and maintaining
successful relationships.”
The core theme of all CRM and relationship marketing perspectives is its
focus on cooperative and collaborative relationship between the firm and its
customers, and/or other marketing actors. Dwyer, Schurr, and Oh (1987) have
characterized such cooperative relationships as being interdependent and long-
term oriented rather than being concerned with short-term discrete transactions.
The long-term orientation is often emphasized because it is believed that
marketing actors will not engage in opportunistic behaviour if they have a long-
term orientation and that such relationships will be anchored on mutual gains
and cooperation (Ganesan, 1994).
Another important facet of CRM is “Customer selectivity”. As several

research studies have shown not all customers are equally profitable for an
individual company (Storbacka, 2000). The company therefore must be
selective in tailors its program and marketing efforts by segmenting and selecting
appropriate customers for individual marketing programs. In some cases, it could
even lead to “outsourcing of some customers” so that a company better utilize its
resources on those customers it can serve better and create mutual value.
However, the objective of a company is not to really prune its customer base but
to identify appropriate programs and methods that would be profitable and create
value for the firm and the customer.
As observed by Sheth and Parvatiyar (1995), developing customer

relationships has historical antecedents going back into the pre-industrial era.
Much of it was due to direct interaction between producers of agricultural
products and their consumers. Similarly artisans often developed customized
products for each customer. Such direct interaction led to relational bonding
between the producer and the consumer. It was only after industrial era’s mass
production society and the advent of middlemen that there were less frequent
interactions between producers and consumers leading to transactions oriented
58
marketing. The production and consumption functions got separated leading to
marketing functions being performed by the middlemen. And middlemen are in
general oriented towards economic aspects of buying since the largest cost is
often the cost of goods sold.
Berry and Parsuraman (1991); Bitner (1995); Crosby and Stephens

(1987); Crosby, et al. (1990); Gronroos (1995) the de-intermediation process
and consequent prevalence of CRM is also due to the growth of the service
economy. Since services are typically produced and delivered at the same
institutions, it minimizes the role of the middlemen. A greater emotional bond
between the service provider and the service users also develops the need for
maintaining and enhancing the relationship. It is therefore not difficult to see that
CRM is important for scholars and practitioners of services marketing
According to Frazier, Speakman and O’Neal (1988) another force driving

the adoption of CRM has been the total quality movement. When companies
embraced Total Quality Management (TQM) philosophy to improve quality and
reduce costs, it became necessary to involve suppliers and customers in
implementing the program at all levels of the value chain. This needed close
working relationships with customers, suppliers, and other members of the
marketing infrastructure. Thus, several companies formed partnering
relationships with suppliers and customers to practice TQM. Other programs
such as Just-in-time (JIT) supply and Material Resource Planning (MRP) also
made the use of interdependent relationships between suppliers and customers.
According to (Shapiro and Posner, 1979) with the advent of the digital
technology and complex products, systems selling approach became common.
This approach emphasized the integration of parts, supplies, and the sale of
services along with the individual capital equipment. Customers liked the idea of
systems integration and sellers were able to sell augmented products and
services to goods, as well as services. At the same time some companies
started to insist upon new purchasing approaches such as national contracts and
master purchasing agreements, forcing major vendors to develop key account
management programs
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Similarly, in the current era of hyper-competition, marketers are forced to
be more concerned with customer retention and loyalty (Dick and Basu, 1994);
Reicheld, 1996). As several studies have indicated, retaining customers is less
expensive and perhaps a more sustainable competitive advantage than
acquiring new ones. Marketers are realizing that it costs less to retain customers
than to compete for new ones (Rosenberg and Czepiel, 1984).
On the supply side it pays more to develop closer relationships with a few
suppliers than to develop more vendors (Hayes et al., 1998; Spekman, 1988).
In addition, several marketers are also concerned with keeping customers for
life, rather than making a ne0time sale (Cannie and Caplin, 1991). There is
greater opportunity for cross-selling and up-selling to a customer who is loyal
and committed to the firm and its offerings . Also, customer expectations have
rapidly changed over the last two decades. Fueled by new technology and
growing availability of advanced product features and services, customer
expectations are changing almost on a daily basis. Consumers are less willing to
make compromises or trade-off in product and service quality. In the world of
ever changing customer expectations, cooperative and collaborative relationship
with customers seem to be the most prudent way to keep track of their changing
expectations and appropriately influencing it (Sheth and Sisodia, 1995).
According to Yip and Madsen (1996) today, many large internationally

oriented companies are trying to become global by integrating their worldwide
operations. To achieve this they are seeking cooperative and collaborative
solutions for global operations from their vendors instead of merely engaging in
transactional activities with them. Such customers needs make it imperative for
marketers interested in the business of companies who are global to adopt CRM
programs, particularly global account management programs). Global Account
Management (GAM) is conceptually similar to national account management
programs except that they have to be global in scope and thus they are more
complex. Managing customer relationships around the world calls for external
and internal partnering activities, including partnering across a firm’s worldwide
organization.
60
According to David L. Kurtz (2003) the purpose of relationship marketing
is to build long-term connections between the company and its customers and to
develop brand and firm loyalty. Relationship marketing works well for services
where transactions tend to be continuous and switching costs for customers are
high. Firms operating in the customization and functional service quality sector
do well with relationship marketing programs. The long-term goal of relationship
marketing is to build brand loyalty. Personal interaction with service personnel is
critical in the development of the long-term relationship.
Trust is a cross disciplinary concept, incorporating ideas from economics,

marketing, sociology, psychology, organization behaviour, strategy, information
systems and decisions sciences.
2.3.1 Trust
Trust has been defined in various ways in literature. According to

Deutsch (1960) trust consists of two components, confidence in ability and
intention (Moorman et al. 1993). Trust is “Willingness is truly on an exchange
partner in whom one has confidence.” Morgan and Hunt (1994) felt trust exists
“when one party has confidence in an exchange partner’s reliability and integrity”
(Anderson and Narus, 1990). The outcome of trust therefore is the “firms belief
that another company will perform” actions that will result in positive outcomes
for the firm as well as not take unexpected actions that result in negative
outcomes”. Hart and Saunder, (1997) the importance of trust is based on the
potential use of technology to increase information sharing. Trust increases the
probability of a firm’s willingness to expand the amount of information sharing
and explore new mutually beneficial arrangements. As trust declines, people are
increasingly unwilling to take risks and demand greater protections against the
probability of betrayal. In telecom sector, security and reliability of information
refers to a positive trust that is shown in the consistency and assurance between
what a trading partner says and does. Therefore, trust among the trading
partners in telecom commerce reinforces the prospect of continuity in a
relationship and commitment.
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Analyzing data, Bercerra and Gupta (1999) categorized both negative
consequences of lack of trust and key positive results from high trust
relationships. For instance, a manager’s time and time spent on dealing with low-
trust relationships are higher than those spent in dealing with high trust would
enjoy open communication and willingness to take risks. People in high trust
relationships are not afraid to share all information received. They also indicated
that the overall performance would be enhanced the problems of distrust were
reduced .
According to Dr. Hal Varian (2001) in part, one got to have incentives set
up in a way that there is something for everybody in the transaction. A lot of the
trust comes out of the repeated nature of the interactions, or the contractual
interaction, or the system you set up for compensation, or revenue sharing.
Those are the behind-the-scenes components that really cause the trust to be
created and work successfully.
Kasper-Fuehrer and Ashkanasy in the (2001) trust results from

experiencing fair behavior by the other party together with acceptance of the
other party’s rights and interests. An additional factor implicit in the definition of
trust is the role of ethical behavior. Any change in a person’s value system
causes a change in behavior and thus influences trust. Trust also indicates a
joint undertaking with a level of understanding of shared business practices
between the parties. Finally, trust implies that the participants contribute to, and
gain from, the final outcome; and this awareness of common interest and mutual
benefit results in a foundation of goodwill.
According to Jeffrey Schuman (2003) trust results from experiencing fair

behavior by the other party and acceptance of the other party’s rights and
interests. The creation of shared goals and strategy, especially in the initial stage
of a relationship, facilitates collaboration on the level of the individual and on the
level of the community as a whole. As such, a common business understanding
provides an essential condition for the development of trust within the
relationship. This understanding fosters mutual goal setting, a willingness to
share information, and the creation of interpersonal trust. Communicating the
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importance of trustworthiness and the qualities it takes to create it throughout the
Collaborative Community underlies trust building.
Rayport and Bernard (2004) explain the importance of customer

interface as competitive advantage in the era of shorter product cycles and fast
commoditization of products. Failing to manage these interfaces to the firm’s
advantage will affect its profits. Lack of proper management of touch points can
cause a churn among the firm’s existing customers. A study of 700 mobile
service customers in Cochin, Kerala reveals that 70% of the customers switched
over to other mobile service because of the customers switched over to other
mobile services because of poor customer service and lack of proper complaint
handling.
According to Scott Davis (2005) companies are forced to differentiate

through innovative touch points and boost brand value at reasonable cost. Hero
Honda’s new scooter “pleasure” aimed at ladies is being sold through “just 4 her”
showrooms where the salesperson is lady thus ensuring much more
personalized service to the target customers.
According to Chaturvedi & Chaturvedi (2005) trust is conceptualized as

a reciprocal orientation and interpretive assumption that is shared, has the
relationship as the object and is symbolized through international action”. Trust is
related to a partner’s perception of the other partner’s abilities, knowledge,
expertise, motives and intentions. It covers the actions that partners will take in
the relationship. Quality of the Interaction is a variable that measures the degree
of the social interaction, which may range from being a close personal friend to a
distant business relationship. A study where the degree of structural bonding
was controlled, found that there was little difference in social bonding between
individuals who saw their partner as a business friend or a close personal friend.
There was a difference in the actions a person would take to support a business
friend than the action she/he would take to support individuals who were
perceived to be more distant and formal business acquaintances.
Harish B (2006) explains the importance of company to identify the

customer touch points and manage those touch points affectively. Companies
63
spend millions of dollars for acquiring or customer but after they behave miserly
when managing those critical touch points. For example, while customer
interactions at the point of sale is usually initiated by company, complaints and
queries are initiated by the customers. It is important to understand that
customer oriented interfaces are more personal in nature and have more impact
on customer satisfaction than company initiated interfaces. Hence, the voice-
integrated services, internet enabled services and customer query response
services should be treated with greater importance.
Raja, Sharma and Shashikala (2006) identify product quality, service

support, product distribution, service personnel, information services and
corporate brand equality as the underlying factors of customer satisfaction. The
article examines the customer satisfaction of mobile handset end users in India.
It is important that technological models of the supply side need to be
supplemented with the views and impact of perceptions from the demand ride of
mobile end users. It ranks the mobile handset users on the basis of various
factors and identifies homogenous subgroups among the end users.
Barlow Moller (2006) in his book “A Complaint Is A Gift” writes that

complaints are mostly viewed as a nuisance by most firms. While complaints are
to be considered as an opportunity to demonstrate the firm’s commitment to
customers, companies often take this event to ruffle customer’s feathers. A
complaint is a strategic tool to increase business and customer satisfaction. But
to do that firms have to get into strong cultural change process.
Beauyean, Davidson and Madge (2006) supports the Mckinsey

research in Belgium, Germany and Italy that positive deviants play an important
role for winning customer’s trust. These deviants occur when customer has a
problem or financial advice either good or bad. By contrast, humdrum
transactions generally don’t offer the same opportunity to create an emotional
bond with the customer. Many companies make the mistake of over-investing in
humdrum transactions but fail to differentiate themselves in the customer
experiences that really matter.
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Moorman, Zaltman and Deshpande (1992), in a study of relationships
between providers and users of market research identify a cognitive and
behavioural dimensions of trust. The cognitive dimension would consist of the
belief in the partner’s reliability (trustworthiness), or credibility which comes from
motivation and knowledge. The behavioural intention, that is the concrete act of
placing trust in the partner and this implies vulnerability in the trustor, the person
doing the trust.
Morgan and Hunt (1994) identify the two different dimensions of the
commitment, they hold that trust also exists in the presence of cognitive
component alone. That is, it would be enough that the buying firm believes in the
honesty and reliability of the supplier firm. The behavioural intention incorporated
in the ‘willingness to act’ would be implicit in the concept of trust itself.
Willingness to rely should be seen as a result rather than one of its constitutive
dimensions.
Fennetean and Gilbert (1997) suggest a distinction between the

cognitive and affective dimensions of trust. They maintain that trust is based on
both knowledge and feelings or emotions that the trustor has in dealings with the
trustee. Second, conversely, leads to the conceptual differentiation of the
concepts of perceived trustworthiness, that is, the degree to which a subject
perceives his partner as trustworthy, trust and trusting behaviour, which is
behavioural manifestation of trust. According to the authors, the three factors
that leads a subject to consider a partner trustworthy are, ability, which relates to
the partner’s competence to supply what the trustor expects, integrity, which
relates to the fact that partner is guided by the principles acceptable to trustor,
benevolence, which relates to the intention of the trustee to do his best for the
trustor, putting to one side his egoistic profit motives.
According to Benni, Hjartar and Laartz (2003) study that mobile-

telecom companies could build within the mobile-services domain might, for
example, charge customers for on-line games (a reusable service, since it
wouldn’t have to be created anew for each game launched), send out big
volumes of automated text messages, and reformat video streams or music so
65
that one service could address a variety of mobile devices. Standardized
application services are just beginning to emerge in mobile telecommunications,
but their value could grow rapidly. Application server software – a similar layer of
reusable IT functions deployed in a multitude of enterprise applications (for
instance, customer-relationship-management systems) – created a $2 billion
market in only a few years.
K. Sridhar (2004) identifies trust as important part of the culture which

involves embedding way of the issues into procedures, policies and practices.
He emphasizes on the trust based strategies for the benefit of long term
relationship. Relationships based on high degree of personal contact often
benefit as they result into reduced perceived risk, contractual safeguards,
customer confidence, emphasize competence, and commitment of the customer.
Singh and Gupta (2004) explain the application of data mining tools on
telecommunication industry. The telecom industry is offering local and long-
distance telephone services to provide many comprehensive communication
services including data and voice. Data mining tools are used for identifying
behaviour patterns of behaviours of different groups of users, the traffic data,
usage of services etc. For the purpose data from applications such as billing,
marketing, sales, fraud management, performance analysis systems, network
switches and customer service across the company.
Das Naryandas (2005) studies the benefits of customer loyalty in B2C

markets vs B2B markets. No doubt, the benefits of customer loyalty are
enormous but the means by which companies create and sustain are not same
as in the consumer markets. In business markets, every customer needs a
customized product, quantity or price. In fact each segment effectively consists
of one customer as compare to consumer market which has large number of
buyers with similar wants, transactions are small in value, mass production,
consumer’s perceptions and companies focus on brands.
According to T. Vekat Ram Raj and G. Radha Krishna (2006) all

customers who have been associated with any company for reasonably a longer
period of time should undoubtedly given priority treatment. In the present era of
66
customer acquisition, corporate have been aggressively pursuing different
customer retention strategies and tools for retaining customers, companies in
India are realizing the fact that retaining an old customer is easier than acquiring
a new one. Hence, most companies have started in feel the need to reward
those customers who have been loyal to them.
Kumar, Venkatesan and Reinartz (2006) disclose that to retain valuable

customers companies should give what they require. Companies that take
advantage of new technology in the right way will doubly benefit. Predicting
customer behaviour is highly unpredictable that companies spend millions
inundating and alienating-customers. So it is very important for companies to
know what to sell, when and to whom.
Anderson, Narus and Rossum (2006) emphasize the importance of

customer value propositions. They present an approach to customer value
propositions that businesses can implement to communicate with resonating
focus, the superior value their offerings provide to target market segments and
customers. Customer value propositions can be a guiding beacon as well as the
cornerstone for superior business performance.
According to Kingstone (2006) the only way to embark on customer-

centric CRM is to understand the importance of customer intelligence by using
integrated analytical applications. The thirst among enterprises for greater
customer insight is hardly new. However, the growing amount of customer data
coupled with the maturation and integration of analytics into CRM applications
has made it a measurable reality. Customer-centric CRM ensures that
companies use insight for more targeted and personalized customer
communications. Again, the coupling of analytics and action is not a new
concept, but the ability to blend analytical and real-time front-office capabilities
without considerable integration or custom development is. It is also critical that
companies provide an easy-to-use foundation to ensure employees have the
right information at the right time for impactful decision-making.
According to author Richard A. Buckinghan (2004) in his book titled

“Customer Once Client Forever” explains that a company will not be hard
67
pressed to search for new clients if it already has a good base of existing clients.
This will help it not only save the precious time but also investment. In fact, you
could expect much more than that. The author’s own experience suggests that
sometimes you may discover that these very clients are more discerning ones,
and are less price-conscious. They may want a fair price, but more importantly,
they want quality-service. And sometimes, to your pleasant surprise they may
want a lifetime relationship also. The author discovered that as he improved his
own organization’s service to his clients not only did the number of prospective
clients calling him increase but the order size was also big. This made selling a
lot easier.
According to K. Sridhar (2004) there has been a growing interest to

cultivate customer relationships. Trust is important because financial institutions
have an implicit responsibility to manage their customers funds and also towards
the nature of financial advice supplied, otherwise referred to as fiduciary
responsibility. Some strategies for establishing and maintaining trust for the
benefit of longer-term relationships include: 1. Reducing the perceived risk. 2.
Offering contractual safeguards. 3. Building customer confidence. 4.
Emphasizing competence. 5. Communication. 6. Signal commitment to the
customer. 7. Resolving conflicts. 8. Make-trust part of the corporate culture.
Making trust part of the culture involves embedding many of the above issues
into the procedures, policies and practice of the financial institution and its
employees. Establishing and maintaining the trust of customers can be very
beneficial in cementing the bond between the customer and the company.
Conversely, breaking the trust of one’s customers can lead to an early end to the
relationship.
As per Hommer and Krause (2004) mobile-telephone companies

tend to consider prepaid service a poor cousin of monthly bill subscriptions, and
it is true that prepaid customers generate, on average, only 35 percent of the
revenue that monthly subscribers do. Some mobile operators even talk about
getting out of the prepaid business altogether. Research suggests, however, that
prepaid customers, when managed properly, can offer a healthy revenue stream
68
whether or not they eventually become monthly subscribers. It was found that
when a carrier implements an effective acquisition program, it could increase the
profitability of prepaid customers by 40 to 80 percent. To turn the prepaid
segment around, companies must choose their customers more carefully
manage the life cycle and clean.
According to Care Sewell (2004) in book titled “Customer For Life”

explains that in order to attract and retain the customers, first a company is
required to differentiate itself from its customers. As the author says special
always wins over general. In the process of doing that it is always better not to
talk of prices in the promotional ads. The best way to let people know how the
company differentiates from its competitors is not by words but by giving
examples of what the company has done in the past. As everyone knows that
word of mouth publicity is effective means of advertising than any other mode, it
is always better to allow outsiders like research organizations or media
periodically and allow them to know what exactly is happening in the
organization. This gives customers a feeling that what the company says is
indeed true as it is supported by these third parties though their reports.
Authors Seybold and Marshak (2005) in their book titled “The Customer
Revolution” explain a customer scenario net is a customer and project-specific
set of interrelated tasks that can be managed via the internet to accomplish a
specific outcome. It’s a particularly dynamic form of e-market. The players
involved and the services offered will depend on the customer’s context. To keep
on track, today’s business must effectively turn information about its customers
into intelligence that can guide the company’s actions. No longer can this be
offline market research conducted leisurely in some back room. The pace of
business now requires that near-real time information be analyzed and
responded to quickly.
Shuman, Twombly and Rottenberg (2005) on their book “Everyone Is

A Customer” explain with the balance of power shifting towards the customer,
companies are realizing that they must collaborate with their customers and
other businesses in designing, developing and delivering the basket of goods
69
and services to profitably satisfy the customers’ needs. While working in the
collaborative community, the ability to develop a relationship and understand the
needs of the customer is the key and customer in such cases refer to every party
which must receive some value from the collaboration. By developing the
business through an iterative process, companies can know more precisely how
to get and retain customers, develop the products and services that satisfy the
customers’ needs and finally deliver and serve the customers.
According to K. Suresh (2005) in his book titled “customers rule”

explain a typical customer purchase decision process starts with need
recognition and progresses through search for information, alternatives
evaluation, purchase, consumption and post-consumption evaluation. It is during
the search process that internet offers a big advantage for customers. Even if the
internet search may not result in e-sales, it might materialize into in-store sales.
For products with limited distribution or appeal, websites prove quite handy for
search. For online evaluation of alternatives, shop robots are quite useful. These
shopping robots generate comparisons of different online sellers along different
parameters such as price, delivery terms and payment particulars. Online
auction sites go a step further and even broker purchases based on the price
range quoted by a prospective buyer.
Author Nagendra V. Chowdhary (2005) the two most important elements

in establishing a customer-centric organization are an enterprise database and a
workforce that can both willingly share information and make a willing
commitment to customers, rather than to products or organizational fiefdoms. It
is a long, hard slog to become – and maintain – a customer-centric organization,
but the result is a much more profitable brand. Some of the examples of the
unique customer-centric service offerings made by companies are General
Motors Vauxhall Division: Managing the Customer Experience Across Channels
and Touch Points, Charles Schwab: Sustain and Manage a Customer-centric
Culture, Hewlett-Packard: Monitor Customers Experience Across Channels and
Touch Points, Dell Computers where customers can configure their own systems
70
according to their requirements are few examples of the companies giving
importance to the customer and developing a customer-centric culture.
Author Algolin (2005) in his book “Trust and Consequences” explain

trust is the most basic element of social contact – the great intangible at the
heart of truly long-term success. Trust is both a process and an outcome; it is at
the heart of dealing with every relationship. The trust acts like an invested
money. If the company has always managed the customers well and provided
them with consistent and trustworthy performance then these customers are
more likely to support the company in times of a crisis. The same holds true for
investors and other stakeholders.
According to Kingstone (2006) the only way to embark on customer-

centric CRM is to understand the importance of customer intelligence by using
integrated analytical applications. The thirst among enterprises for greater
customer insight is hardly new. However, the growing amount of customer data
coupled with the maturation and integration of analytics into CRM applications
has made it a measurable reality. Customer-centric CRM ensures that
companies use insight for more targeted and personalized customer
communications. Again, the coupling of analytics and action is not a new
concept, but the ability to blend analytical and real-time front-office capabilities
without considerable integration or custom development is. It is also critical that
companies provide an easy-to-use foundation to ensure employees have the
right information at the right time for impactful decision-making.
According to Ranjana Kaushal (2006) the industry had sometime back

given its consensus on the same and such sharing by players of infrastructure
(mostly towers) had already been happening in some areas of Delhi and
Maharashtra. The rationale for such sharing: this would ward off the expected
burden of Rs.25,000 crore that the 140,000 towers needed to cater to 200 million
cellular subscribers across the country by 2007.
2.3.2 Relationship Commitment
Porter et al, (1974) explains commitment as central because it not only

leads to such important out comes as decreased turnover. This study borrows
71
the concept of commitment from Morgan and Hunt (1994) who defined
commitment as “an exchange partner believing that an ongoing relationship with
another is so important as to warrant maximum efforts at maintaining it, that is,
the committed party believes the relationship endures indefinitely” and
commitment is central to all of the relational exchanges between the firm and its
various partners.
2.3.3 Shared Value
Shared value is the extent to which partners have beliefs in common

about behaviour, goals and policies are important or unimportant, appropriate or
inappropriate, and right or wrong (Morgan and Hunt, 1994). Shared value has
been treated as a multidimensional construct. In the cellular services of telecom
sector, share value symbolizes the extent is which the company and the
customers share common beliefs on critical values like ethics, security and
privacy.
2.3.4 Customer Skills
In telecom business, companies offer support and service together with

transaction facilities to its customer and reap its benefits. The development of
customer skills has a positive impact on the commitment which customer feels
towards the customer. It is important that there is delightful experience of the
customer during the usage of mobile phone. Consequently, more skills one
acquires, the less Important are functional barriers.
2.3.5 Opportunistic Behaviour
Opportunistic behaviour has its roots in the transaction cost literature, and
is (Williamson 1975) defined as “self interest seeking with guide”. This research
posits that the strong negative relationship exists between organizational
commitment and propensity to leave the organization. As per Mathew and Zajac
(1990) the negative relationship also exists between commitment and propensity
to leave the telecom organization relationship.
As to the switching costs are actually very low in the cellular services, the
Switching costs to an ongoing relationship being viewed as important and
72
generating commitment to the relationship. Therefore, relationship commitment
results when customers perceive the costs of terminating the relationship are
high. An assumption in literature is that a terminated party will seek an
alternative relationship and have “switching costs”, which lead to dependence
(Jackson 1985; Heide and John, 1988) described that switching costs are
exacerbated by idiosyncratic investments, that is, investments are difficult to
switch to another relationship. Also Dwyer et al (1987) proposed that the buyer’s
anticipation of higher switching costs give rise to the buyer’s interest in
maintaining a quality.
• Resist attractive short-term alternatives in favour of the expected long

term benefited.

According to (Keveaney, 1995; Porter, 1985) the varying effects are the
result of the nature of risk that accompanies the establishment of a "relationship"
with a particular service provider. Initial service encounters carry a certain
degree of risk due to the intangible nature of the service product and, the
customer not knowing what to expect in terms of the service outcome.
Uncertainty (and hence risk) is reduced as knowledge is gained with repeat
exposure to the service supplier over time. However, at the same time risk is
reduced due to increased familiarity, risk is also increased because of the
switching costs incurred as a result of long-term service relationships.
According to (Klemperer, 1987) switching costs are defined as the

customer's anticipated time and effort associated with changing service
providers. Switching costs give firms the power to retain their customers, while
potentially raising prices and generating monopoly profits The greater the power
of service suppliers, the greater the likelihood that they are able to dictate the
terms of the service relationship, and hence (from the customer's perspective)
the greater the risk associated with establishing long-term relationships.
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2.3.6 Communication
Egtar (1979) emphasized communication fosters trust by assisting in

resolving disputes and expectations. Farrell and Rusbult (1981)
Communication can be defined as “the formal as well as informal sharing of
meaningful and timely information.” Communication especially timely
communication have used past communication as an antecedent of trust higher
motivation. (Anderson and Narus, 1990) and increased organizational
citizenship behaviours (Williamson and Anderson, 1991), but it also results
from such things that can be influenced by the firm as recruiting and training by
the firm as recruiting and training practices.
2.4 IDENTIFICATION OF RESEARCH GAPS IN LITERATURE
In this research, an attempt is made to test an adaptation of the

commitment trust theory of relationship marketing in the usage of mobile
services in telecom context. Although the main variables were mostly borrowed
from the commitment trust framework (Morgan and Hunt 1994) the dimensions
and the items were adapted significantly to the context of cellular services of
telecom sector.
Following gaps are identified from the survey of literature that will help to
research problem.
2.4.1 Research gaps related to Indian Telecom Sector
Most of the research concentrated on the strong growth of Indian Telecom

Sectors. Further, research is required to study various regulatory, economic and
market forces on Indian Telecom sector and their impact o India mobile users.
Following questions can further the researched in changing environment:
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Table 2.1: Drivers of the New Telephony
Drivers Questions to Consider

Customers How many customers does the company have?
How tightly bound are they?
Are they customers of other competing groups?
Will they adopt new features?
Do they also require the old features?
How much will they spend?
Will new customers be needed?
Economic Climate Is the economy expanding or shrinking?
Are customers able to afford new services?
Will economic initiatives help or hinder the operation?
Is investment capital readily available?
Will this continue, and for how long?
Regulatory environment Are regulations protecting incumbents or encouraging competitors?
If so, will this continue?
Will regulators possibly introduce new barriers to business?
Will costs be driven up to meet mandated requirements?
Assets Is the equipment inventory useful in the new business?
Are upgrades needed?
How extensive are the required investments?
Is the necessary intellectual property in place and protected?
2.4.2 Research Gaps Related to Trust and Commitment
Most of the literature available emphasizes on the trust and commitment

as important aspects in long-term relational exchange between buyer and seller.
But following questions require further research.
• Do trust and commitment are important in relational exchange of mobile

users?
• Do trust and commitment are important in rapidly growing Indian Telecom
industry which is affected by international competition, technological
advances and deregulation of nationalized industries?
• How various socio- demographic factors further affect trust and
commitment?
• What are the managerial implications of trust and commitment theory to
the domain of Cellular users of Indian Telecom Sector?
75
CHAPTER – 3
GROWTH OF INDIAN TELECOM SECTOR
3.1 INTRODUCTION
Globalisation, liberalisation and privatization are the three most spoken

words in today’s world. These initiatives paved way for all-round reforms,
especially in developing economies, like India. These countries realized that
development of effective and efficient means of communications and information
technology is important to push them onto the path of development. The growth
of the telecom sector in India during post-liberalization has been phenomenal.
This research aims to throw light on the factors that contributed to growth in the
segment and presents an insight on the present status of the industry.
3.2 GLOBAL TELECOM INDUSTRY: AN OVERVIEW
With the awareness spreading around the world on the Information and
Communications Technology (ICT), in the later part of the 20th century,
countries, especially the developing ones, began to realize the importance of
an efficient telecommunication network for the development of the economy.
At the dawn of the 21st century, the developing countries started to make
full use of the technology revolution taking place around the world, with many
countries liberalizing the existing stringent policies and regulations. To improve
information and telecommunication technology, 189 countries of the UN met at
the Fifty-Fifty General Assembly on September 2000. A millennium Declaration
was made, according to which the countries reaffirmed their commitment to
improve the living conditions of poor and downtrodden in the world by adopting
intense poverty alleviation programmes. One of the targets of this declaration
was adherent to “In co-operation with the private sector make available the
benefits of new technologies, especially information and communication”. The
indicators that were to be used for monitoring the progress were:
• Telephone line and cellular subscribers, per 100 units of population.
• Personal computers in use for 100 units of population.
76
• Internet user per 100 units of population.
Even before the declaration, many developing countries had started

liberalizing their internal policies to enable efficiency as to affordability and reach
ability of telecommunication system. By 1995, most of the low income
developing countries of the world, made their economies global, by liberalizing
the domestic licensing and important policies on the whole, to facilitate inflow of
foreign capital into the infrastructure sector, especially in the telecommunication
sector. This resulted in a telecom revolution, with countries adopting
liberalization initiatives, experiencing a ‘never-before’ growth in the telephone
network, including the penetration levels. Developing countries today account
for 49% of the total telephone network in the world. While in East Asia (including
China) the total teledensity grew at a rapid pace to reach 27.4 in 2002, the
teledensity grew at a slower pace in South Asia (including India), to reach 4.5 in
2002. This is due to imperfections in government regulatory and licensing
policies in the ‘90s in most of the South Asian countries. While there was
imbalanced development in ICT among the developing countries in individual
growth in telecom, country-wise also showed a partial development, where the
development in other segments apart from cellular was snail-paced. This was
due to phenomenal growth in the cellular segment, whose major contribution
was towards urban telephony.
By the end of 2006, the telecommunication industry had experienced

continuous growth, as well as rapid progress in policy and technology
development, resulting in an increasingly competitive and networked world. It is
true and encouraging that overall, the digital divide has been reduced and
continues to shrink. ITU statistics show that over the last 10 years, the digital
divide between the developing and the developed countries has been narrowing
in terms of fixed telephone lines, mobile subscribers and Internet users. In
contrast to the slow fixed line growth, phenomenal growth rates in the mobile
sector particularly, have been able to reduce the gap that separates the
developed from the developing countries from 27 in 1996, to 4 in 2006. The fixed
line gap has been reduced from 11 to 4 during the same period.
77
Table 3.1: Cellular Tariffs across South – Eastern Countries
S.No. Countries Per Minute Cellular

Tariffs (in US Cents)
1. India 2.5
2. China 3.5
3. Bangladesh 6.5
4. Nepal 6.5
5. Pakistan 8.4
6. Sri Lanka 11.0
7. Bhutan 11.4
8. Maldives 14.4
Source: www.itu.int as on 20th Feb 2006
Table 3.1 explains that the mobile tariffs in India have also become lowest
in the world. A new mobile connection can be activated with a monthly
commitment of US$ 5-6 only.
3.3 TRENDS IN INDIAN TELECOM INDUSTRY
India has become one of the fastest growing mobile markets in the world.
The mobile services were commercially launched in August 1995 in India. In the
initial 5-6 years the average monthly subscribers additions were around 0.05 to
0.1 million only and the total mobile subscribers base in December 2002 stood at
10.5 millions. However, after the number of proactive initiatives taken by
regulator and licensor, the monthly mobile subscriber additions increased to
around 2 million per month in the year 2003-04 and 2004-05.
Table 3.2: Subscriber Base of Fixed and Wireless Services as on Feb,2007
(Subscribers in Millions)
2005-06 2006-07
March Feb. Additions Mar. *March* Dec. Jan. Feb. Addi- Addi- Additions
2005 2006 during 2006 2006 2006 2007 2007 tions tions during
April05- (As per During During April06-
Feb. 06 new Jan. Feb. Feb. 07
policy)
Wireless 52.22# 84.89# 31.21 90.14 98.78 149.50 156.31 162.53 6.81 6.22 63.75
Fixed 46.19 49.45 2.95 50.18 41.54 40.43 40.40 40.39 -0.03 -0.01 -1.15
Total 98.41 134.34 34.16 140.32 140.32 189.93 196.71 202.92 6.78 6.21 62.60
# Excluding WLL-F Subs. * WLL-F subs. Included in Wireless Subs. w.e.f. March 2006
78
Table 3.2 explains the total number of telephone subscribers have
reached 202.74 million at the end of February 2007 as compared to 196.91
million in January 2007. The overall tele-density has increased to 18.26 in
February 2007 as compared to 17.45 in January 2007. In the wireless segment,
6.22 million lines have been provided in February 2007 while 6.81 million lines
were provided in January 2007. The total wireless subscriber (GSM, CDMA &
WLL(F)) base is 162.53 million now. Whereas in the wireline segment with the
minor reduction in subscriber base by 0.01 million lines in February 2007, the
total wireline subscribers are now 40.39 million. During the eleven months of
current financial year 62.60 million lines have been added as compared to 35.93
million lines provision in the same period during the financial year 2005-06.
On the lines of previous three years, the year 2005-06 also witnessed a
phenomenal growth in the subscriber base for mobile services, and also
increase in the subscriber base of Fixed including WLL (F) services as well as
Internet services, thus building on the growth trend in subscriber base
experienced since mid-1990s. The mobile Industry crossed the 90.14 million
subscriber mark at the end of the financial year in comparison to the subscriber
base of 52.22 million at the end of March, 2005. It added 37.92 million
subscribers in the financial year 2005-06 registering an annual growth rate of
about 72.62%. The subscriber base of Fixed including WLL (F) services also
grew from 46.19 million at the end of March, 2005 to 50.17 million at the end of
March, 2006, registering a growth rate of about 8.62%. The Internet subscriber
base in the country as of 31st March, 2006 stood at 6.93 million as compared to
5.55 million during the previous year, and registered an annual growth rate of
about 25%. The tele-density at the end of March, 2006 reached to the mark of
14% as compared to 9.08% at the end of previous year recording an increase of
4.92%. This annual growth in tele-density is unprecedented and this was largely
due to steep increase in mobile subscriber base and the various innovative tariff
plans launched by the mobile service providers. This growth in tele-density also
becomes very significant in view of the fact that overall increase in tele-density
during the 50 years period from 1948 to 1998 on a much smaller population base
was only 1.92%.
79
3.4 TRANSITION OF INDIAN TELECOM INDUSTRY
The history of the Indian Telecom sector goes way back to 1851, when
the first operational land lines were laid by the then British Government in
Calcutta. With independence, all foreign telecommunication companies were
nationalized to form Post, Telephone and Telegraph, a monopoly run by the
The Indian Telecom Sector, like most other infrastructure sectors is

controlled by the state. The Department of Telecommunications (DoT), reporting
to the Ministry of Communications (MoC) is the key body for policy issues and
regulation, apart from being a basic service provider to rest of country. By an act
of Parliament, the Telecom Regulatory Authority of India (TRAI) was formed to
be the regulatory agency. The key players in this sector are depicted in the
figure 3.1:
Figure 3.1: Regulatory Bodies of Indian Telecom Industry
Ministry of
Communi-
cations
Regulating
Telecom Bodies of Department of
Commission Indian Telecommuni-
Telecom cation
Industry
Telecom
Regulatory
Authority of
India
80
Ministry of Communication: All the operations of this sector come under
the purview of MoC. It is responsible for all major policy changes, planning,
supervision, spectrum control, etc.
Department of Telecommunications: DoT was formed in 1985 when the

Department of Posts and Telecommunications was separated into Department of
Posts and Department of Telecommunications. Till 1986, it was the only telecom
service provider in India. It played a role beyond service provider by acting as a
policy maker, planner, developer as well as an implementing body. In spite of
being profitable, non-corporate entity status ensured that it did not have to pay
taxes. DoT depends on Government of India for its expansion plans and funding.
Its pivotal role in the Indian telecom sector has got diluted after formation of
TRAI- Telecom Regulatory Authority of India.
Telecom Regulatory Authority of India: TRAI, was founded to act as an

independent regulatory body supervising telecom development in India. This
became important, as DoT was a regulator and a player as well. Founded by an
Act of Parliament, the main functions of the body was to finalize toll rates and
settle disputes between players. An independent regulator is critical at the
present situation as the sector witnesses competition.
The operations of this sector are determined as under the Indian

Telegraph Act of 1885 – A document buried in the sands of time. The next major
policy document, which was produced, was the National Telecom Policy of 1994,
a consequence of the ongoing process of liberalization.
The Telecom Commission: The Telecom Commission was set up by the

government of India vide Notification dated April 11, 1989 with administrative
and financial powers of the government of India to deal with various aspects of
Telecommunications. The Telecom Commission and the DoT are responsible for
policy formulation, licensing, wireless spectrum management, administrative
monitoring of PSUs, research and development and standardization/validation of
equipment, etc. The multi-pronged strategies followed by the Telecom
Commission have not only transformed the very structure of this sector, but also
81
have motivated all the partners to contribute in accelerating the growth of the
sector.
The other entities in the sector under the control of MoC are the two
public sector telecom equipment manufacturers, namely Indian Telephone
Industries (ITI) and Hindustan Teleprinters Ltd. (HTL). Both these companies are
facing financial problems because of product obsolescence, poor management
and over staffing. Telecommunications Consultants India Ltd. (TCIL), another
PSU was founded in 1978 to undertake consultancy services in the field of
telecom.
3.4.1 Objectives of the National Telecom Policy
The objectives of the NTP 1999 are as under:
• Access to telecommunications is of utmost importance for achievement of

the country’s social and economic goals. Availability of affordable and
effective communication for the citizens is at the core of the vision and
goal of the telecom policy.
• Strive to provide a balance between the provision of universal service to

all uncovered areas, including the rural areas, and the provision of high-
level services capable of meeting the needs of the country’s economy.
• Encourage development of telecommunications facilities in remote, hilly

and tribal areas of the country.
• Create a modern and efficient telecommunications infrastructure taking

into account the convergence of IT, media, telecom and consumer
electronics and thereby propel India into coming an IT superpower.
• Convert PCOs, wherever justified, into Public Tele information centers

having multimedia capability like ISDN services, remote database access,
government and community information systems, etc.
• Transform in a time bound manner, the telecommunications sector to a

greater competitive environment in both urban and rural areas providing
equal opportunities and level playing field for all players.
82
• Strengthen research and development efforts in the country and provide
an impetus to build world-class manufacturing capabilities.
• Achieve efficiency and transparency in spectrum management.
• Protect defence and security interests of the country.
• Enable Indian telecom companies to become truly global players.
3.4.2 Telecommunication Services
Today tariff for telecommunication services in India is one of the lowest in

the world. The Indian consumer has immensely benefited from such lower tariffs
which has also been a major factor for explosive growth in the sector. Following
is the list of services offered by both GSM and CDMA operators:
• Telephone services
• NSD/ISD services
• Computerised trunk services
• Pay phones
• National & international leased lines circuits
• Telex
• Telegraph services (manual & automatic)
• X-25 based Packer Switched Data Network (NET)
• Gateway Packet Switched Data Services (GPSS)
• Gateway Electronic Data Interchange Service (GEDIS)
• Gateway E-Mail and Store & Forward FAX Service (GEMS-400)
• Concert Packet Service (CPS)
• Satellite based remote area business message network
• Electronic Mail
• Voice Mail
• Audio-text
• Radio paging
• Cellular mobile telephone
• Public mobile radio trunked service
83
• Video-tex
• Video conferencing
• V-SAT
• Internet
• ISDN
• INMARSAT mobile service
• INMARSAT data service
• Home country direct service
• Intelligent Network (IN) services
Table 3.3: Indian Telecom Services at a Glance (FY 2006-07)
Telecom Services FY 2005-06 FY 2006-07 (in Growth

(in crores) crores)
Fixed Access 32,684 33,715 3
Cellular 22,787 35,879 57
National Long Distance 6,231 9,017 45
International Long Distance 3,830 7,251 89
Internet Access 1,592 1,619 2
VSAT 369 443 20
Radio Trunking 30 38 27
Total Services Revenue 67,523 87,962 30
Table 3.4 exhibits various Indian telecom services for the period 2005-
2006 and 2006-2007 and growth for this period. Major telecom services of Indian
economy cover-fixed access, cellular national long distance, international long
distance, internet access, VSAT, radio trunking. Amongst them, international
long distance services and cellular services have recorded 89 and 57% growth
respectively,
3.4.3 Revenue Analysis
According to the revenue reports submitted by the service providers,

revenue, net of “pass through” and service tax, from GSM services is about Rs.
5308 Crores in the quarter ending Sept-05 as against Rs. 4842 Crores in the
84
June-05 quarter, translating into a growth rate of 9.63%. Growth in average
subscriber base in the corresponding period has been 11.77%.
Table 3.4: Average Revenue Per User (ARPU)

(Rupee / per month during the quarter)
Postpaid Prepaid Blended ARPU

Circle Jun’05 Sept’05 Jun’05 Sept’05 Jun’05 Sept’05
Circle A 605 599 286 283 375 364
Circle B 561 554 265 276 327 330
Circle C 605 576 321 310 410 386
Metro 836 803 290 292 446 438
All India 662 646 282 284 381 374
• The all India blended ARPU per month has gone down by about 1.9%
from Rs. 381 in the quarter ending June-05 to Rs. 374 in the quarter
ending Sept-05.
• The lowest blended ARPU per month is in Circle B (Rs. 330), which is
higher than the previous quarter’s corresponding figure (Rs. 327). The
highest blended ARPU is in Metro (Rs. 438).
• Monthly ARPU in postpaid segment has declined from Rs. 662 in June-05
to Rs. 646 in Sept-05. On the other hand, prepaid segment has shown a
marginal increase in ARPU per month from Rs. 282 in June-05 to Rs. 284
in Sept-05.
• Gap between postpaid and prepaid ARPU is getting smaller. Postpaid

ARPU has been 2.27 times that of prepaid ARPU in the quarter ending
Sept-05, as against 2.35 as existed in the previous quarter. Such gap is
lowest in Circle C (1.86%) and highest in Metros (2.75%).
3.4.4 Teledensity
Teledensity denotes the number of telephones per 100 units of

population. National teledensity refers to total teledensity of the country, which is
an average of the total urban and the total rural density. Teledensity is an
economic indicator of development. Higher teledensity, denotes developed and
85
accessible means of communication, which means the country is coherent with
the development goals. In India, deliberate attempts made by the government to
increase teledensity have been fruitful with private participation in both fixed and
mobile telephony.
While the urban teledensity was more than 20, the rural teledensity was
lesser than 2, contributing to a national teledensity of 8.02, for the year 2005-06.
This has increased from a mere 1.28 in 1995-96. The increase in urban
teledensity was primarily due to heavy cellular penetration since 2000-01. The
specific information as to the teledensity as pertaining to different circles for
year2005-06 is as follows:
• Six states have teledensity greater than 10% - Punjab, Kerala, Andaman
& Nicobar, Himachal Pradesh and Gujarat.
• Five states have teledensity greater than 7% - Andhra Pradesh, Haryana,

Karnataka, Maharashtra and Tamil Nadu.
• Eight states have teledensity lesser then 3% - Assam, Bihar, Chattisgarh,

Jharkhand, Uttar Pradesh, North East-II, Orissa, and West Bengal.
• Teledensity in the metros was – Delhi 42%, Mumbai 36%, Chennai 39%
and Kolkata 19%.
3.4.5 Value Added Services
Service providers are facing the severity of dipping voice ARPUs and high
subscriber churn rate. With new and cheaper schemes being introduced
everyday, mobile content and applications are the only way to keep a subscriber
glued to particular services. Innovation is the key here; the more innovative a
service, the more popular it gets and more revenue it brings in. Presently value
added services (VAS) accounts for 10-12% of the operator’s revenue, but in the
next 10 years the growth of mobile industry is expected to be driven by mobile
VASs as they will form 60% of the revenue of the mobile network operators.
The Indian mobile content market is estimated to be around Rs.1,000

crores. It registered a growth around 80% in 2006 and is expected to grow at the
same pace. According to researches, Indian content market, which
86
encompasses music, gaming videos etc, is expected to grow 10 times in the next
five years.
3.4.6 Village Telephones
More than 70% of the country’s population lived in village. The growth of
telephone network in rural India has not been quite encouraging post-
privatisation. While the urban area has the most developed form of
communication, nearly 20% of the rural area is left unlinked. The rural
teledensity was at a very low 1.55. This is due to very slow or no (in some areas)
cellular penetration. In the fixed line segment also, the only service provider for
rural areas was the public sector service provider. The private players were not
interested to invest in rural areas, due to earning sensitivity issues. More than
increasing the individual phones, the government is initially concentrating to
increase the number of public phones in villages, namely (Village Public
Telephones) VPTs.
As on March 31, 2006, 86% of the villages is connected through VPTs

and the number of Direct Exchange Lines (DEL) stood at 122.72 lakhs. Out of
the total, 98% of the VPTs is provided by BSNL, the government owned service
provider, whereas the private players have contributed to only 2% of the total
VPTs.
3.4.7 Thrust on broadband, high-speed Internet
• The Telecom Regulatory Authority of India (TRAI), has projected that

Internet subscriptions will increase from 4.1 million in 2003 to 6 million in
2005, to 18 million by 2007 and to 40 million by 2010.
• Broadband subscriptions will rise from 0.2 million in 2003 to 3 million in

2005, to 9 million in 2007 and to 20 million by 2010.
• Broadband will be a preferred carrier with the central government’s US $

600 million budget for e-governance in India, favouring the rising use of
online education, telemedicine networks and connectivity for rural
knowledge centers.
87
• Greater use of online service in commerce, industry and transportation
will create a boom for broadband. The regulatory for suggested a range of
measures for an open-sky policy for DTH, VSAT and uplinking using
satellites that should boost broadband.
3.4.8 Growth in Telecom manufacturing
• The Indian telecom equipment manufacturing segment has registered

threefold production growth from US $ 1.3 billion to US $5.26 billion
during the period 1996 to 2006.
• There will be an increased manufacturing of telecom equipment to meet

the projected telecom expansion.
3.4.9 Broadcasting sector
• In the last decade since satellite TV started, there has been a huge
growth in subscriber number. Cable/satellite homes are estimated to be
40 million. India has close to 100 million TV homes currently. Total
viewership at 400 million is among the highest in the world. The Radio
Committee preparing the draft rules for radio broadcast, is expected to
moot 26% FDI kin FM Radio, FM stations may be allowed to beam news
contents.
3.5 PRIVATIZATION AND DISINVESTMENTS OF BASIC SERVICES
Basic services were opened to private participation in1994 by dividing the

country into 21 telecom circles and allowing one private operator per circle to
compete with DoT. An important event in the history of Indian Telecom scenario
took place on the 19th of February 1996, when the Supreme Court of India
upheld the rights of the government of India to privatise the telecommunication
sector, and also ruled out the DoT decision to adopt duopoly, by allowing
unrestricted entry into the sector, the licensing to be based obviously on the
conditions laid down by the DoT.
The industry is definitely witnessing a shift in importance toward private

sector. Latest statistics show that the erstwhile telecom giants – the government
owned BSNL and MTNL are wading through rough weather, with a whopping 4
88
million surrenders in the fixed line segment for the year ending December 2006.
The firms, which were notorious for bureaucratic attitudes and lethargic
operations, are now pulling up their sleeves to fight the competition, before it is
too late.
The policy and regulatory regime established by the Government and the
regulator has led to speedy growth of subscriber base of the incumbent Public
Sector Undertakings as well as that of the private sector operators.
Figure 3.2: A comparison of Private and Public Sector Undertaking

Subscriber base for the period (1998-2006)
90
Subscriber Base (in million)
80
70
60
50
40
30
20
10
0
1998 1999 2000 2001 2002 2003 2004 2005 2006
Private Subscriber Base Year PSUs Subscriber Base
Source: www.dot.com as on 25th Dec 2006
The figure 3.2 shows the growth in subscriber base of private operators
and public sector undertaking. Private operators have also shown remarkable
growth in a highly competitive environment. The overall growth in the subscriber
base of private operators during 1998-2006 was 78.36 million comprising of 7.92
million fixed subscribers and 70.44 million mobile subscribers. Private operators
have contributed very largely to post 1998 growth in mobile services due to the
obvious cost and fast deployment advantages. During the period 1998-2006, the
absolute growth in subscriber base of PSU operators was 43.28 million
comprising of 23.58 million fixed subscribers and 19.70 million mobile
subscribers.
89
With the entrance of private players in the market, the competition is
further stiffened, and the players are eying the market to make hay when the sun
shines. With the advent of competitive environment in the industry, the most
excited are the consumers, who are emerging the kings in the industry. They are
not only given alternatives to choose, but they also become the deciders of the
fate of players, who do not provide them the quality of service they expect. At
this juncture it is imperative to analyse the shift in pattern of consumer decision-
making and choice, and also the strategies adopted by the players to satisfy
them, in order to gain an edge in competition.
Disinvestments of PSU’s in the telecom sector has been undertaken in

February 2002, with the disinvestments of VSNL by bringing down the
government equity to 26% and the management of the company was transferred
to Tata Group, a strategic partner. The basic service was opened up for
competition. Thirty three basic service licenses (31 private and one each to
MTNL and BSNL) were issued as on December 31, 2001. Out of 31 licenses
issued to private sector, 25 have been signed in 2001-02 (April-December). Out
of the 21 circles, the circles neglected by the private players were, Assam, the
North Eastern region and Jammu & Kashmir. Disinvestments and privatization
have brought following benefits:
• Lower prices – It has been witnessed across most industries that

competition helped in lowering the prices.
• Increased efficiency – In deregulated industries or license based cost plus

regime there was no incentive to shed inefficient assets and reduce
overheads. The advent of competition forces an industry to eliminate
inefficient and unproductive assets.
• Greater innovation – The deregulation in telecom industry gave birth to

the greatest innovation period in the past 20 years. New technologies,
standards, data services, new devices, CRM solutions and creative
bundling have all been the result of competition in telecom industry.
90
• Telecom is high technology industry. Telecom equipment is highly
complex to design and needs the expertise of both telecom and
computing fields. With the advent of competition, tremendous innovation
in services was made possible by improving the quality of technology by
the players.
• Telecom industry is services industry, hence the good quality services to

the customer and the customer relationship management is the key and
competition has totally changed the definition of service in Indian telecom
industry. The quality of service has improved by leaps and bounds.
3.6 FOREIGN DIRECT INVESTMENT (FDI)
The transition-trend in the economy that had resulted out of liberalization,

privatization and demonopolisation placed huge capital requirements, especially
for private ventures, which could not be met from domestic sources alone.
Hence, foreign investors were invited to take part in contributing to the capital
requirements of the telecom companies.
As per the FDI policy for the Telecom Sector, investment up to 49% is
permitted in Basic, Cellular and other value added services, which is hiked to
74%; up to 74% is permitted in Internet, infrastructure and radio paging services
and up to 100% is permitted in manufacturing, Internet service, voice and
electronic mail, based on certain conditions for fulfillment as a part of licensing
and security requirements, laid down by the Department of Telecommunications,
Government of India. Several announcements were made relating to policy
change covering change of ADC from per minute charges to revenue share, and
mobile number portability. FDI ceiling increment has led to an increase in FDI in
mobile services whereas ADC has resulted in reduction of mobile tariffs in the
country. On the policy front, per minute ADC on domestic calls was changed to
revenue share regime. And the percentage charged is 1.5% of AGR (adjusted
gross revenue).
The Indian entrepreneurs in the Telecom sector, used the provision of FDI
to the fullest possible extent, and the FDI inflow into the sector was the second
highest for the period 2003-04, after the petroleum, oil refinery sector. The
91
distribution of FDI inflow into various service areas upto March 2006, with
percentages is shown in the table given below:
Table 3.5: Service-wise Actual Inflow of FDI upto March 2006

(in millions)
S.No. Service/Item FDI (Rs.) %

1. Basic Telephone Service 3937 3.96
2. Cellular Mobile Telephone Service 26646 26.78
3. Radio Paging Service 910 0.91
4. E-Mail Service 688 0.69
5. VSAT Service 281 0.28
6. Cable TV Network+Internet 1704 1.71
7. Satellite Telephone Service 481 0.48
8. Radio Trunking Service 71 0.07
9. Manufacturing & Consultancy 15784 15.86
10. Holding Companies 48420 48.66
11. Other Value Added Services 227 0.23
12. Automatic Route 361 0.36
Total 99509
Source: www.investindiatelecom.com as on 3rd April 2006
Table 3.5 explains that during the year 2006, 926 approvals for FDI were
given amounting to a huge sum of Rs.57,260.14 crore as total approvals, out of
which Rs.99509 crores actually flew in to the economy for the period.
With 74% FDI, India has seen huge investments from players like Vodafone
in Bharti Airtel, Temasek Holdings in Tata Teleservices, Orascom in HTIL, Maxis
in Aircel, and Telekom Malyasia Berhad in Spice. Vodafone Group secured
around 10% interest in Bharti Tele-Ventures for an investment of approximately
Rs.6,700 crore. Temasek Holdings (Temasek), through its wholly owned
subsidiary, Aranda Investments (Mauritius) has taken a 9.9% stake in Tata
Teleservices for an undisclosed amount. Maxis has invested 26% in the
enlarged share capital of the AircelGroup for $280 mn. And later, Maxis along
with an Indian partner is planning to acquire the remaining 74% for Aircel for
$800 mn. Maxis acquired additional 34% for $422 mn and rest 35% through SPV
92
for $378 mn. Telekom Malaysia Berhad has acquired 49% stake in Spice
Communications for $178.8 mn.
3.7 FUTURE GROWTH OPPORTUNITIES OF INDIAN TELECOM SECTOR
As per TRAI, two other associated aspects for market growth are
availability of spectrum and availability of resources for network rollout and
expansion. The government is currently looking into these two areas. The 79%
hike in FDI has been cleared by the government to ensure continuous flow of
investments to expand the reach of the mobile operators.
To realize full market potential and achieve the forecasts, telecom

operators have to work on a segmented approach and focus on the five key
strategies given below:
1. Mobile in the hand of every urban youth (age group 15 to 24 years).
2. Mobile in the hand of every executive/businessman/ skilled worker.
3. Mobile in every household with income above Rs. 6000.
4. Mobile penetration in every town/village, with a population of over 5,000.

5. Mobile Phones affordable and available wherever mobile services
available.
The real potential of these strategies based on segmentation, if adopted

in the next 15 months:
3.7.1 Mobile in the Hand of Every Urban Youth
India is a young country and 26.5% of the population belongs to the age
group of 15-24 years. Of the estimated total individuals of age above 12 years
(707 million), youths consist of 187 million in both urban and rural markets. Of
this segment, 30% stay in urban areas and ensuring a mobile connection in the
hand of each youth would mean 56 million mobile phones. This means that a
whopping number of people can be tapped by the mobile phone industry;
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Mobile Market Potential Estimated: 56 million.
3.7.2 Mobile in the Hand of Every Executive
In India, over 6.9% are employed and working as executive, managers,

businessmen, skilled workers, shop owners and self-employed professionals.
This translates to 48.78 million individuals (707 mn x 6.9%), who can afford a
mobile phone in the country.
Mobile Market Potential Estimated: 48.78 million
3.7.3 Mobile in Every Household with Income above Rs. 6000
India has approximately.180 million households. Out of it, 5.9% have an

income of over Rs .6000 across the country This translates to 10.62,
households, who can afford a mobile connection, at Rs.500, if tapped effectively.
Mobile Market Potential Estimated: 10.62 million
3.7.4 Mobile Penetration in Every Town and Village with a Population of

over 5000
India has over 8,000 towns with a population of over 5000 and offers the
potential to sell a minimum of 1,000 mobile connections within a couple of years
of launch. However, currently only 1,600 towns are covered under the mobile
network by all service providers put together. This is where great opportunity lies
untapped and the first entrant is bound to gain substantially. The potential
untapped is 6400x Avg.l000 connections = 6.4 million mobile connections in the
next 15 months.
Mobile Market potential Estimated in Towns: 6.4 million
In the same way; India has over 6,30,000 villages and out of it over
14,000 villages have a population of over 5000 and offer the potential to sell a
minimum of 500-1000 mobile connections within a couple of years of its launch.
However, currently very few villages are covered under the mobile network, as
the focus of service providers is to cover towns with high income first. With huge
penetration of consumer goods happening in the villages, the aspiration levels of
the people are soaring and a great opportunity lies untapped. However, very few
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mobile operators have ventured to cover villages till now. Just a simple
calculation will reveal that an untapped potential of 14,000 x Avg.750 = 10.5
million mobile connections in the villages in the next 15 months.
Mobile Market Potential Estimated in Villages: 10.5 million
The Total Market Potential through Four Focus Segments: 132.3 million.
3.7.5 Mobile Phones to be Made Available and Affordable
As discussed earlier, the major impediment for growth in the industry is

affordability and availability of handsets. Both mobile operators and handset
vendors have to work together to address these issues and ensure that handsets
are available wherever mobile services are offered so that customers have ready
choice arid it is easy to acquire a connection.
The service providers have to work out aggressive pricing/handset

bundling options, which make mobile phones more affordable when compared to
the current's situation. Today; service providers are riding on the piggy back of
handset vendors, allowing them to dominate the situation. However, in countries,
like China, Indonesia, Malaysia, Thailand, where there is a high growth in the
mobile phone industry it is the service providers who tie up with all the handset
vendors and offer attractive pricing to customers, which is equally reciprocated
by the vendors. These combined efforts have really expanded the market.
In addition to making mobiles affordable, handset vendors have to come

up with second hand phone options at very low prices with guarantee, to make a
large number of entry level customers go mobile. The average Indian income is
still around Rs. 6000 per month and an average Indian cannot afford a mobile for
Rs. 4000. The "go mobile" price limit for these set of customers is Rs. 2000 and
handset vendors have to work out suitable strategies to bring out handsets in
this price range to support the service providers in expanding the market. Table
3.6 explains the potential of Indian Telecom Market.
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Table 3.6: Potential of Indian Telecom Industry
S. Facts Data Assumptions

No. in mn
1. Total population of India as per 2001 1027
census
2. Total population of India without 0-6 870 157 mn are in the 0-6 year old
year olds
3. Total population by Dec. 2003 (without 887
0-6 year olds)
4. Total estimated population by Dec. 905 At 1% growth per year
2006 (without 0-6)
5. Estimated No. of households in India 176.4 Source: NCAER
by March 2000
6. Total estimated no. of households by 194.0 10% growth over March 2000/NCAER
December 2006 growth
a. Urban households 60.2 31% of total households
b. Rural households 133.9 69% of total households
c. Urban households with assets like 47.0 4 million – the very rich, 40.8 million –
scooter, car, radio and TV, the consuming class, out of the total
classified as the very rich and the urban households, growing by 5%.
consuming class
d. Rural households with assets like 37.8 12 million – the very rich, 34.8 million –
scooter, car, radio and TV, the consuming class, out of the total
classified as the very rich and the rural households, growing by 5%
consuming class
7. Potential urban market for mobile 51.24 (Assuming 2 mobiles per households
(HH) x 4.2 mn very rich +1 mobile per
HH x 42.84 million consuming)
8. Potential rural market for mobile 37.32 (Assuming 2 mobiles per households x
1.26 million very rich + 1 mobile per
HH x 34.8 million consuming class)
Total Mobile penetration by December 9.8%
2006
Source: The Marketing Whitebook – Businessworld
If pre-owned mobiles are offered in the same way by mobile operators

along with connections, there will be a huge expansion in the market. It is
expected that at least 50% of the existing mobile owners will return their old
handsets and take a new set for better utilization and these mobiles can help
bring in customers who expect "low entry cost" to go mobile. The mobile phone
96
industry should adopt this strategy so that the overall mobile market expands
exponentially.
3.8 GROWTH OF TELECOM SECTOR IN PUNJAB
Despite the presence of only four mobile operators in Punjab (against six
in most of the other states), due to aggressive market expansion and
segmentation strategy followed. The total mobile population has crossed 8.21
million by October 2006 for a population of just 34.35 million. Most states
industrially advanced states are at just 6% mobile penetration, clearly illustrating
the lead achieved by Punjab. Today; the mobile network covers every urban
town and most of the rural villages and all highways in Punjab, which has
enabled the state's economy to grow substantially. The aggressive "marketing of
the services by operators has ensured that most of the youth, executives and
families in Punjab own a mobile.
However, to replicate the market penetration in Punjab nationally and

grow exponentially to cross 100 million customers (it will be just 10% penetration
nationally against 13% achieved already by Punjab) by December 2006, the
service providers have to specifically target the four customer segments listed
above and arrive at aggressive marketing programs to reach out to them.
However, it is not going to be easy and needs support in several areas:
1. To ensure that every youth has a mobile, service providers have to offer
services like SMS/MMS at low cost/free and ensure that the total mobile
bill for the youth does not cross Rs.300-400 per month, which is the
maximum this segment of customers can afford from their pocket money;
2. In the same way, for executives/businessmen, to tap the full potential, it is

essential that services like Closed User Group, National Closed User
Groups, low STD/ISD rates, Fixed cost for Network calling etc., are
offered so that they can lap up the services and go mobile soon.
3. To ensure that every household has a mobile connection, it is essential

that the utility of mobile phones is increased through better STD and ISD
rates vis-à-vis landline, friends and family offers, special rates to landlines
etc., with easy/low deposit schemes to acquire these facilities.
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4. To ensure that the penetration targeted in towns and villages is achieved,
service providers have to invest in network expansion and reach out on
priority; to exploit the untapped potential in these markets.
5. To expand the network to a large number of towns and villages by all the
operators, network sharing should be allowed by BSNL and the
government should allow 74% FDI in mobile companies for easy access
to funds.
6. Lastly; both service providers and handset vendors have to combine their
strengths and address the issue of market expansion on priority and
launch aggressive programs to make mobile phones affordable and
available to all.
The need of the hour is a new revolution in mobile telephony and it is

imperative that service providers work towards the same and make it a reality.
3.9 LEADING PLAYERS OF INDIAN TELECOM INDUSTRY
Competition in telecom services driven by regulatory initiatives and

technological advancements continued to push the prices down. The trend was
more visible in mobile and long distance services. The competitive pressures
also made the service providers to be more innovative in their tariff offerings.
Products like “2 year prepaid coupons” and “Life Time Validity” schemes
launched after 2003 made mobile services more affordable and also led to large-
scale subscriber acquisitions. The National Long Distance (NLD) tariff has
further declined subsequent to the implementation of new ADC/IUC regime
effective from 1st March 2006.
As competition in the telecom sector intensified, service providers took

new initiatives to woo customers. Prominent among them were celebrity
endorsements, loyalty rewards, discount coupons, business solution and talk
time schemes. Table 3.7 explains that by 2004, Bharti Tele-Venture emerged as
an unprecedented leader commanding the largest marketing share in GSM
service providers
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Table 3.7: Subscriber Base of GSM Service Providers
for the period 2004-2006
Sr. No. Service Provider 2004 2005 2006
1. Bharti Group 6.504 9.826 19.58

2. BSNL 5.254 8.461 17.16
3. Hutchinson Group 5.148 7.179 15.36
4. Idea Group 2.733 4.696 7.37
5. BPL Group 1.883 1.030 1.34
Source: www.trai.gov.in as on 20th Dec,2006
The Cellular GSM services reached the 69.19 million subscriber mark at
the end of the financial year 2005-06, as compared to 41.07 million during the
previous year. It added around 28.12 million subscribers during the year, with a
remarkable growth of around 68.47%. Reliance and Bharti have acquired
licenses in all 23 service areas for offering mobile services. Bharti and Reliance
are the only private operators which providing services in All India, i.e., 23
service areas.
In Cellular GSM services, in terms of subscriber base and market share,

Bharti with 28.30 million subscriber base remains the largest GSM operator
followed by BSNL, Hutch, and Idea with subscriber base of 24.80 million, 22.20
million and 10.65 million, respectively. The subscriber base of all the GSM
operators except of BSNL in Punjab has increased.
Table 3.8: Subscriber Base of CDMA Operators for the period 2004-06
Sr. No. CDMA Operator Number of Subscribers in Millions

2004 2005 2006
1. Reliance Communications 6.474 9.115 17.41
2. Tata Tele Services 0.625 0.805 6.85
3. BSNL 2.022 0.4337 0.49
4. MTNL 0.102 0.181 0.11
5. HFCL 0.03 0.0485 0.06
6. Shyam Telelink 0.0276 0.025 0.03
Source: www.trai.gov.in as on 20th Dec,2006
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The Table 3.8 explains the CDMA Subscribers Base for the period of
2004-2006.It has reached 25.95 million during the year 2006 as against 6.474
million for the year 2004. Reliance remains the largest CDMA operator followed
by Tata Teleservices and BSNL with subscribers’ base of 6.85 million, 0.49
million respectively. CDMA subscriber base recorded a growth of 33.2% during
this period.
Bharti, a part of Bharti Enterprises, was the first to launch its cellular
service on July 7, 1995. Bharti's cellular services were launched under the brand
name ‘Airtel’ and were categorized as pre-paid services and post-paids services.
The postpaid service was launched under the brand name ‘Airtel’ whereas its
prepaid services were launched under the brand name "Magic". As of March
2005, the company operated in 23 telecom circles and had the largest subscriber
base of all service providers at over 9.8 million.
In 1995, came Hutchinson Max Telecom – a joint venture between

Hutchinson and Max India Limited. Hutchinson Max Telecom launched its
cellular services in Mumbai under the brand name "Max Touch". In 2000,
Hutchinson entered into a joint venture with Essar called Hutchinson-Essar to
further expand its operations in India. The venture acquired cellular licenses in
Delhi, Kolkata and Gujarat to become one of the largest cellular businesses in
the country by the year 2000. In 2001, Hutchinson-Essar acquired a license to
extend its operations to Chennai, Kamataka and Andhra Pradesh. In 2002, the
company brought all its cellular services across India under the brand name
"Hutch". Hutch operated in 13 telecom circles with a subscriber base of over
seven million in March 2005.
The Tata group of companies also launched their cellular service called
Tata Cellular in the year 1995. In 1996, the Tata group was the first to launch
CDMA mobile services in India, under the brand name Tata Teleservices
(TTSL). TTSL's telephony services included mobile services, Fixed Wireless
Phones (FWP), public booth telephony and wireline services. The company
launched a prepaid card under the Tata Indicom brand with the tagline "100%
Sacchai True Paid". Later in May 2002, Tata Cellular was merged with Birla-
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AT&T giving rise to a brand called "Idea Cellular" (Idea). The conglomerate's
prepaid service was launched under the brand name "Idea Chit-Chat". As of
2005, Idea operated in 8 telecom circles with a subscriber base of over 4.6
million.
Reliance Infocomm, a telecommunications subsidiary of Reliance

Industries limited, launched its cellular service called Reliance India Mobile (RIM)
on December 28, 2002. The service was launched under the "Dhirubhai Ambani
Pioneer Offer" wherein customers could avail handsets along with the mobile
connection by paying in monthly installments. This one-of-its-kind offer to the
customers generated a huge response. In February 2004, RIM launched its
prepaid service, extending its network through the GSM technology. Following
table 3.9 explains the reach of the selected telecom service providers.
Table 3.9: Coverage of Leading Mobile Service Providers
Company/ No. of No. of Cumulative Technology No. of

Group cities/town retailers as Investment as on Circles
on Mar’06 Mar’06 (Rs crore)
Mar’06 Mar’07
Bharti 4,000 5,200 400,000 15,923 GSM 23
Hutch NA NA NA NA GSM 16
Reliance 3,824 5,200 255,000+ 14,799 GSM,CDMA 23
Tata Tele 2,500 4,000 NA 10,000+ GSM,CDMA 20
NA stands for not available

Source: Cyber Media Research
3.9.1 Airtel
With liberalization of the Indian economy in the early nineties the telecom
industry was thrown open to the private sector. This saw the entry of a number of
major players into the services division. The Bharti group was one of the first to
seize the opportunity provided by the government of India and established Bharti
Tele-Ventures to provide the full range of telephony services for both mobile and
landline connections.
Bharti Tele-Ventures Limited (BTVL) was incorporated on July 7, 1995

with its subsidiaries operating across India. The company was started to promote
101
investments in telecommunications services. With just 4 mobile operators In the
country, the potential for Bharti is immense. Through its subsidiaries, it has
licenses to provide GSM services in 15 of the 22 telecom circles in India.
AirTel, its mobile arm, cakes care of all cellular services co ensure that
communication is faultless and cost efficient. The strategic objective is co
achieve and maintain leadership in the industry within the country. In September
2004, Bharti Televentures limited has brought all its telecom services under the
‘AirTel'’ brand umbrella. With the result of this unified branding strategy, all the
other supplementary brands like Touchtel, IndiaOne and Mantra cease to exist.
Under this the services would be called AirTel Mobile Services, AirTel Telephone
& Broadband services, AirTel Long Distance Services, AirTel Enterprise
Services. This strategy has been in accordance with the government policy to
launch unified licensing, which will allow cellular and landline companies to offer
their individual services under the same license.Like any other telecom service
provider, Bharti also considers information technology a key driver of its
business.
Gartner analyst, Kobita Desai says, “Developed markets like Australia and
Hong Kong have a mnthly churn rate of 3 percent, which usually occurs in the
postpaid segment. India, being an emerging market, is driven by the prepaid
segment.” The churn in telecom industry is due to many factors, viz., age,
profession, usage pattern, etc., which the present CRM system cannot address
effectively. Hence, there is a need for exclusive CRM software which can handle
other factors also. Both prepaid and post-paid sections are inherent in mobile
telephony business. According to industry experts, the prepaid segment is a
crucial growth area as they provide up to 55 percent of the operators' revenue
3.9.2 Tata Teleservices Limited
The telecom industry today is all about big numbers and volumes-read
customer satisfaction. This spells good news for telecom service provider TTSL,
which believes in top-of-class customer services. Tata Teleservices Limited
(TTSL), a part of the Tata Group – one of India’s largest business houses with
more than 80 companies in the fold-is a premium telecom services provider.
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TTSL was established by Tata Industries to leverage the liberalised regime in the
telecom sector and to provide quality telecom (data/voice) services to retail as
well as corporate customers. TTSL provides basic telephony services and
complements and competes with the state-owned Bharat Sanchar Nigam
Limited (BSNL) in the circles it operates in. In the past two years the company
has been successful in entering major towns in Andhra Pradesh. Around a year
ago, it started providing basic and WLL-based services in New Delhi. TTSL has
also applied for fresh basic and WLL licenses in eight more telecom circles.
TTSL has so far been able to provide approximately two lakh connections
in Andhra Pradesh alone. In this circle, the number of subscribers is growing at
more than 70 percent year-an-year. As part of its expansion plans, TTSL
successfully bid to establish its high quality telecom infrastructure in five other
circles (states). TTSL has already invested $400 million for rolling out services in
Andhra Pradesh and plans to invest another $1.7 billion over the next five years
to expand its services across the planned service areas. TTSLS plans for service
roll-out cover 56 percent of the incumbents (BSNL/MTNL) telephone subscriber
base, and accounts for about 65 percent of the incumbents' revenues. If
estimates do work in the expected direction, the company is certain to have
nearly five to six million customers over the next five years.
With a significant presence across the telecom value chain and the
synergies after tile acquisition of VSNL by the Tata group, TTSL is planning to
expand the range of its coverage and services; advanced communication
solutions now include seamless integration of voice, video, data and IP systems.
As a basic telephone services provider, TTSL provides the backbone for India’s
corporate leaders such as GE Capital, Wipro, Magnacom, Citicorp Overseas
software (now called Orbitech), Dr. Reddy’s Labs, Standard Chartered Bank,
Motorola India Electronics, TCS and Satyam, in addition to servicing the telecom
needs of retail customers.
But the entire telecom infrastructure was of little use until customers were
serviced satisfactorily. After putting in place the required equipment and
infrastructure, TTSL was committed to setting up a CRM solution that would
103
carer to the varied needs of its vast customer base, “Oracle E-Business Suite
has played an important role in helping TTSL meet its customer service needs,
thereby making it a joy for customers to interact with our company,” says S
Ramakrishnan, managing director, Tata Teleservices.
In order to build its customer base, the TTSL management understood the
need to have robust infrastructure in place to ensure quality customer service.
This was to be a key differentiator for TTSL in the competitive landscape it was
operating in. This was also a compelling need for the private sector service
provider, as customer expectations were very high.
The TTSL management had the foresight to realise the potential of

leveraging customer interaction to attract, maintain and enhance tile lifetime
value of the customer. The growth and wide acceptance of the service presented
TTSL with all excellent opportunity to use customer interaction 'to enhance
customer relationships as well as leverage the opportunity to upsell and cross-
sell flew products and offerings. To meet the strategic objectives of the customer
care experience there was a need to have integrated processes and systems in
place to:
• Ensure that customers could access and get information about various
services easily.
• Provide quick and accurate resolution of customer requests.
• Meet all the commitments.
• Get things right the first time, all the time.
• Constantly find ways to reduce costs and increase productivity to

generate and safeguard company revenues and profitability.
• Ensure that every interaction with the customer results in delight,

produces joy and enhances the customer’s relationship with TTSL.
Translating the corporate mission was a challenging task. TTSL realised

very early that a CRM strategy required robust and scaleable tools. There was
also a need to align all processes towards customer-centricity ethics and also to
ensure that this got, translated into faster, quicker and better service levels
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3.9.3 Hutchison Essar Limited
In September 2005, Hutchison Essar snapped up BPL Communicatinos

for $ 1.154 billion, including cash considerations and assumed debt. It also
signed a conditional agreement to acquire Essar Spacetel for $6 million. This
marked another phase of consolidation in the Indian telecom industry. For
Hutchison Essar, this deal is a win-win situation. In addition to acquiring BPL’s
subscribers base, the footprint expands to seven new service areas. It has been
taken over by Vodafone in February, 2007.
At the moment, Hutchison Essar operates in 13 circles. The merger

creates a pan-India presence covering 23 circles, bringing it on par with Bharti,
BSNL and Reliance Infocomm. This deal also offers an additional 2.8 million BPL
subscribers, automatically hiking Hutch’s total subscriber base to 12.5 million
(Hutchison Essar’s subscriber base as of August 2005 was 9.7 million). This
pushes it to second position behind Bharti with its 14.07 million subscribers.
BSNL is thus relegated to third position in GSM.
In the past year, five entities have been clubbed under Hutchison Max
Te1ecom Limited (HMTL), which has now been rechristened Hutchison Essar
Limited. This is the holding company of all five 'Hutch affiliates in India. The
group has brought its services under the “Hutch” banner, except in Mumbai circle
where it uses the “Orange” brand name.
After completion of this internal consolidation and after formalisation of the

acquisition, a long-awaited initial public offers (IPO) could be on the cards.
According to company sources, the first quarter of 2006 is being considered as
an appropriate time for an IPO.
Hutchison is also keenly focused on increasing its subscriber base. It has

recently launched services in Uttaranchal. Also on the drawing board are plans
to step up investments in West Bengal (excluding Kolkata circle) where it has
earmarked Rs. 4 billion. Apart from expansions, Hutch has also introduced a
range of innovative products and value-added services.
105
3.9.4 Reliance Infocomm Limited
In May 2004, Reliance Infocomm Limited, one of the leading in the fastest
growing telecommunications companies in the country, was conferred the ‘Most
Promising Service Provider of the Year 2003 (Asia Pacific) award at the Asia
Pacific Technology Awards instituted by Frost & Sullivan. Given that Reliance
Infocomm Limited received the award within the first year of the launch of its
telecommunications services in India, this international recognition was
considered on mean achievement for the company.
Analysts felt that the Primary reason for the success of Reliance
Infocomm in the Indian telecom industry was its aggressive marketing strategy.
Reliance Infocomm used all the tactics which it could to win over the hearts of
millions of customers (10.3 million subscribers as per reports of January 2005) in
India. It offered a first of its kind technology in India (The CDMA technology)
attractive products.
Reliance Infocomm provides a host of communication services. From

restrictive wireline connectivity to the all pervasive wireless technology; from
public service telephone network to broadband; from analogue to digital
transmissions; and from plain voice telephony to virtual networks. The company
aims to set up a nationwide, world-class broadband communication
infrastructure comparable with the best in the world.
The first phase begins in 2003 and aims at providing the Reliance India
Mobile service through a nationwide wireless network reaching out to nearly 90%
of India’s population. The second phase beginning in mid 2003, aims at bringing
about enterprise netway revolution, by providing 100 mbps Ethernet links. The
final phase begins in end 2003, with the objective of bringing about a consumer
convergence revolution, by providing high speed Ethernet links to enlighten
every home an entire range of television channels, high-speed telephony, audio
conferencing, videoconferencing and video on demand.
Priced to suit, the common man's budget, and backed these up with
massive aggressive promotion campaigns, using every possible medium of
communication. It continuously flooded the markets with new offers, new
106
schemes, particularly during the festive seasons, and thereby ensured that it
always caught the attention of people. In the process, Reliance Infocomm
Limited demonstrated the importance that marketing discipline holds in the
success of a company to the academic and corporate community alike. In 2006,
Reliance Infocomm has been renamed as Reliance Communications Limited.
3.10 CONCLUSION
As a result of the liberalization, privatization and demonpolisation

initiatives taken by the government of India, the telecom sector is experiencing a
historical growth. The trend is expected to continue in the segment, as prices are
falling as a result of competition in the segment. The beneficiaries of the
competition are the consumers, who are given a wide variety of services. In the
years to come, the country is predicted to witness a communication revolution,
which would increase the teledensity to match that of the developed world.
107
CHAPTER – 4
A CONCEPTUAL FRAMEWORK OF TRUST

AND COMMITMENT
4.1 INTRODUCTION
“Building bridges between manufacturers and their suppliers

requires unprecedented levels of trust and commitment in placing the fate
of company in the hands of people who aren’t even employees”.
Davidow and Malone (1992)
“Trust is the sine quo non of the digital economy”
Japcott, Ticoll and Lowy (2000)
The past decade has witnessed a major directional change in both

marketing theory and practice considered by Webster (1992) to represent a
“fundamental reshaping of the field” and by other a genuine paradigm shift
(Kotler, 1991; Parvityar, Sheth and Whittington, 1992) the turn is towards
relationship marketing, a concept that encompassing relation contracting
(Macaneil, 1980), relational marketing (Dwyer, Schurr and Oh, 1987), working
partnership (Anderson and Narus, 1990) symbiotic marketing (Varadrajan and
Rajaratnam, 1986), strategic Alliances (day, 1990) co-marketing alliances
(Bucklin and Sengupta, 1993) and internal marketing (Berry and Parsuraman,
1991) which recognizes that global competition occurs increasingly between
networks of firms (Thorelli, 1986). Indeed, Achrol (1991) forecasts the rise of
“true market companies” within networks. A fundamentally specialized
organizations whose inter relationships, being driven are “held together and
coordinated by market-driven focal organizations by means of “norms of sharing
and commitment based on trust. “To be an effective competitor in the global
economy one requires to be trusted co-operator. As McKinsey & Co. strategists
(Bleeke and Ernst, 1993) put it, “For most global businesses, the days of flat out,
predatory competition are over. In place of predation, many multinational
companies are learning that must collaborate to compete.”
108
Relationship marketing has been defined in several ways. Berry (1983)
defined relationship marketing as attracting, maintaining and enhancing
customer relationships. He advocated a number of relationship strategies,
including a core service strategy, customisation; relationship pricing, and internal
marketing. Similarly, Jackson (1985) referred to industrial relationship marketing
as efforts oriented towards strong, lasting relationships with individual accounts.
Predominant among most definitions of relationship marketing is the view that
buyer-seller encounters accumulate over time, and opportunities exist to
transform individual and discrete transactions into relational partnerships
(Czepiel, 1990). This view supports the notion that a relationship exists when an
individual exchange is assessed not in isolation, but as a continuation of past
exchanges likely to continue into the future. Perceived in this way, customer
acquisition is only an intermediate step in the marketing process, with the
ultimate goal being to strengthen already strong relationships, and to convert
indifferent customers into loyal ones (Berry and Parasuraman, 1991).
Consequently, relationship marketing may be used to describe a plethora of
marketing relationships, such as those between a firm and its buyers, suppliers,
employees and regulators (Morgan and Hunt, 1994).
In order for me concept of relationship marketing to be useful, Berry

(1983) identified three conditions should exist, and they are:
1. the customer must have an ongoing or periodic desire for me service;
2. the service customer must control me selection of me supplier; and
3. there must be an alternate supplier
The importance of relationship marketing has emerged as a major focal

point for business strategy during the past decade, and this can be attributed to
factors such as the blurring boundaries between markets or industries (Day,
2000), an increasing fragmentation or markets (Buttle, 1999), shorter product life
cycles, rapid changing customer buying patterns and more knowledgeable and
sophisticated customers (Buttle, 1999; Gronroos, 1996). In addition, other
explanations for the shift towards relationship orientation in marketing include the
continuing growth of the service economy as well as the increasing competition
109
in the current marketplace (Christopher et al., 1991; Lehtinen, 1996). Regarding
practice, firms are also considering the adoption of relationship marketing
strategies as critical for sustaining a competitive advantage (Sharma et al.,
1999). Due to above reasons, the philosophy of relationship marketing is being
advocated more and more strongly by marketers (Gummesson, 1994).
The management of customer relationships in the service industry is

critical for many reasons. Firstly, as Lovelock (1983) points out, many services
by their very nature require ongoing membership (e.g. insurance, cable
television). Even when membership is not required, customers may seek on-
going relationships with service providers to reduce their perceived risk in
evaluating services characterised by intangibility and credence properties. In
addition, due to the intangibility of services, customer evaluative criteria are less
well articulated, and the appraisal of the value received is much more subjective
(Berry, 1980; Zeithaml et al., 1993). Therefore, customers are more likely to form
relationships with individuals and with the organisations they represent than with
goods (Bendapudi and Berry, 1997). Finally, employees play a major role in
shaping the service experience as the interface between the service and its
provider is inseparable; therefore, the service setting is especially conducive to
customers forming relationships in services. Consequently, there have been
calls for greater attention to the role of relationships in services (Gronroos, 1990;
Gummesson, 1987a; Sheaves and Barnes, 1996).
However, despite the growing importance and emphasis on relationship

marketing, the operationalisation of this concept is still unclear. While much work
has been focused on generic issues, little concentrates on areas s that are
influenced by the nature of the industry or transaction concerned (Pressey and
Mathews, 2000). In addition, there has been a lack of studies that examined
relationship of variables at different levels of relationships (Macintosh and
Lockshin, 1.997). Splitting the relationship variables into different levels will allow
for the identification of basic differences in person-to-person (interpersonal) as
well as person-to-firm (company) relationships. The recognition of these
differences has practical implications for managers as they can direct their
110
efforts to improving important attributes on both the interpersonal as well as
company level. In doing so, firms striving for true customer intimacy can find
ways to bridge the perceptual gap between the two levels of relationships
highlighted above.
One of the objectives of current marketing practices is building up

relationships. This is based on the belief that it costs several times more to find a
new customer than to retain an existing customer. A customer who leaves, is
taking away the profit-making potential of the company. Therefore, it is argued,
that it is worthwhile to try to retain existing customers, to build strong long-term
relationships with them, so that they remain loyal. If there is a normal attrition of
say, 25 per cent in customers, reducing that by 5 per cent can mean substantial
savings by way of increased purchases, reduced operating costs, and more
references. A study by the All India Management Association showed that
among service firms, reducing customer defections by just 5 per cent boosted
profits by 25 per cent to 35 per cent.
Relationships of a long standing nature, are built on trust and confidence

that one’s interests are safe in the hands of the other. Attempts to exploit the
other’s compulsions mitigate against this principle. When a supplier refuses to
take advantage of the customer’s difficulties, customer’s trust is created.
Relationships are based on closeness and trust. Local retailers have this
advantage as their customer loyalties are strong. It is possible for them to source
well-known products directly from the manufacturers and sell them under their
own brands, thus displacing national brands with their own local brands
4.1.1 Concept of Trust and Commitment
The notion of trust as a critical success factor in service relationship was

introduced by Parasuraman et al. (1985), who suggested that customers should
be able to trust their service providers, feel safe in their dealings with their
service providers, and be assured that their dealings are kept confidential. Many
conceptualisations and operationalisations of trust in relationships have been
offered in the literature (e.g. Crosby et al., 1990; Doney and Cannon, 1997;
Moorman et al., 1993). This research conceptualisation is consistent with extant
111
research in that trust is defined in terms of a customer’s perceptions of service
representative confidentiality, honesty, integrity and high ethical standards.
The perceived level of trust between exchange partners is an important

criterion for understanding the strength of marketing relationships which has
been defined in a variety of related ways. Trust is a fundamental relationship
model building block and is included in most relationship models (Wilson, 1995).
Trust has been defined in various ways in the relationship marketing literature:
“as a willingness to rely on an exchange partner in whom one has confidence”
(Moorman et al., 1992); and as “the belief that a partner’s word or promise is
reliable and a party will fulfil his/her obligations in the relationship” (Schurr and
Ozanne, 1985).
These two definitions of trust draw on Rotter’s (1967) classic view that
trust is:
“…a generalized expectancy held by an individual that the word of

another … can be relied on.”
Both definitions also stress the importance of confidence on the part of

the trusting partner. Anderson and Narus (1984) focus on the perceived outcome
of trust when they define it as:
“… a partner’s belief that the other partner will perform actions that will
result in positive outcomes, as well as not take unexpected actions that would
result in negative outcomes.”
Indeed, one would expect a positive outcome from a partner on whose

integrity one can confidently rely on (Morgan and Hunt, 1994). Other authors
have defined trust in terms of shared values (Heide and John, 1992; Morgan and
Hunt, 1994), mutual goals (Wilson, 1995), opportunistic behavior (Dwyer et al.,
1987; Morgan and Hunt, 1994), making and keeping promises (Bitner, 1990,
1995; Bitner et al., 1994) and uncertainty (Crosby et al., 1990; Parasuraman et
al., 1985). Trust is also viewed as central in studies conducted by the Industrial
Marketing and Purchasing Group (Ford, 1990; Hakansson, 1982). Using a
similar definition of trust, Gwinner et al. (1998) find the psychological benefit of
confidence and trust to be more important than special treatment or social
benefits in consumer relationships with service firms.
112
Finally, Gronroos (1996) suggests that:
“…the relationship philosophy approach relies on … a trusting relationship

with customers … instead of an adversarial approach to customers…”
As can be seen, trust is an important construct in relational exchange

because relationships characterised by trust are so highly valued that parties will
desire to commit themselves to such relationships (Hrebiniak, 1974).
Undeniably, because commitment encompasses vulnerability, parties will seek
only trustworthy partners (Morgan and Hunt, 1994). To support this notion, trust
has been posited as a major determinant of relationship commitment (Achrol,
1991; Miettilia and Moller, 1990; Morgan and Hunt, 1994). Further, Moorman et
al. (1992) find that trust by marketing research users in their research providers
significantly affected user commitment to the research relationship.
Similar to trust, commitment appears to be one of the most important

variables for understanding the strength of a marketing relationship, and it is a
useful construct for measuring the likelihood of customer loyalty as well as for
predicting future purchase frequency (Dwyer et al., 1987; Gundlach et al., 1995;
Morgan and Hunt, 1994). While commitment is the most common dependent
variable used in buyer-seller relationship studies (Wilson, 1995), there has been
no agreement as to the proper measurement scale to use for this
multidimensional construct (Hocutt, 1998). Furthermore, to date, there has been
a lack of attention to the paucity of consumer research on the definition and
measurement of commitment (Kelley and Davis, 1994; Morgan and Hunt, 1994).
In the relationship marketing literature, commitment has been described in

many ways. Moorman et al. (1992), define commitment as an enduring desire to
maintain a valued relationship. The term “valued relationship” emphasized the
belief that commitment exists only when the relationship is considered important.
This implies a higher level of obligation to work a relationship and to make it
mutually satisfying and beneficial (Gundlach et al., 1995; Morgan and Hunt,
1994). Since commitment is higher among individuals who believe that they
receive more value from a relationship, highly committed customers should be
willing to reciprocate effort on behalf of a firm due to past benefits received
113
(Mowday et al., 1982). This perspective is consistent with Dwyer et al.’s (1987)
definition of commitment in a buyer-seller relationship as the existence of:
“…an implicit or explicit pledge of relational continuity between exchange

partners.”
A great deal of research in the services literature has documented the

importance of trust in maintaining satisfactory service provider/customer
relationships (e.g. Crosby et al., 1990; Doney and Cannon, 1997; Dorsch et al.,
1998).
4.2 DISCRETE VS. RELATIONAL EXCHANGE
In relationship marketing, relationships can be classified into two types i.e.

discrete transactions and relational exchange. Whereas discrete transaction
relationship is one which has a distinct beginning, short duration, and sharp
ending by performance. And in relational exchange “traces to previous
agreements reflecting an going process” categorized with reference to a focal
firm and relational exchange in supplier, lateral, buyer and internal partnerships.
Figure 1 shows ten discrete forms of relationships marketing.
Figure 4.1: Discrete Forms of Relationship Marketing
Supplier Partnerships
Goods Service
Suppliers Suppliers
Business Competitors
Units
Employees Government
Focal Firm
Financial Ultimate
Customers
Intermediate
Customers
Internal Partnerships Buyer Partnerships
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Figure 4.1 explains the relational exchanges between the focal firm and
various agencies for building discrete relationships.
1. The partnering involved in relational exchanges between manufacturers

and their goods suppliers as in “just-in-time” procurement and total quality
management.
2. Relational exchanges involving service providers as between advertising

and research agencies and their clients.
3. Strategic alliances between firms and their competitors as in technology

alliances; co-marketing alliances and global strategic alliances.
4. Alliances between an firm and non-profit organizations as in public-

purpose partnerships.
5. Partnerships for joint research and development as between firms and

local, state governments.
6. Long-term exchanges between firms and ultimate customers, as

particularly recommended in the services marketing area.
7. Relational exchanges of working partnerships as in channels of

distribution.
8. Exchanges involving functional departments.
9. Exchanges between a firm and its employees, as in internal marketing.
10. Within firm relational exchanges involving such business units as

subsidiaries, divisions and strategic business units.
Relationship marketing is probably most advanced within the telecom

sector. In UK, BT has worked hard at defending itself against the price war
waged by Mercury. Both of them introduced various loyalty schemes to retain the
existing customers. Both of them are strongly emphasizing on various
relationship marketing practices. There highlight the need to balance existing
and new customers in order to achieve maximum long-term profitability.
115
Figure 4.2: The Hypothesized Realm of Buyer Seller Relationship
High
Seller maintained relation

Bilateral relationship
maintenance
Buyer’s market
Buyers Motivational
Investment in relationship
Low High
Buyer maintained relation
Discrete exchange
(spot contract)
Seller’s
Market
Relationship marketing has been defined in different areas. For example

in services marketing area, Berry (1983) states, “Relationship marketing is
attracting, maintaining and in multi-service organization enhancing customer
relationships”. In industrial marketing, Jackson (1985) refer to relationship
marketing as “marketing oriented toward strong, lasting relationships with
individual accounts. The Hypothesized realm of buyer seller relationship also
supports the need of both seller maintained relationship as well as buyer’s
motivational investment.
4.3 THE RELATIONSHIP DEVELOPMENT PROCESS
Relationships evolve through five general phases identified as (1)

Awareness (2) Exploration (3) Expansion (4) commitment (5) Dissolution. Each
phase represents a major transition in how parties regard one another.
116
4.3.1 Phase-I Awareness
Awareness refers to party’s recognition that another party is a feasible

exchange partner. Situational proximity between the parties facilitates
awareness. Just as a family is more likely to be acquainted with adjacent
neighbour than those down the street, buyers are apt to become aware of local
merchants and brands advertised in frequently viewed media.
Figure 4.3: Stages in buyer and seller relationship development (based on

Dwyer, F.R., P.H. Schurr and S. Oh (1987) ‘Developing Buyer and Seller
Relationships’, Journal of Marketing, 51, April, pp. 11-27
Commitment
Exploration
Awareness
Dissolution
Expansion
Strength of Relationship
Time
4.3.2 Phase-II Exploration
In this phase, potential exchange partner first considers obligations,

benefits, burdens and possibility of exchange. The exploration phase is
conceptualized in five sub processes.
• Attraction
• Communication and bargaining
• Development and exercise of power
• Norm development
• Expectation development
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4.3.3 Phase-III Expansion
Expansion refers to the continual increase in benefits obtained by

exchange partners and to their increasing interdependence. The five sub
processes introduced in the exploration process also operate in expansion
phase. The range and depth of mutual dependence also increases. The
intensive business growth strategies of market penetration and product
development depend on the process of expansion. For example, Procter and
Gamble depended its relationship with telemarketing distribution.
4.3.4 Phase-IV Commitment
Commitment refers to a implicit or explicit pledge of relational continuity

between exchange partners. At the most advanced phase of buyer-seller inter-
dependence the exchange partners have achieved a level of satisfaction from
the exchange process that virtually precludes other primary exchange partners
who could provide similar benefits .Three measurable criteria of commitment are
inputs, durability and consistency. The first criteria of commitment is that the
parties provide relatively high inputs to the association in terms of economic,
communication ad emotional resources. Durability presumes the parties can
discern the benefits attributable to the exchange relation and anticipate an
environment that will abet continued effective exchange. Given these
expectation the parties can bond themselves such way as to encourage their
continued investment in the relation .The third aspect of commitment is the
consistency with which the inputs are made to the association. In spite of
increased costs of transaction, decreased obstacles and changing personal
needs the consistency accrue benefits of certainty, efficiency and effectiveness.
4.3.5 Phase-V Dissolution
The relationship development process has great consequence when they

occur after parties have reached the status of interdependence characteristic of
the status of the expansion and commitment phases. Termination of personal
relationships is a significant source of psychological , emotional and physical
stress.
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4.4 TRUST AND COMMITMENT AS KEY MEDIATING VARIABLES
This research labels trust and commitment as key mediating variables of

relationship marketing which focuses on one party in the relational exchange and
that party’s relationship commitment and trust. Commitment and trust are “key”
because they encourage marketers to
a) Work at preserving relationship investments by co-operating with

exchange partners.
b) Resist attractive short-term alternatives in favour of the expected long-

term benefits of staying with existing partners and
c) View potentially high risk action as being prudent because of the belief
Therefore, when both commitment and trust-not just one or the other-are
present, they produce outcomes that promote efficiency, productivity and
effectiveness. In short, commitment and trust lead directly to co-operative
behaviours that are conductive in relationship marketing success.
The pioneering work by Reichheld, a partner at the US consulting firm and

by Sesser, a professor at the Harvard Business School (Reich held and session
1990) suggested that there is a high correlation between customer retention an
company profitability. They investigated the impact on profitability of improved
customer retention in a number of organizations and found that customer
retention improvement in a number of organizations and found that customer
retention improvement of just a few percentage points had a dramatic impact on
improvement of profitability. They found five percentage points increase in
customer retention, for a range of service businesses, yielded improvement in
profitability, in net present value (NPV) terms, from 20% to 85%.
Reichheld and Sasser identified of reasons why there is such as dramatic

effect on profitability by improved retention rates. Factors include:
− Retained business
− Sales, marketing and set up costs are amortised over a longer customer
lifetime
119
− Increased expenditure over time
− Repeat customers often cost less to service
− Satisfied customers can provide referrals
− Satisfied customers may be willing to pay a price premium
Figure 4.4: Benefits of Loyal Customers
LOYAL CUSTOMERS
• Better responsiveness
CRM to customer needs Relationship • Increased ARPU*
Program • Increased customer • Stronger brand attitude
satisfaction • Less price sensitive
• Educe customer chum
Customer
Database
Cross-selling
• Increase ARPU*
Data • Cost reductions

Mining
Better Target Marketing • More target communications
Market Research • New customer insight

• Early warning system
In some cases such managers work within service business where the
profit impact of retention has already been identified such as banking, credit
cards, insurances broking, commercial laundries, etc. (Reichheld and Sasser
1990). However, uncomfortable with direct analogies being made between their
business and other industrial sectors. In particular, they wish to learn whether a
given improvement in retention (for example, five percentage points will have a
low improvement in NPV profitability (say 10-20%) or a high improvement in
NPV profitability (say 80-100%)
4.5 CATEGORIES OF TRUST
Trust is part of a large set of interpersonal risk assessment perspectives,

which can be categorized into three groups: (1) Calculative Trust (assessing how
incentives affect another person’s behavior); (2) Empathetic Trust (merging
one’s behavior); and (3) Knowledge based Trust (using our personal
120
recollections or other reliable information to help understand a person’s or
group’s competencies, preferences, and moral habits).
4.5.1 Calculative Trust
The economic approach treats trust as risk analysis that focuses on

human behavior. This “calculative” view defines trust as a level of subjective
probability with which and agent (A) assesses that another agent or group of
agents will perform another agent or group of agents (B) will perform a particular
action that affects A’s own actions.
Economist Oliver Williamson (1993) calls this “calculative trust,” “an

economic view of behavior that has merit to the extent that others behaviors can
be well under stood as rational and measurable. In these cases, trust can
smooth the progress of private information sharing. Will beyond levels that sheer
market calculative ness could do.
4.5.2 Empathetic trust
Empathetic trust assumes that one party has fully internalized the other
party’s preferences, and demands that both parties commit to building and
maintaining a personal relationship. Thus, information sharing and joint problem
solving can occur with very little transaction cost-if empathetic trust rules.
Edward Deming (1986), have `long argued that using rewards and punishments
tends destroy the internalization of others; preferences destroy the internalization
of others preferences essential for deep trust.
4.5.3 Knowledge-based Trust
More recently, Francis Fukuyama (1995) described economic networks a

fundamentally bade on reciprocal moral obligations, a generalized trust among
unrelated people. Certainly a capacity for honoring commitments ranks highly as
a desired character trait, and in the fast paced e-business economy the
willingness of and individual to share private information quickly and completely
is greatly valued.
121
4.6 TRUST AND PROFITABILITY
The November 2000 issue of the business magazine executive excellent

contained four articles titled: “Customer Love,” “Customer Intimacy,” “Customers
for life,” and “Customer Loyalty.” Each consultation author extolled the virtues of
retaining customers for the longest period possible by developing strong
relationship with them.
However, there is considerable anecdotal evidence to suggest that many

customers do not want a relationship with most of the products and services
(and thus the companies) that they buy. People simply don’t have the tie,
products and services. The reason for this is that relationships are special. They
involve two way trust, commitment, the sharing of information, partnership
among people of equal standing, and so on.
Contrary to the line of argument that long-life customers are more

profitable, Grahame Dowling and Mark Uncles caution that loyal customers will
often be less profitable. One reason for this is that they may expect a reward for
their loyalty. This may be in the form of a price discount (for accumulated
volume) or extra free services.
Various studies indicate that it is the amount of money that a customer

spends with a company drives their lifetime value to the company regardless of
how long they have been or are likely to be a customer of the company. Hence,
marketing strategy should be focused on revenue generation and transaction
cost management in preference to the creation of loyal customers. Database-
driven CRM has claimed significant improvements in identifying profitable (and
unprofitable customers, increasing the efficiency and effectiveness of target
marketing, and increasing customer satisfaction. Critics have argued that:
gathering an extensive amount of information about customers (“a 360 degree
view”) raises concerns about privacy: managers concentrate less on what
customers really want (their latent and expressed needs) and more on what the
data patterns suggest they may want; and relationships seldom develop beyond
satisfaction into rapport because they start with the seller “targeting” the
customer and then attempting to seduce them. CRM programs have also
122
experienced some significant implementation problems. Examples include, the
high turnover rates of staff in call centers, the frequent cost blowouts associated
with constructing a data warehouse, problems implementing new information
technology systems, and the high cost involved in designing anew information
The top row of effects leads to building relationships with customers and
thus established customer loyalty. Depending on the type of product (e.g., high
or low involvement), this relationship can be based on an affective association.
123
CHAPTER – 5
RESEARCH FINDINGS OF THE STUDY
5.1 BRIEF OVERVIEW
Trust and commitment and related key mediating variables – shared

value, communication and opportunistic behavior play significant role between
both prepaid and postpaid subscribers. These key-mediating variables of trust
and commitment vary telecom service provider-wise and city-wise.
The above hypotheses are studied using normal-curve, Cronbach α,

ANOVA, chi-square, t-test, spearman’s rank correlation and Pearson’s
correlation coefficient. With the help of these techniques various hypotheses can
be tested.
Part-A presents results of trust and commitment from the subscriber’s

perspective. Part-B discusses findings from dealers’ viewpoint and Part-C
explains results of data of telecom service provider.
(PART-A)
5.2 RELIABILITY FOR DATA COLLECTED FROM SUBSCRIBERS
Prior to analysis of the results, the research instrument was tested for its
reliability. Several measures of reliability can ascertain the reliability of a
measuring instrument. These include test-retest method, equivalent forms, split
halves method and internal consistency method. Of all the above methods, the
internal consistency method requires only one administration and consequently
is supposed to be most effective, especially in field studies. Moreover, this
method is considered to be the most general form of reliability analysis. In this
method, reliability is operationalised as internal consistency, which is the degree
of inter correlation among the items that constitute a scale. Internal consistency
is estimated using a reliability coefficient called Cronbach’s alpha. An alpha
value of 0.60 and 0.70 or above is considered to be the criterion for
demonstrating internal consistency of new scales and established scales
124
respectively. Reliability of the measurements was determined using Cronbach’s
Coefficient alpha. In this research, following are the research for the data
collected from subscribers:
RELIABILITY ANALYSIS - SCALE (ALPHA)
Number of Cases = 311.0 Number of Items = 61
Cronbach Alpha = .9676
Cronbach's α (alpha) is an important psychometric instrument to measure

the reliability of data. The reliability coefficient indicates that the scale for
measuring trust and commitment is a reliable. So, various statistical tools can be
applied and tested.
5.3 RELATIONSHIP BETWEEN KEY-MEDIATING VARIABLES OF

PREPAID AND POSTPAID SUBSCRIBERS OF SELECTED TELECOM
SERVICE OPERATORS
Degree of relationship was studied between key mediating variables –

shared value, communication, opportunistic behavior, trust and commitment for
prepaid and postpaid subscriber. It covers selected telecom service providers i.e.
Reliance, Airtel, Hutch and Tata Indicom.
Table 5.1: Evaluation of Relationship between Key Mediating Variables of

Reliance Prepaid Subscribers
Shared Opportunistic Relationship

Variables Communication Trust
Value Behaviour Commitment
Shared Value 1 .694(**) .697(**) .793(**) .620(**)
Communication 1 .588(**) .665(**) .610(**)
Opportunistic
1 .843(**) 0.27
Behaviour
Trust 1 .419(*)
Relationship
1
Commitment
**Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).
125
The above table 5.1 shows Pearson’s correlation between key mediating
variables of Reliance prepaid subscribers. The correlation between shared value
and communication (.694), shared value and opportunistic behaviour (.697),
shared value and trust (.793) and shared value and relationship commitment
(.620) is highly significant amongst prepaid subscribers of Reliance. Similarly,
the relationship between communication and opportunistic behaviour (.588),
communication and trust (.665) and communication and relationship commitment
(.610) is highly significant. The correlation between opportunistic behaviour and
trust (.843) is highly significant and trust and relationship commitment (.419) is
significant amongst prepaid subscribers of Reliance. However, correlation
between opportunistic behavior and relationship commitment is non-significant.

Airtel Prepaid Subscribers

Shared Value 1 0.327 .644(**) 0.289 .430(*)
Communication 1 .680(**) .845(**) .591(**)
Opportunistic
1 .566(**) .641(**)
Behaviour
Trust 1 .550(**)
Relationship
1
Commitment
** Correlation is significant at the 0.01 level (2-tailed).
variables of Airtel prepaid subscribers. The above table depicts highly significant
at .01 level correlations between shared value and opportunistic behavior (.644)
and significant correlation between shared value and relationship commitment
amongst prepaid subscribers of Airtel. However, it has non-significant
relationship with communication and trust. Communication is highly significant in
relation to opportunistic behaviour (.680) and trust (.845) and relationship
commitment (.591). Opportunistic behaviour is highly significant in relation to
126
trust (.566) and relationship commitment (.641). Trust is highly significant in
relation to relationship commitment (.550) of prepaid subscribers of Airtel.

Hutch Prepaid Subscribers

value Behaviour Commitment
Shared Value 1 .717(**) .699(**) .645(**) .554(**)
Communication 1 .670(**) .740(**) .730(**)
Opportunistic
1 .714(**) .677(**)
Behaviour
Trust 1 .619(**)
Relationship
1
Commitment
variables of Hutch prepaid subscribers The above table shows highly significant
correlation between shared value and communication (.717), shared value and
opportunistic behaviour (.699),shared value and trust(.645) and shared value
and relationship commitment (.554) of prepaid subscribers of Hutch. Similarly,
the correlation between communications and opportunistic behaviour (.670),
(.730) is highly significant. The correlation between opportunistic behaviour and
trust (.714) and opportunistic behaviour and relationship commitment (.677) is
highly significant. Similarly, the relationship between trust and commitment
(.619) is highly significant amongst prepaid subscribers of Hutch.
127
Tata Indicom Prepaid Subscribers

Shared Value 1 .895(**) .874(**) .808(**) .848(**)
Communication 1 .900(**) .884(**) .862(**)
Opportunistic
1 .873(**) .866(**)
Behaviour
Trust 1 .807(**)
Relationship
1
Commitment
** Correlation is significant at 0.01 level (2-tailed).
variables of Tata prepaid subscribers. The above correlation matrix explains
highly significant relationship between shared value and communication (.895),
shared value and opportunistic behaviour (.874), shared value and trust (.808)
and shared value of shared value and relationship commitment (.848). Similarly,
the relation between communication and opportunistic behaviour (.900),
(.862) is highly significant at 99level. The correlation between opportunistic
behaviour and trust (.873), opportunistic behaviour and relationship commitment
(.866) and trust and relationship commitment is highly significant amongst
prepaid subscribers of Tata Indicom.
128
Reliance Postpaid Subscribers

Shared Value 1 .822(**) .765(**) .803(**) .747(**)
Communication 1 .806(**) .911(**) .809(**)
Opportunistic
1 .767(**) .607(**)
Behaviour
Trust 1 .830(**)
Relationship
1
Commitment
** Correlation is significant at 0.01 level (2-tailed).
variables of Reliance postpaid subscribers. As can be checked from the table,
Pearson’s correlation is highly significant amongst postpaid subscribers of
Reliance between shared value and communication (.822), shared value and
opportunistic behaviour (.765), shared value and trust (.803) and shared value
and relationship commitment (.747). Similarly, the relation between
communication and opportunistic behaviour (.806), communication and trust
(.911) and communication and relationship commitment (.809) is highly
significant at 99level. The correlation between opportunistic behaviour and trust
(.767), opportunistic behaviour and relationship commitment (.607) and trust and
relationship commitment (.830) is highly significant amongst postpaid
subscribers of Reliance.
129
Airtel Postpaid Subscribers

Shared Value 1 .643(**) .341(**) .593(**) .508(**)
Communication 1 .426(**) .668(**) .519(**)
Opportunistic
1 .648(**) .462(**)
Behaviour
Trust 1 .638(**)
Relationship
1
Commitment
** Correlation is significant at 0.01 level (2-tailed)
variables of Airtel postpaid subscribers. As can be checked from the table,
Pearson’s correlation is highly significant amongst postpaid subscribers of Airtel
between shared value and communication (.643), shared value and opportunistic
behaviour (.341), shared value and trust (.593) and shared value and
relationship commitment (.508). Similarly, the relation between communication
and opportunistic behaviour (.426), communication and trust (.668) and
communication and relationship commitment (.519) is highly significant. The
correlation between opportunistic behaviour and trust (.648), opportunistic
behaviour and relationship commitment (.462)) and trust and relationship
commitment (.638) is highly significant amongst postpaid subscribers of Airtel.
130
Hutch Postpaid Subscribers

Shared Value 1 .514(**) .548(**) .435(**) .285(*)
Communication 1 .777(**) .636(**) .590(**)
Opportunistic
1 .587(**) .560(**)
behaviour
Trust 1 .534(**)
Relationship
1
commitment
** Correlation is significant at the 0.01 level (2-tailed)

variables of Hutch postpaid subscribers. As can be seen from the table,
Pearson’s correlation is highly significant amongst postpaid subscribers of Hutch
between shared value and communication (.514), shared value and opportunistic
behaviour (.548), and shared value and trust (.435) But the relationship between
shared value and relationship commitment (.285) is significant at .05 level.
Similarly, the relation between communication and opportunistic behaviour
(.777), communication and trust (.636) and communication and relationship
commitment (.590) is highly significant at 99% level. The correlation between
opportunistic behaviour and trust (.587), opportunistic behaviour and relationship
commitment (.560)) and trust and relationship commitment (.534) is highly
significant amongst postpaid subscribers of Hutch.
131
Tata Indicom Postpaid Subscribers

value behaviour commitment
Shared value 1 .807(**) .853(**) .861(**) .784(**)
Communication 1 .901(**) .934(**) .868(**)
Opportunistic
1 .896(**) .879(**)
behaviour
Trust 1 .796(**)
Relationship
1
commitment
** Correlation is significant at the 0.01 level (2-tailed)
variables of Tata Indicom postpaid subscribers. As can be seen from the table,
Pearson’s correlation is highly significant amongst postpaid subscribers of Tata
Indicom between shared value and communication (.807), shared value and
opportunistic behaviour (.853), and shared value and trust (.861) and shared
value and relationship commitment (.784) is significant at .01 level. Similarly, the
relation between communication and opportunistic behaviour (.901),
(.868) is highly significant at 99% level. The correlation between opportunistic
behaviour and trust (.896), opportunistic behaviour and relationship commitment
(.879)) and trust and relationship commitment (.796) is highly significant amongst
postpaid subscribers of Tata Indicom.
132
5.4 THE EMPIRICAL TEST
5.4.1 Reliability Analysis - Scale (Alpha) for Key Mediating Variable -

Shared Value
RELIABILITY COEFFICIENTS
N of Cases = 367.0 N of Items = 3

Cronbach α (alpha) has an important use of a psychometric instrument to

measure reliability. The data for analysis is reliable one as its value is >0.6.So,
various statistical tools can be applied and tested.
5.4.1.1 Results for Shared Value between Service Provider and Prepaid
In order to test the difference between Telecom Service Provider (TSP),

prepaid/postpaid subscribers and their interaction following hypotheses are
specified:
Ho1: There is no significant difference for shared value between all the
four TSP’s.
HoA: There is significant difference for shared value between all the four
TSP’s.
Ho2: There is no significant difference for shared value between prepaid

and postpaid subscribers.
HoA: There is significant difference for shared value between prepaid

Ho3: There is no interaction for shared value between TSP and prepaid
HoA: There is interaction for shared value between TSP and prepaid and
postpaid subscribers.
These hypotheses can be tested using two-way ANOVA and the results
are presented in Table 5.9.
133
Table 5.9: Two way ANOVA for Service Provider and Prepaid and Postpaid
Subscribers
Source Type III Sum of Squares df Mean Square F-value p-value

Corrected Model 15.636 7 2.234 3.674 0.001
Intercept 2733.799 1 2733.799 4496.536 0.001
TSP 2.171 3 0.724 1.19 0.313
Pr/Po 12.028 1 12.028 19.783 0.001
TSP * Pr/Po 2.522 3 0.841 1.383 0.248
Error 231.64 381 0.608
Total 3579.218 389
Corrected Total 247.276 388
TSP: Telecom Service Providers; Pr/Po: Prepaid and Postpaid
The table 5.9 explains ANOVA results for shared value between Prepaid
and Postpaid subscribers (Pr/Po) for selected Telecom Service Providers (TSP).
It is observed that the variation in the shared value is significant in the prepaid
and postpaid services.
Shared Value and its Dimensions of Prepaid and Postpaid Subscribers

has been further analysed by Using t-test below.
Table 5.10: Comparison of Shared Value and its Dimensions for Reliance
Subscribers
Variables Prepaid/postpaid Mean Std. Deviation t -value p -value

Prepaid 2.4617 0.9969
Shared Value 3.15 0.003**
Postpaid 3.1093 0.605
Prepaid 2.5417 1.1413
Privacy 1.58 0.124
Postpaid 2.9455 0.7798
Prepaid 2.44 1.193
Security 2.637 0.012*
Postpaid 3.1311 0.8461
Prepaid 3.5556 0.8864
Ethics 3.891 .001**
Postpaid 2.8433 0.5434
* Significant at .05 level
** Significant at .01 level
134
It is evident from table 5.10, that there is significant difference between
prepaid and postpaid subscribers for shared value, security and ethics of
Reliance. However, these differences for privacy were found to be non-
significant. In case of shared value and ethics the results are highly significant as
compared to security. Shared value and security are more important for the
postpaid subscribers as compared to prepaid subscribers but as for as ethics is
concerned prepaid subscribers are better than postpaid subscribers.
Table 5.11: Comparison of Shared Value and its Dimensions for Airtel
Subscribers
Variables Prepaid/postpaid Mean Std. Deviation t -value p –value
Prepaid 2.7333 0.6859
Shared Value 1.821 0.072
Postpaid 3.0169 0.7066
Prepaid 2.7241 0.8408
Privacy 0.974 0.333
Postpaid 2.9538 1.1379
Prepaid 2.9655 1.0851
Security 0.362 0.718
Postpaid 3.0476 0.9743
Prepaid 3.4897 0.4916
Ethics 3.437 0.001**
Postpaid 3 0.6946
prepaid and postpaid for ethics of Airtel. However, these differences for shared
value, privacy and security were found to be non-significant. In case of ethics are
more important for prepaid (3.48) subscribers as compared to the postpaid (3)
one.
Table 5.12: Comparison of Shared Value and its Dimensions for Hutch
Subscribers
Variables A2.2 Mean Std. Deviation t p-value
Shared Value Prepaid 2.8922 0.689
1.411 0.161
Postpaid 3.0647 0.5059
Privacy Prepaid 2.9355 0.9978
1.625 0.107
Postpaid 3.2206 0.7091
Security Prepaid 2.871 1.0565
0.42 0.675
Postpaid 2.9559 0.8713
Ethics Prepaid 3.1359 0.7686
1.02 0.313
Postpaid 2.9824 0.5361
135
It is evident from table 5.12, that there is not significant difference
between prepaid and postpaid for shared value, privacy, security and ethics of
Hutch.
Table 5.13: Comparison of Shared Value and its Dimensions for Tata
Indicom Subscribers

1.907 0.059
Postpaid 2.9915 1.0268
1.619 0.109
Postpaid 3.0968 1.1694
2.144 0.035*
Postpaid 2.8387 1.2307
Ethics Prepaid 3.2333 1.0855
1.27 0.207
Postpaid 2.9619 0.9863

prepaid and postpaid subscribers for security of Tata Indicom. However, these
differences for shared value, privacy and ethics were found to be non-significant.
Security is more important for the postpaid(2.83) subscribers as compared to
prepaid(2.27) subscribers.
5.4.1.2 Results of Prepaid and Postpaid Subscribers and City-Wise

Results for Shared Value
In order to test the difference between selected cities and

prepaid/postpaid subscribers and their interaction following hypotheses are
specified:
four cities.
cities.

136
Ho3: There is no interaction for shared value between city and prepaid
HoA: There is interaction for shared value between city and prepaid and
Table 5.14: Two Way ANOVA for Selected Cities and Prepaid and Postpaid
Subscribers
Corrected Model 36.780 7 5.254 9.51 0.001
Intercept 2753.05 1 2753.05 4983.057 0.001
City 17.313 3 5.771 10.445 0.001
Pr/Po 9.977 1 9.977 18.058 0.001
City*Pr/Po 7.12 3 2.373 4.296 0.005
Error 210.496 381 0.552
Total 3579.218 389
Pr/Po: Prepaid and Postpaid
Table 5.14 exhibits ANOVA results for shared value between Prepaid and
postpaid subscribers for selected cities. It is observed that the variation in the
shared value is significant in the prepaid and postpaid services as well as in the
selected cities. The interaction between selected city and prepaid and postpaid
subscribers is also significant. Further, a Post-Hoc Scheffe’s multiple
comparisons was carried out.
137
Table 5.15: Multiple Comparisons (Selected Cities)
95% Confidence
Mean Difference Std. p- Interval
(I-J) Error value Lower Upper
(I) City (J) City
Bound Bound
Amritsar .4809(*) 0.1062 0.001 0.1827 0.7791
Ludhiana Patiala .5457(*) 0.1068 0.001 .0.2459 0.8455
Chandigarh .5023(*) 0.1059 0.001 0.2049 0.7997
Above table 5.15 explain the results of a post-hoc test for multiple
comparisons among selected cities. After applying the test, it was observed that
there are significant differences between Ludhiana and other cities. But
differences are not significant amongst other cities. One of the reason could be
that Ludhiana is an industrial town and business community is very specific for
selecting the particular service provider.
Shared value of Prepaid and Postpaid subscribers has been further

analysed by using t-test below:
Table 5.16: Comparison of Prepaid and Postpaid Subscribers for Shared

Value and its Dimensions in Ludhiana City
Std.
Variables Prepaid/postpaid Mean t -value p -value
Deviation
Shared Prepaid 3.1679 1.0147 1.045 0.299
Value Postpaid 3.3583 0.7166
Prepaid 3.1852 1.0755 1.222 0.225
Privacy
Postpaid 3.4366 0.8406
Prepaid 3.1852 1.0755 0.575 0.566
Security
Postpaid 3.3056 0.8663
Prepaid 2.8667 1.0827 1.109 0.27
Ethics
Postpaid 2.6639 0.6837
It is evident from table 5.16, that there is no significant difference between

prepaid and postpaid subscribers for shared value, privacy, security and ethics in
Ludhiana city.
138
Value and its Dimensions in Amritsar City

4.428 0.001**
Postpaid 3.0698 0.5571
1.87 0.068
Postpaid 3.0333 1.0079
3.885 0.001**
Postpaid 2.9846 0.9269
Prepaid 3.7097 0.8822 5.5 0.001**
Ethics
Postpaid 2.8492 0.6288

prepaid and postpaid subscribers for shared value, security and ethics of
Amritsar city. However, these differences for privacy were found to be non-
significant. In case of shared value, security and ethics the results are highly
significant. Shared value and security are more important for the postpaid
subscribers as compared to prepaid subscribers but as for as ethics is

Value and its Dimensions in Chandigarh City
Std.
Variables Prepaid/postpaid Mean t -value P –value
Deviation
Prepaid 2.5205 0.793
Shared Value 2.755 0.007**
Postpaid 2.9616 0.7408
Prepaid 2.3333 0.9242
Privacy 3.067 0.003**
Postpaid 3 1.0269
Prepaid 2.6061 1.2976
Security 0.599 0.551
Postpaid 2.7593 1.0628
Prepaid 3.3814 0.6998
Ethics 2.684 0.009**
Postpaid 3.0103 0.6305
139
prepaid and postpaid subscribers for shared value, privacy and ethics of
Chandigarh city. However, these differences security were found to be non-
significant. In case of shared value, privacy and ethics the results are highly
significant. Shared value and privacy are more important for the postpaid
5.4.1.3 Results of Shared Value and its Dimensions for City-Wise and
Telecom Service Operator-Wise
In order to test the difference between selected cities and selected

telecom service providers and their interaction, following hypotheses are
specified:
four cities.
cities.
Ho2: There is no significant difference for shared value between telecom

service providers.
HoA: There is significant difference for shared value between telecom

service providers.
Ho3: There is no interaction for shared value between city and telecom
service providers.
HoA: There is interaction for shared value between city and telecom
service providers.
140
Table 5.19: Two Way ANOVA for Selected Cities and Telecom Service
Providers

Corrected Model 82.641 15 5.509 12.482 0.001
Intercept 3322.893 1 3322.893 7528.377 0.001
City 19.958 3 6.653 15.072 0.001
TSP 1.193 3 0.398 0.901 0.441
City*TSP 61.934 9 6.882 15.591 0.001
Error 164.636 373 0.441
Total 3579.218 389
TSP: Telecom Service Provider
The table 5.19 explains ANOVA results for shared value for selected
telecom service provider and for selected cities. It is observed that the variation
in the shared value is significant in the selected cities and the interaction
between different telecom service providers and selected cities is also
significant.

Mean 95% Confidence Interval
Difference Std. Error p-value
(I) City (J) City (I-J) Lower Bound Upper Bound
Amritsar .4809(*) .0949 0.05 0.2143 0.7474
Ludhiana Patiala .5457(*) .0954 0.05 0.2777 0.8137
Chandigarh .5023(*) .0947 0.05 0.2365 0.7682
Table 5.20 purses the results of a post-hoc test for multiple comparisons
among selected cities. It was carried out using Scheffe’s multiple comparisons.
After applying the test, it was observed that there are significant differences
between Ludhiana and other cities. But differences are not significant amongst
other cities.
To study the relationship amongst cities and telecom service providers

further, one –way ANOVA is applied and discussed.
141
Table 5.21: One-Way ANOVA - Ludhiana and Telecom Service Provider
Sum of Mean
Source Of Variation df F-value p-value
Squares Square
Between
Groups 28.728 3 9.576 25.838 0.01
Shared
value Within Groups
35.209 95 0.371
Total 63.937 98
Table 5.21 exhibits that there are significant differences between Reliance,
Airtel, Hutch and Tata Indicom for Ludhiana city. Scheffe’s Post-Hoc test was
carried for multiple comparisons in order to see the significant differences
between the combination of the groups.
Table 5.22: Multiple Comparison for Shared Value between

95% Confidence
Mean Interval
Std. p-
Difference
Dependent Error value Lower Upper
(I) TSP (J) TSP (I-J)
Variable Bound Bound
Reliance 1.2554(*) 0.174 0.001 0.7603 1.7506
Tata
Airtel 1.3301(*) 0.174 0.001 0.8349 1.8253
Indicom
Hutch 1.1621(*) 0.174 0.001 0.6669 1.6573
Table 5.22 depicts results of Post-Hoc Test. It was carried out to test the
significant differences for shared value amongst telecom service providers for
Ludhiana city. Differences are significant between Reliance and Tata Indicom,
Airtel and Tata Indicom, Hutch and Tata Indicom and Tata Indicom with other
operators. All other combinations of differences were found to be non-significant.
Table 5.23: One-Way ANOVA - Amritsar and Telecom Service Providers

Sum of Mean
Source Of Variation Df F-value P-value
Squares Square
Between Groups 10.058 3 3.353 6.809 0.001
Shared
Within Groups 45.79 93 0.492
Value
Total 55.849 96
142
Table 5.23 exhibits that there are significant differences between
Reliance, Airtel, Hutch and Tata Indicom for Amritsar city. Scheffe’s Post-Hoc
test was carried for multiple comparisons in order to see the significant
differences between the combination of the groups.

95% Confidence
Mean
Std. p- Interval
Difference
Shared Tata
Reliance -.8697(*) 0.1985 0.001 -1.4348 -0.3046
Value Indicom
Table 5.24 exhibits results of One-way ANOVA. It was carried out to test
the significant differences for shared value amongst telecom service providers
for Amritsar city. Differences are significant between Reliance and Tata Indicom.
All other combinations of differences were found to be non-significant.
Table 5.25: One-Way ANOVA – Patiala and Telecom Service Providers

Sum of Mean
Source Of Variation Df F-value p-value
Squares Square
Between Groups 18.414 3 6.138 18.657 0.01
Shared
Value
Total 48.351 94

Reliance, Airtel, Hutch and Tata Indicom for Patiala city. Scheffe’s Post-Hoc test
was carried for multiple comparisons in order to see the significant differences
between the combination of the groups.
Table 5.26: Multiple Comparisons for Shared Value between

95% Confidence
Mean
Std. p- Interval
Difference
Reliance -.9765(*) 0.1698 0.001 -1.4601 -0.4929
Shared Tata
Airtel -.9539(*) 0.1639 0.001 -1.4208 -0.487
Value Indicom
Hutch -1.0533(*) 0.1622 0.001 -1.5155 -0.5912
143
Table 5.26 depicts results of Post-Hoc test. It was carried out to test the
significant differences for shared value amongst telecom service providers for
Patiala city. Differences are significant between Reliance and Tata Indicom,
Airtel and Tata Indicom, Hutch and Tata Indicom and Tata Indicom with other
Table 5.27: One-Way ANOVA – Chandigarh and Telecom Service Providers

Sum of Mean
Source Of Variation df F-value p-value
Squares Square
Between Groups 6.083 3 2.028 3.55 0.017
Shared
Value
Total 59.782 97

Reliance, Airtel, Hutch and Tata Indicom for Chandigarh city. Scheffe’s Post-Hoc
test was carried for multiple comparisons in order to see the significant

95% Confidence
Mean Interval
Std. p-
Difference
Dependent (J) Error value Lower Upper
(I) TSP (I-J)
Variable TSP Bound Bound
Shared
Reliance Airtel -.6800(*) 0.2184 0.026 -1.3017 -.05840
Value
Table 5.28 exhibits results of One-way ANOVA. It was carried out to test
the significant differences for shared value amongst telecom service providers
for Chandigarh city. Differences are significant between Reliance and Airtel. All
other combinations of differences were found to be non-significant.
5.4.1.4 Results of Telecom Service Provider-Wise, City-Wise and Service-

Wise Results of Shared Value
In order to test the difference between prepaid and postpaid subscribers

and selected telecom service providers and their interaction, following
hypotheses are specified:
144
four cities.
cities.
Ho2: There is no significant difference for shared value between telecom

service providers.
HoA: There is significant difference for shared value between telecom

service providers.


Ho4: There is no interaction for shared value between city and telecom
service providers.
HoA: There is interaction for shared value between city and telecom
service providers.
Ho5: There is no interaction for shared value between city and prepaid
HoA: There is interaction for shared value between city and prepaid and
Ho6: There is no interaction for shared value between TSP and prepaid
HoA: There is interaction for shared value between TSP and prepaid and
Ho7: There is no interaction for shared value among TSP, prepaid and
postpaid subscribers and city.
HoA: There is interaction for shared value among TSP, prepaid and
145
Table 5.29: Multiple Factor ANOVA for Prepaid and Postpaid Subscribers,
Selected Telecom Provider and Selected Cities
Source Type III Sum of Squares df Mean Square F Sig.

Corrected Model 106.240(a) 31 3.427 8.675 0.001
Intercept 2724.971 1 2724.971 6897.607 0.001
City 15.423 3 5.141 13.013 0.001
TSP 1.709 3 0.57 1.442 0.23
Pr/Po 9.161 1 9.161 23.188 0.001
City*TSP 55.467 9 6.163 15.6 0.001
City*Pr/Po 5.773 3 1.924 4.871 0.002
TSP*Pr/Po 1.888 3 0.629 1.593 0.191
TSP*Pr/Po*City 6.068 9 0.674 1.707 0.086
Error 141.037 357 0.395
Total 3579.218 389
Table 5.29 explains the ANOVA results for shared value for prepaid and
postpaid services of selected telecom service providers and for selected cities. It
is observed that the variation in the shared value is significant in the selected
cities and the interaction between different telecom service providers and
selected cities.
To study the relationship amongst telecom service provider, city and

prepaid and postpaid services, t-test is further applied and discussed.
Table 5.30: Comparison of Shared Value its Dimensions for Amritsar Hutch
Prepaid/ Std. Std. Error

Variable Mean t-value p-value
Postpaid Deviation Mean
Shared Prepaid 2.4917 .56 .198

2.901 0.008**
Value Postpaid 3.1451 .5095 .1236
146
Table 5.31: Comparison of Shared Value its Dimensions for Amritsar
Tata Indicom

Shared Prepaid 1.7407 0.8784 0.2928

3.28** 0.009
Value Postpaid 2.75 0.3783 9.46E-02
Tables 5.30 and 5.31 indicate t-test results for prepaid and postpaid
subscribers among all telecom operators and selected cities. There are
significant differences between prepaid and postpaid subscribers of Ludhiana
Reliance, Ludhiana Airtel, Ludhiana Hutch, Amritsar Tata Indicom and Patiala
Reliance. However, the differences between other combinations are found to be
non-significant.
5.4.3 Reliability Analysis - Scale (Alpha) for Key Mediating Variable

Communication
The reliability coefficient indicates that the scale for measuring the key
mediating variable communication is a reliable one as its value is >0.6.
5.4.3.1 Results for Communication between Service Provider and Prepaid
In order to test the difference for communication between Telecom

Service Provider (TSP), prepaid/postpaid subscribers and their interaction
following hypotheses are specified:
Ho1: There is no significant difference for communication between all

the four TSP’s.
HoA: There is significant difference for communication between all the

four TSP’s.
147
Ho2: There is no significant difference for communication between
prepaid and postpaid subscribers.
HoA: There is significant difference for communication between prepaid

Ho3: There is no interaction for communication between TSP and

HoA: There is interaction for communication between TSP and prepaid

Table 5.32: Two-Way for ANOVA Service Provider and Prepaid and
Type III Sum of Mean

Source df F-value p-value
Squares Square
Corrected Model 9.785 7 1.398 4.513 0.001
Intercept 2863.117 1 2863.117 9243.75 0.001
TSP 1.334 3 0.445 1.435 0.232
Pr/Po 8.104 1 8.104 26.163 0.001
TSP* PR/Po 0.595 3 0.198 0.64 0.59
Error 118.319 382 0.31
Total 3568.052 390
Above table 5.32 explains results of ANOVA for communication are

presented in the above table prepaid and postpaid subscribers for selected
telecom service providers. It is observed that the variation in the communication
is significant in the prepaid and postpaid subscribers.
Communication of Prepaid and Postpaid subscribers has been further

analysed by using t-test below.
148
Table 5.33: Comparison of Communication and its Dimensions for Reliance
Prepaid/pos
Variables Mean Std. Deviation t-value p-value
tpaid
Prepaid 2.7352 0.6911
Communication 2.518 0.016*
Postpaid 3.101 0.479
Prepaid 2.5359 0.8485
Openness 3.034 0.004**
Postpaid 3.0931 0.6367
Prepaid 2.7933 0.601
Speed 2.636 0.01**
Postpaid 3.1192 0.4939
Quality of Prepaid 2.816 0.7158
1.84 0.074
information Postpaid 3.0905 0.4681

prepaid and postpaid subscribers for communication, openness and speed of
response of Reliance. However, these differences for quality of information were
found to be non-significant. In case of openness and speed of response the
results are highly significant as compared to communication. Communication,
openness and speed of response are more important for the postpaid
subscribers as compared to prepaid subscribers.
Table 5.34: Comparison of Communication and its Dimensions of Hutch
Prepaid
Variables Mean Std. Deviation t p-value
/Postpaid
Prepaid 2.9299 0.534

Communication 1.634 0.105
Postpaid 3.0976 0.4507
Prepaid 2.7143 0.663

Openness 1.659 0.1
Postpaid 2.9436 0.636
Prepaid 3.0755 0.6442

Speed of response 0.574 0.567
Postpaid 3.1434 0.5024
Prepaid 3 0.6364
Quality of information 1.9 0.06
Postpaid 3.2059 0.4314
149
prepaid and postpaid subscribers for communication, openness and speed of
response of Hutch.
Table 5.35: Comparison of Communication and its Dimensions for

Tata Indicom
Prepaid
/Postpaid
Prepaid 2.6784 0.7725
Communication 2.591 0.011*
Postpaid 3.0464 0.6213
Prepaid 2.545 0.9846
Openness 2.161 0.033*
Postpaid 2.9764 0.9388
Speed of Prepaid 2.7986 0.7579
1.702 0.095
response Postpaid 3.0357 0.4663

prepaid and postpaid subscribers for communication and openness of Tata
Indicom. However, these differences for speed of response of information were
found to be non-significant. In case of openness and communication the results
are highly significant as compared to communication. In case of communication,
openness and speed of response are more important for the postpaid
5.4.3.2 Results of Prepaid and Postpaid Subscribers and City-Wise

Results for Communication
In order to test the difference between cities, prepaid/postpaid subscribers

and their interaction following hypotheses are specified:

the four cities.

four cities.

150
Ho3: There is no interaction for communication between cities and

HoA: There is interaction for communication between cities and prepaid

Table 5.36: Two way ANOVA Prepaid and Postpaid Subscribers and
Selected Cities
Type III Sum Mean

Source df f-value p-value
of Squares Square
Corrected Model 19.965 7 2.852 10.075 0.001
Intercept 2870.223 1 2870.223 10139.027 0.001

City 7.759 3 2.586 9.136 0.001
Pr/Po 7.207 1 7.207 25.46 0.001
City*Pr/Po 3.644 3 1.215 4.291 0.005
Error 108.139 382 0.283

Total 3568.052 390
In the above table 5.36 the ANOVA results for communication are
presented for selected cities. It is observed that the variation in the
communication is significant in the selected cities and the interaction between
different selected cities and services is also significant.
151
95% Confidence interval

Mean Difference
(I) City (J) City Std. Error p-value Lower Upper
(I-J)
Bound Bound
Amritsar .3293(*) .0760 0.01 0.1159 0.5428
Chandigarh .3234(*) .0758 0.01 0.1105 0.5363
A post-hoc test for multiple comparisons among selected cities was

carried out using Scheffe’s multiple comparisons. After applying the test, it was
observed that there are significant differences for communication between
Ludhiana and other cities. But differences are not significant amongst other
cities.
Communication of Prepaid and Postpaid subscribers among selected

cities has been further analysed by using t-test below.

Ludhiana City
Std.
Variables Prepaid/postpaid Mean t-value p-value
Deviation
Prepaid 3.0813 0.6301
Communication 1.652 0.102
Postpaid 3.2826 0.5032
Prepaid 3.1111 0.8756
Openness 1.495 0.138
Postpaid 3.371 0.7283
Speed of Prepaid 2.9907 0.5696

2.431 0.017*
response Postpaid 3.2639 0.4689

0.619 0.537

prepaid and postpaid subscribers for speed of response of Ludhiana city.
However, these differences for communication, openness and quality of
information were found to be non-significant. In case of speed of response the
152
results are significant. Speed of response is more important for the postpaid

Amritsar City
Pre- Std.
Variables Mean t-value p-value
pad/Postpaid Deviation
Prepaid 2.4822 0.7573
Communication 4.185 0.001**
Postpaid 3.0939 0.4351
Prepaid 2.2309 0.8494 4.863 0.001**
Openness
Postpaid 2.9771 0.6267
Prepaid 2.793 0.9055 1.795 0.076
Speed of response
Postpaid 3.0568 0.5363
5.19 0.001**

prepaid and postpaid subscribers for communication, openness and quality of
information of Amritsar city. However, these differences for speed of response
were found to be non-significant. In case of communication, openness and
quality of information the results are highly significant. Communication,
openness and quality of information are more important for the postpaid

Chandigarh City
Std.
Variables Prepaid/Postpaid Mean t-value p-value
Deviation
Prepaid 2.7034 0.5757
Communication 2.748 0.007**
Postpaid 3.016 0.5189
Prepaid 2.5577 0.6779
Openness 2.331 0.022*
Postpaid 2.8825 0.6516
Prepaid 2.8358 0.691
Speed of response 1.704 0.092
Postpaid 3.0492 0.518
3.048 0.003**
153
prepaid and postpaid subscribers for communication, openness and quality of
information of Chandigarh city. However, these differences for speed of
response were found to be non-significant. In case of communication, openness
and quality of information the results are highly significant. Communication,
openness and quality of information are more important for the postpaid
5.4.3.3 Findings of a Comparison of City-Wise and Telecom Service

Provider-Wise Results of Communication
In order to test the difference between cities and telecom service provider

the four cities.

four cities.
Ho2: There is no significant difference for communication between the

selected for TSP.
HoA: There is significant difference for communication between the

selected for TSP.
Ho3: There is no interaction for communication between cities and TSP.
HoA: There is interaction for communication between cities and TSP.
154
Table 5.41: Two Way ANOVA for Selected Telecom Provider and
Selected Cities
Type III Sum

Source df Mean Square F-value p-value
of Squares
Corrected Model 36.794(a) 15 2.453 10.047 0.001
Intercept 3431.87 1 3431.87 14056.783 0.001

City 9.185 3 3.062 12.54 0.001
TSP 1.049 3 0.35 1.432 0.233
City*TSP 26.68 9 2.964 12.142 0.001
Error 91.31 374 0.244

Total 3568.052 390
TSP: Telecom Service Providers
In the above table 5.41, the ANOVA results for selected telecom service
providers and for selected cities. It is observed that the variation in the
communication is significant in the selected cities and the interaction between
different telecom service providers and selected cities.
Communication of selected cities and selected TSPs has been further

analysed by using a Post-Hoc test below.
95% Confidence Interval

Mean Difference
(I) City (J) City Std. Error p-value
(I-J) Lower Upper
Bound Bound
Amritsar .3293(*) .0706 0.01 0.1311 0.5276
Chandigarh .3234(*) .0704 0.01 0.1257 0.5211
Table 5.42 purses results of a post-hoc test for multiple comparisons

among selected cities .It was carried out using Scheffe’s multiple comparisons.
After applying the test, it was observed that there are significant differences for
communication between Ludhiana and other cities. But differences are not
significant amongst other cities.
155
On the basis of multiple comparisons, communication between selected
TSPs and selected cities has been further analysed by using one-way ANOVA
as below:
Table 5.43: One-Way ANOVA for Ludhiana and Selected

Telecom Service Providers
Sum of Mean F- p-
Source Of Information df
Squares Square value value
Between
11.288 3 3.763 20.074 0.001
Groups
Communication Within
17.807 95 0.187
Groups
Total 29.095 98
Reliance, Airtel, Hutch and Tata Indicom for communication in Ludhiana city.
Scheffe’s Post-Hoc test was carried for multiple comparisons in order to see the
significant differences between the combination of the groups.
Table 5.44: Multiple Comparisons for Communication between

95%
Confidence
Mean
Std. p- Interval
Difference
Error value
Dependent (I-J) Lower Upper
(I) TSP (J) TSP
Reliance .7771(*) 0.1237 0.01 0.4249 1.1292
Tata
Communication Airtel .8434(*) 0.1237 0.01 0.4913 1.1956
Indicom
Hutch .7247(*) 0.1237 0.01 0.3726 1.0769
Above table 5.44 explains the results of a Post-Hoc test. It was carried out
to test the significant differences for communication amongst telecom service
providers for Amritsar city. Differences are significant between Reliance and
Tata Indicom, Airtel and Tata Indicom, Hutch and Tata Indicom and Tata Indicom
with other operators. All other combinations of differences were found to be non-
significant.
156
Table 5.45: One-way ANOVA for Amritsar and Selected Telecom Operators
Sum of Mean F- p-
Source Of Variation df
Between
Groups 4.045 3 1.348 3.759 0.013
Groups 33.355 93 0.359
Total 37.4 96

Reliance, Airtel, Hutch and Tata Indicom for communication in Amritsar city.

95% Confidence
Mean Interval
Std. p-
Difference
Reliance -.5392(*) 0.1694 0.022 -1.0215 .0569
Tata
Airtel -0.1357 0.1751 0.896 -0.6342 .0036
Indicom
Hutch -0.3145 0.1694 0.334 -0.7968 .0167
Above table 5.46 explains results of a Scheffe’s Post-Hoc test. It was

carried out to test the significant differences for communication amongst telecom
service providers for Amritsar city. Differences are significant between Reliance
and Tata Indicom, Airtel and Tata Indicom, Hutch and Tata Indicom and Tata
Indicom with other operators. All other combinations of differences were found to
be non-significant.
Table 5.47: One-Way ANOVA: Patiala and Selected Telecom Operators

Sum of Mean F- p-
Source of Variation df
Between
9.11 3 3.037 21.001 0.001
Groups
13.303 92 0.145
Groups
Total 22.413 95
157
Reliance, Airtel, Hutch and Tata Indicom for communication in Patiala city.

95%
Confidence
Mean
Std. p- Interval
Difference
Error value
(I) TSP (J) TSP
-
Reliance
-.8005(*) 0.1126 0.01 -1.121 0.4799
Tata - -
Communication Airtel
Indicom -.6046(*) 0.1076 0.01 0.9109 0.2983
-
Hutch
-.6667(*) 0.1076 0.01 -0.973 0.3604
Above table 5.48 explains results of Scheffe’s Post-Hoc test. It was

carried out to test the significant differences for shared value amongst telecom
service providers for Patiala city. Differences are significant between Reliance
and Tata Indicom, Airtel and Tata Indicom, Hutch and Tata Indicom and Tata
Indicom with other operators. All other combinations of differences were found to
be non-significant.
Table 5.49: One Way ANOVA: Chandigarh and Selected Telecom Operators
Sum of Mean F- p-
Source Of Variation df
Between
3.314 3 1.105 3.869 0.012
Groups
26.845 94 0.286
Groups
Total 30.159 97
Reliance, Airtel, Hutch and Tata Indicom for communication in Chandigarh city.
158
95% Confidence
Mean Interval
Std. p-
Difference
Dependent (I) Error value Lower Upper
(J) TSP (I-J)
Communication Hutch Reliance .5065(*) 0.1544 0.017 .06702 0.9461
Above table 5.50 shows results of Post-Hoc test. It was carried out to test
the significant differences for communication amongst telecom service providers
for Chandigarh city. Differences are significant between Reliance and Hutch
5.4.4.4 Results of Telecom Service Provider-Wise, City-Wise and Service-

Wise Results of Communication
In order to test the difference between prepaid and postpaid subscribers

and selected telecom service providers and their interaction for communication,

the four cities.
four cities.
telecom service providers.
HoA: There is significant difference for communication between telecom
service providers.
Ho4: There is no interaction for communication between city and
159
HoA: There is interaction for communication between city and telecom
service providers.
Ho5: There is no interaction for communication between city and prepaid
HoA: There is interaction for communication between city and prepaid
Ho6: There is no interaction for communication between TSP and
HoA: There is interaction for communication between TSP and prepaid
Ho7: There is no interaction for communication among TSP, prepaid and
HoA: There is interaction for communication among TSP, prepaid and
Table 5.51: Multi-factor ANOVA for Selected Telecom Provider, Prepaid and
Postpaid and Selected Cities
Type III Sum of

Squares
Corrected Model 54.306 31 1.752 8.498 0.001
Intercept 2838.492 1 2838.492 13769.854 0.001
City 6.638 3 2.213 10.734 0.001
TSP 1.173 3 0.391 1.897 0.13
Pr/Po 6.523 1 6.523 31.641 0.001
City*TSP 26.186 9 2.91 14.114 0.001
City*Pr/Po 2.98 3 0.993 4.82 0.003
TSP*Pr/Po 0.367 3 0.122 0.593 0.62
City* TSP*Pr/Po 7.168 9 0.796 3.864 0.001
Error 73.797 358 0.206
Total 3568.052 390
Pr/Po: Prepaid and Postpaid; TSP: Telecom Service Providers
160
Above table 5.51 exhibits the ANOVA results for communication. They are
presented for selected telecom service provider and prepaid and postpaid
services in selected cities. It is observed that the variation in the communication
is significant in the selected cities and the interaction between different prepaid
and postpaid subscribers of selected telecom service providers and selected
cities.
To study the relationship amongst telecom service provider, city and

prepaid and postpaid services for communication, t-test is further applied and
discussed.

Reliance Ludhiana
Std. Std. Error p-

Variable Prepaid/Postpaid Mean t-value
Deviation Mean value
Prepaid 2.4451 0.3393 0.1385
Communication 3.442** 0.002
Postpaid 3.2316 0.5218 0.1197
Table 5.53: Comparison of Communication and its Dimensions for Airtel

Ludhiana
Std. Std. Error p-

Variable Prepaid/Postpaid Mean t-value
Deviation Mean value
Prepaid 2.7963 0.1361 0.5980
Postpaid 3.0334 0.5362 0.8260
Table 5.54: Comparison of Communication and its Dimensions for Hutch

Amritsar
Std.
Std.
Variable Prepaid/Postpaid Mean Error t-value p-value
Deviation
Mean
Prepaid 2.4023 .4828 .1707
Postpaid 3.2255 .6285 .1524
161
Table 5.55: Comparison of Communication and its Dimensions for Tata
Indicom Amritsar
Std.
Std.
Variable Prepaid/Postpaid Mean Error t-value p-value
Deviation
Mean
Prepaid 2.0263 .8876 .2959
Postpaid 2.997 .3048 .0762
Table 5.56: Comparison of Communication and its Dimensions for Reliance

Patiala
Std. Std. Error
Variable A2.2 Mean t-value p-value
Deviation Mean
Prepaid 3.3074 .3405 .1287
Communication 2.329** .031
Postpaid 3.0527 .1674 .0447
Table 5.57: Comparison of Communication and its Dimensions for Airtel

Chandigarh
Std. Std. Error

Variable A2.2 Mean t-value p-value
Deviation Mean
Prepaid 2.6448 .3887 .1374
Communication 2.71** .012
Postpaid 3.1506 .4523 .1097
Above table 5.57 indicates t-test results for communication of prepaid

and postpaid subscribers among all telecom operators and selected cities. There
are significant differences between prepaid and postpaid subscribers of
Ludhiana Reliance, Airtel Ludhiana, Hutch Amritsar, Tata Indicom Amritsar,
Patiala Reliance and Airtel Chandigarh. All other combinations are found
insignificant.
5.4.5 Reliability Analysis – Scale (Alpha) for Key Mediating Variable

Opportunistic Behavior
Alpha = .7719
Cronbach α (alpha) is an important psychometric instrument to measure

the reliability. In this research, the data for analysis is reliable one as its value is
>0.6. So, various statistical tools can be applied and tested.
162
5.4.5.1 Results for Opportunistic Behaviour between Telecom Service
Providers and Prepaid and Postpaid Subscribers
In order to test the difference between Telecom Service Provider (TSP),

prepaid/postpaid subscribers and their interaction for opportunistic behaviour,
Ho1: There is no significant difference for opportunistic behaviour

between all the four TSP’s.
HoA: There is significant difference for opportunistic behaviour between

all the four TSP’s.

between prepaid and postpaid subscribers.

Ho3: There is no interaction for opportunistic behaviour between TSP

and prepaid and postpaid subscribers.
HoA: There is interaction for opportunistic behaviour between TSP and

Table 5.58: Two-way ANOVA for Prepaid and postpaid subscribers and
Selected Telecom Provider

Squares Square
Corrected Model 12.738 7 1.82 3.388 0.002
Intercept 2807.116 1 2807.116 5225.968 0.01
TSP 2.442 3 0.814 1.515 0.21
Pr/Po 8.215 1 8.215 15.293 0.001
TSP* Pr/Po 2.889 3 0.963 1.793 0.148
Error 205.19 382 0.537
Total 3588.117 390
163
The above table 5.58 shows ANOVA results for opportunistic behavior.
They are presented in the above table selected telecom service provider and
prepaid and postpaid services. It is observed that the variation in the
opportunistic behaviour significant in the prepaid and postpaid services.
Opportunistic behaviour of Prepaid and Postpaid subscribers has been

further analysed by using t-test below.
Table 5.59: Comparison of Opportunistic Behaviour and its Dimensions

for Reliance
Prepaid/ Std.
Variables
Postpaid Mean Deviation t-value p-value
Opportunistic Prepaid 2.6989 0.8825
2.082 0.044*
behavior Postpaid 3.0871 0.6299
Prepaid 2.94 0.939
Regulatory control 0.572 0.569
Postpaid 3.0603 0.8537
Information Prepaid 2.5644 0.8742
2.841 0.007**
asymmetry Postpaid 3.0796 0.5537

prepaid and postpaid subscribers for opportunistic behaviour and information
asymmetry of Reliance. However, these differences for regulatory control were
found to be non-significant. In case of information asymmetry the results are
highly significant as compared to opportunistic behaviour. Opportunistic
behaviour and information asymmetry are more important for the postpaid
Table 5.60: Comparison of Opportunistic Behaviour and its Dimensions for

Airtel
Prepaid/ Std.
Variables
2.047 0.043*
Prepaid 2.7759 0.7269
Postpaid 2.9769 0.8946
1.95 0.054
164
prepaid and postpaid subscribers for opportunistic behaviour of Airtel. However,
these differences for regulatory control and information asymmetry were found to
be non-significant. Opportunistic behaviour is more important for the postpaid

Hutch
Prepaid/ Std.
Variables
Prepaid 2.9896 0.517
Opportunistic behavior 0.348 0.729
Postpaid 3.0295 0.544
Prepaid 3.0323 0.5764
Postpaid 2.9559 0.6732
Prepaid 2.9271 0.6574
Information asymmetry 1.408 0.162
Postpaid 3.1032 0.5456
It is evident from table 5.61, opportunistic behaviour, regulatory control

and information asymmetry are non-significant for prepaid and postpaid
subscribers of Hutch.
Tata Indicom
Prepaid/ Std.
Variables
2.626 0.01**
Prepaid 2.3333 1.1402
Regulatory control 2.557 0.012*
Postpaid 2.9516 1.1619
Information Prepaid 2.6875
2.491 0.014*

prepaid and postpaid subscribers for opportunistic behaviour, regulatory control
and information asymmetry of Tata Indicom. In case of opportunistic behaviour
the results are highly significant as compared to opportunistic behaviour and
information asymmetry. Opportunistic behaviour, regulatory control and
165
information asymmetry are more important for the postpaid subscribers as
compared to prepaid subscribers.
5.4.5.2 Results for Opportunistic Behaviour between Selected Cities and

Prepaid and Postpaid Subscribers


between all the four cities.

all the four cities.


Ho3: There is no interaction for opportunistic behaviour between cities

HoA: There is interaction for opportunistic behaviour between cities and

are presented in table 5.63.
Table 5.63: Two Way ANOVA for Prepaid and Postpaid Subscribers and
Selected Cities
Type III Sum

Source df Mean Square F p-value
of Squares
Corrected Model 31.107 7 4.444 9.087 0.001
Intercept 2811.012 1 2811.012 5747.781 0.001
City 15.641 3 5.214 10.66 0.001
Pr/Po 7.033 1 7.033 14.38 0.001
City* Pr/Po 3.508 3 1.169 2.391 0.068
Error 186.821 382 0.489
Total 3588.117 390
166
The table 5.63 depicts ANOVA results for opportunistic behavior for
selected cities and prepaid and postpaid services. It is observed that the
variation in the opportunistic behaviour is significant in the prepaid and postpaid
services.

further analysed by using a Post-Hoc test. The results of which are given below.

95% Confidence Interval
(I) City (J) City Mean Difference (I-J)Std. Errorp-value
Lower Bound Upper Bound
Amritsar .3228(*) 0.0836 0.002 0.0879 0.5577
Ludhiana Patiala .6094(*) 0.1000 0.001 0.3281 0.8449
Chandigarh .4870(*) 0.0997 0.001 0.2072 0.7213
Ludhiana -.3228(*) 0.0999 0.016 -0.6033 0-.0879
Amritsar
Patiala .2866(*) 0.1007 0.045 0.0038 0.5233
Ludhiana -.6094(*) 0.1002 0.001 -0.8906 -0.3738
Patiala
Amritsar -.2866(*) 0.1007 0.045 -0.5693 -0.499
Chandigarh Ludhiana -.4870(*) 0.0997 0.001 -0.7668 -0.2527
The above table 5.64 explains a post-hoc test for multiple comparisons
among selected cities by using Scheffe’s multiple comparisons. After applying
the test, it was observed that there are significant differences a)between
Ludhiana and other cities (b) Amritsar and Ludhiana (c) Patiala and Amritsar and
(d) Chandigarh and Ludhiana. But differences are not significant amongst other
cities.

further analysed by using t-test. The results of which are given below.

Amritsar City
Prepaid/ Std.
Variables
4.061 0.001**
behaviour Postpaid 3.165 0.6335
Prepaid 2.5645 0.9725
Regulatory control 2.878 0.005**
Postpaid 3.1371 0.8692
3.956 0.001**
167
prepaid and postpaid subscribers for opportunistic behaviour, regulatory control
and information asymmetry of Amritsar city. Opportunistic behaviour, regulatory
control and information asymmetry are more important for the postpaid

Chandigarh City
Prepaid/ Std.
Variables
2.123 0.036*
behaviour Postpaid 2.9103 0.6259
Prepaid 2.4545 0.8136
Postpaid 2.7589 0.7977
1.65 0.102

prepaid and postpaid subscribers for opportunistic behaviour in Chandigarh city.
However, these differences for regulatory control and information asymmetry
were found to be non-significant. Opportunistic behaviour is more important for
the postpaid subscribers as compared to prepaid subscribers but as for as ethics
is concerned prepaid subscribers are better than postpaid subscribers.

Telecom Service Providers (TSP)
In order to test the difference between cities, TSPs and their interaction


168
between TSPs.

TSPs.
Ho3: There is no interaction for opportunistic behaviour between cities

and TSPs.
HoA: There is interaction for opportunistic behaviour between cities and

TSPs.
Table 5.67: Two-way ANOVA for Telecom Service Providers and

Selected Cities
Type III Sum of

Squares
Corrected Model 78.950 15 5.263 14.164 0.001
Intercept 3371.841 1 3371.841 9073.82 0.001
City 20.246 3 6.749 18.161 0.001
TSP 1.304 3 0.435 1.169 0.321
City* TSP 57.058 9 6.34 17.061 0.001
Error 138.979 374 0.372
Total 3588.117 390
The ANOVA results for opportunistic behaviour presented in the above

table selected cities and selected telecom service providers. It is observed that
the variation in the opportunistic behaviour is significant in the selected cities and
the interaction between selected telecom service providers and selected cities.
On the basis of multiple comparisons, further one-way ANOVA was

carried out. The results of which are given below:
169
Table 5.68: One-way ANOVA for Opportunistic Behaviour Ludhiana and
Selected Telecom Operators
Sum of Mean F- p-
Between Groups 29.816 3 9.939 27.402 0.01
Opportunistic
Behaviour
Total 64.272 98

Reliance, Airtel, Hutch and Tata Indicom for opportunistic behaviour in Ludhiana
city. Scheffe’s Post-Hoc test was carried for multiple comparisons in order to see
the significant differences between the combination of the groups.
Table 5.69: Multiple Comparison for Opportunistic Behaviour between

95%
Confidence
Mean
Std. p- Interval
Difference
Error value
(I) TSP (J) TSP
Reliance 1.3353(*) 0.1721 0.05 0.8455 1.8252
Opportunistic Tata
Airtel 1.2978(*) 0.1721 0.05 0.808 1.7877
Behaviour Indicom
Hutch 1.1903(*) 0.1721 0.05 0.7005 1.6802
* Significant at .05 level; TSP: Telecom Service Providers
Table 5.69 explains Scheffe’s Post-Hoc results. It was carried out to test
the significant differences for opportunistic behaviour amongst telecom service
providers for Ludhiana city. Differences are significant between Reliance and
Tata Indicom, Airtel and Tata Indicom, Hutch and Tata Indicom. All other
combinations of differences were found to be non-significant.
Table 5.70: One-way ANOVA for Amritsar and Selected Telecom Operators
Sum of Mean F- p-
Between Groups 5.317 3 1.772 3.431 0.02
Opportunistic
Behaviour
Total 53.355 96
170
Reliance, Airtel, Hutch and Tata Indicom for opportunistic behaviour in Amritsar

95% Confidence
Mean Interval
Std. P-
Difference
Tata
Reliance
Indicom -.6083(*) 0.2033 0.035 -1.1872 -.02952
providers for Amritsar city. Differences are significant between Reliance and
Tata Indicom. All other combinations of differences were found to be non-
significant.
Table 5.72: One Way ANOVA for Patiala and Selected Telecom Operators
Sum of Mean F- p-
Between Groups 17.933 3 5.978 29.678 0.001
Opportunistic
Behaviour
Total 36.463 95

Reliance, Airtel, Hutch and Tata Indicom for opportunistic behaviour in Patiala
171
95%
Confidence
Mean Interval
Std. P-
Difference
Error value
(I) TSP (J) TSP
Airtel .6143(*) 0.1328 0.001 0.236 0.9926

Reliance Tata
Indicom 1.1643(*) 0.1328 0.001 0.786 1.5426
-
Reliance
-.6143(*) 0.1328 0.001 0.9926 -0.236
Tata
Airtel
Opportunistic Indicom .5500(*) 0.1269 0.001 0.1885 0.9115
Behaviour Tata
Indicom .9025(*) 0.1269 0.001 0.541 1.264
-
Reliance
-1.1643(*) 0.1328 0.001 1.5426 -0.786
Tata
- -
Indicom Airtel
-.5500(*) 0.1269 0.001 0.9115 0.1885
Hutch -.9025(*) 0.1269 0.001 -1.264 -0.541
providers for Patiala city. Differences are significant between Reliance, Airtel and
Tata Indicom, Hutch and Tata Indicom and Tata Indicom with other operators. All
Table 5.74: One-way ANOVA for Chandigarh and Selected Telecom

Operators
Sum of Mean F- p-
Between Groups 5.391 3 1.797 4.45 0.006
Opportunistic
Behaviour
Total 43.345 97
Reliance, Airtel, Hutch and Tata Indicom for opportunistic behaviour in
Chandigarh city. Scheffe’s Post-Hoc test was carried for multiple comparisons in
order to see the significant differences between the combination of the groups.
172
95%
Mean Confidence
Std. P- Interval
Difference
Error value
Dependent (I) (I-J) Lower Upper
(J) TSP
Reliance .5242(*) 0.1836 0.049 0.0015 1.0468
Opportunistic
Airtel Tata
Behaviour
Indicom .5325(*) 0.1797 0.038 0.0202 1.0441
providers for Chandigarh city. Differences are significant between Reliance and
Airtel and Airtel and Tata Indicom. All other combinations of differences were
found to be non-significant.
5.4.5.4 Results for Opportunistic Behaviour between Prepaid and Postpaid

Subscribers, Selected Cities and Telecom Service Providers (TSP)
a) In order to test the difference between prepaid and postpaid subscribers,

selected city and selected telecom service providers (TSPs) and their
interaction, following hypotheses are specified:
between telecom service providers.
173
Ho4: There is no interaction for opportunistic behaviour between city and
HoA: There is interaction for opportunistic behaviour between city and
Ho5: There is no interaction for opportunistic behaviour between city and
HoA: There is interaction for opportunistic behaviour between city and
Ho6: There is no interaction for opportunistic behaviour between TSP
HoA: There is interaction for opportunistic behaviour between TSP and
Ho7: There is no interaction for opportunistic behaviour among TSP,
prepaid and postpaid subscribers and city.
HoA: There is interaction for opportunistic behaviour among TSP,
prepaid and postpaid subscribers and city.
Table 5.76: Multiple Factor ANOVA for Telecom Service Providers, Selected
Cities and Prepaid and Postpaid Services

Source df F Sig.
Squares Square
Corrected Model 95.262 31 3.073 8.968 0.01
Intercept 2793.179 1 2793.179 8151.865 0.001
City 13.674 3 4.558 13.302 0.001
TSP 1.893 3 0.631 1.842 0.139
Pr/Po 6.386 1 6.386 18.637 0.001
City* TSP 50.39 9 5.599 16.34 0.001
City* Pr/Po 2.722 3 0.907 2.648 0.049
TSP* Pr/Po 1.764 3 0.588 1.716 0.163
City* TSP* Pr/Po 4.937 9 0.549 1.601 0.113
Error 122.666 358 0.343
Total 3588.117 390
174
The above table 5.76 exhibits ANOVA results for opportunistic behaviour
for prepaid and postpaid services of selected cities and selected telecom service
providers. It is observed that the variation in the opportunistic behaviours
significant in the selected cities and the interaction between selected telecom
service providers and selected cities.
Opportunistic behaviour of Prepaid and Postpaid subscribers between

selected cities has been further analysed by using a Post-Hoc test. The results
of which are given below.

Mean Difference Lower
(I) City (J) City Std. Error p-value
(I-J) Bound
Amritsar .3228(*) 0.0836 0.002 .08792
Ludhiana Patiala .6094(*) 0.0839 0.01 0.3738
Chandigarh .4870(*) 0.0834 0.01 0.2527
Ludhiana -.3228(*) 0.0836 0.002 -0.5577
Amritsar
Patiala .2866(*) 0.0843 0.01 .04992
Ludhiana -.6094(*) 0.0839 0.01 -0.8449
Patiala
Amritsar -.2866(*) 0.0843 0.01 -0.5233
Chandigarh Ludhiana -.4870(*) 0.0834 0.01 -0.7213
The above table 5.77 explains a post-hoc test for multiple comparisons
among selected cities. It was carried out using Scheffe’s multiple comparisons.
After applying the test, it was observed that there are significant differences
between Ludhiana and other cities and Patiala and Amritsar. But other
differences are not significant amongst other cities.
On the basis of multiple comparisons, opportunistic behaviour of prepaid

and postpaid subscribers between selected telecom operators has been further
analysed by using t-test. The results of which are given below.

Airtel Ludhiana

Opportunistic Prepaid 2.5833 0.1094 .0447
2.408** 0.024
behavior Postpaid 3.0789 0.4934 .1132
175
Above table 5.78 indicates t-test results for opportunistic behaviour of
prepaid and postpaid subscribers among all Airtel subscribers of Ludhiana city.
There are significant differences between prepaid(2.58) and postpaid (3.08)
subscribers of Ludhiana Airtel.

Hutch Ludhiana

Variable Mean
Postpaid Deviation Mean t-value p-value
Opportunistic Prepaid 3.2656 0.8925 0.3156
.874** 0.405
behavior Postpaid 2.9743 0.4409 0.1069

prepaid and postpaid subscribers among all Ludhiana Hutch subscribers. There
are significant differences between prepaid(3.26) and postpaid (2.98)
subscribers of Ludhiana Hutch.

Hutch Amritsar

Opportunistic Prepaid 2.7031 .1145 .0405
3.145** 0.006
behavior Postpaid 3.2684 .7221 .1751

prepaid and postpaid subscribers among all Amritsar Hutch subscribers. There
are significant differences between prepaid(2.70) and postpaid (3.27)
subscribers of Amritsar Hutch.

Tata Indicom Amritsar

3.559** 0.004
176
Table 5.81 indicates t-test results for opportunistic behaviour of prepaid
and postpaid subscribers among all Amritsar Tata Indicom subscribers. There
are significant differences between prepaid (1.88) and postpaid
(2.98)subscribers of Amritsar Tata Indicom.

Reliance Patiala

0.469** 0.655
behavior Postpaid 3.2768 0.1746 .04672

prepaid and postpaid subscribers among all Patiala Reliance subscribers. There
are significant differences between prepaid(3.08) and postpaid (3.28)subscribers
of Patiala Reliance.

Hutch Patiala

.699** 0.491

prepaid and postpaid subscribers among all Patiala Hutch. There are significant
differences between prepaid(2.91) and postpaid(2.97)subscribers of Patiala
Hutch.
5.4.6 Reliability Analysis - Scale (Alpha) for Key Mediating Variable-Trust

Alpha = .8621

the reliability. The data for analysis is reliable one as its’ value is >.6.So, various
statistical tools can be applied and tested.
177
5.4.6.1 Results for Opportunistic Behaviour between Prepaid and Postpaid
Subscribers and Telecom Service Providers (TSPs)
a) In order to test the difference between cities, prepaid/postpaid subscribers

and their interaction for trust, following hypotheses are specified:
Ho1: There is no significant difference for trust between prepaid and

HoA: There is significant difference for trust between prepaid and

Ho2: There is no significant difference for trust between TSPs.
HoA: There is significant difference for trust between TSPs.
Ho3: There is no interaction for trust between TSPs and prepaid and
HoA: There is interaction for trust between TSPs and prepaid and
Table 5.84: Two Way ANOVA for Selected Service Provider and Prepaid
Type III Sum Mean

of Squares Square
Corrected Model 10.167 7 1.452 3.31 0.002
Intercept 2738.775 1 2738.775 6241.078 0.01
TSP 1.177 3 0.392 0.894 0.444
Pr/Po 8.423 1 8.423 19.195 0.01
TSP* Pr/Po 1.873 3 0.624 1.423 0.236
Error 167.633 382 0.439
Total 3481.611 390
178
The above table 5.84 explains ANOVA results for trust for prepaid and
postpaid subscribers of selected telecom service providers. It is observed that
the variation in the trust significant in the prepaid and postpaid subscribers.
Table 5.85: Comparison of Trust and its Dimensions for Reliance

Prepaid/ Std.
Postpaid Deviation
Prepaid 2.5207 0.859 2.918 0.006**
Trust
Postpaid 3.0454 0.5792
Prepaid 2.5212 0.7734 3.873 .001**
Perceived risk
Postpaid 3.1079 0.6164
Technology Prepaid 2.6 1.1456 1.183 0.246
Orientation Postpaid 2.8923 0.7474
Prepaid 2.6194 0.8118 2.94 0.006**
Reputation
Postpaid 3.1329 0.5881

prepaid and postpaid subscribers for trust, perceived risk and reputation of
Reliance. However, these differences for technology orientation were found to be
non-significant. Trust, perceived risk and reputation are more important for the
postpaid subscribers as compared to prepaid subscribers.
Table 5.86: Comparison of Trust and its Dimensions for Hutch

Prepaid/ Std.
Postpaid Deviation
Prepaid 2.8424 0.7584
Trust 0.957 0.344
Postpaid 2.9821 0.4774
Perceived Prepaid 2.7993 0.7251
1.682 0.1
risk Postpaid 3.0364 0.4841
Technology Prepaid 2.9194 0.9924
0.034 0.973
orientation Postpaid 2.9254 0.7295
It is evident from table 5.86, that there is not significant difference

between prepaid and postpaid subscribers for trust, perceived risk and
reputation of Hutch.
179
Table 5.87: Comparison of Trust and its Dimensions for Tata Indicom
Prepaid/ Std.
Postpaid Deviation
Prepaid 2.8005 0.8921
Trust 1.18 0.241
Postpaid 3.0113 0.8342
Prepaid 2.7341 0.9126
Perceived risk 1.853 0.067
Postpaid 3.0839 0.8983
0.798 0.427
Prepaid 2.8757 0.6403
Reputation 0.645 0.52
Postpaid 2.966 0.6864

prepaid and postpaid subscribers for trust, perceived risk and reputation of Tata
Indicom.
5.4.6.2 Results for Trust between Selected Cities and Prepaid and
a) In order to test the difference between selected cities, prepaid/postpaid

subscribers and their interaction following hypotheses are specified:
Ho1: There is no significant difference for trust between all the four
cities.
HoA: There is significant difference for trust between all the four cities.


Ho3: There is no interaction for trust between cities and prepaid and
HoA: There is interaction for trust between cities and prepaid and
180
Table 5.88: Two-way ANOVA for Trust in Selected cities and Prepaid and
Type III Sum of

Squares
Corrected Model 30.844 7 4.406 11.454 0.001
Intercept 2762.344 1 2762.344 7180.471 0.001
City 18.553 3 6.184 16.076 0.001
Pr/Po 6.253 1 6.253 16.255 0.001
City* Pr/Po 2.517 3 0.839 2.181 0.09
Error 146.956 382 0.385
Total 3481.611 390
The above table 5.88 shows ANOVA results for trust for prepaid and
postpaid services of selected cities. It is observed that the variation in the trust is
significant in the selected cities and prepaid and postpaid subscribers. The
interaction between prepaid and postpaid subscribers and selected cities is also
significant.
Trust of prepaid and postpaid subscribers and selected cities has been
95% Confidence
Mean Interval
Std.
(I) City (J) City Difference p-value
Error Lower Upper
(I-J)
Bound Bound
Amritsar .4187(*) 0.0886 0.05 0.1699 0.6676
Ludhiana Patiala .6250(*) 0.0888 0.05 0.3756 0.8745
Chandigarh .5131(*) 0.0884 0.05 0.265 0.7613
The above table 5.89 explains results for post-hoc test. It was carried out
using Scheffe’s multiple comparisons among selected cities. After applying the
test, it was observed that there are significant differences between Ludhiana and
other cities. But other differences are not significant amongst other cities.
181
On the basis of multiple comparisons, further t-test was carried out. The
results of which are given below:
Table 5.90: Comparison of Trust and its Dimensions for Amritsar City
Prepaid/ Std.
Postpaid Deviation
Prepaid 2.5155 0.7832
Trust 3.435 0.001**
Postpaid 3.0494 0.5376
Prepaid 2.5538 0.7688 4.085 0.001**
Perceived risk
Postpaid 3.1002 0.5281

2.308 0.026*
Prepaid 2.5733 0.6046 3.846 0.001**
Reputation
Postpaid 3.101 0.6416

prepaid and postpaid subscribers for trust, perceived risk, technology orientation
and reputation of Amritsar city. In case of trust, perceived risk and reputation the
results are highly significant as compared to technology orientation. Trust,
perceived risk, technology orientation and reputation are more important for the
Table 5.91: Comparison of Trust and its Dimensions for Patiala City
Prepaid/ Std.
Postpaid Deviation
Prepaid 2.6018 0.6273
Trust 0.937 0.351
Postpaid 2.7078 0.4621
Prepaid 2.3895 0.5318
Perceived risk 2.087 0.04*
Postpaid 2.6328 0.5419

1.553 0.124

prepaid and postpaid subscribers for perceived risk of Patiala city. For trust and
technology orientation the results are non-significant. Perceived risk is more
important for the postpaid subscribers as compared to prepaid subscribers.
182
Table 5.92: Comparison of Trust and its Dimensions for Chandigarh City
Prepaid/
Postpaid
Prepaid 2.5762 0.6898
Trust 2.473 0.015
Postpaid 2.9 0.5801
Prepaid 2.6454 0.697
Perceived risk 2.692 0.008**
Postpaid 3.0014 0.5854

2.271 0.025*
Prepaid 2.6646 0.7235
Reputation 1.2 0.235
Postpaid 2.8343 0.5628

prepaid and postpaid subscribers for perceived risk and technology orientation of
Chandigarh city. For trust and reputation the results are non-significant. In case
of perceived risk, the results are highly significant as compared to technology
orientation. Perceived risk and technology orientation are more important for the

a) In order to test the difference between cities, TSPs and their interaction
cities.
Ho2: There is no significant difference for trust between TSPs.
HoA: There is significant difference for trust between TSPs.
Ho3: There is no interaction for trust between cities and TSPs.
HoA: There is interaction for trust between cities and TSPs.
183
Table 5.93: Two Way ANOVA for Selected Cities and Selected Telecom
Service Providers

Source df F-value P-value
Squares Square
Corrected Model 68.006 15 4.534 15.443 0.001
Intercept 3298.342 1 3298.342 11235.338 0.001
City 22.135 3 7.378 25.134 0.001
TSP 0.361 3 0.12 0.409 0.746
City* TSP 45.718 9 5.08 17.304 0.001
Error 109.795 374 0.294
Total 3481.611 390
The ANOVA results for trust presented in the above table of selected
cities and selected telecom service providers. It is observed that the variation in
the trust is significant in the selected cities and the interaction between selected
telecom service providers and selected cities.
Trust of selected cities and selected telecom service providers has been
further analysed by using one-way ANOVA. The results of which are given
below.
Table 5.94: One Way ANOVA for Ludhiana and Selected Telecom Operators
Sum of Mean
Source of Variation df F-value P-value
Squares Square
Between Groups 23.372 3 7.791 30.822 0.01
Trust Within Groups 24.012 95 0.253
Total 47.384 98

Reliance, Airtel, Hutch and Tata Indicom for trust in Ludhiana city. Scheffe’s
Post-Hoc test was carried for multiple comparisons in order to see the significant
184
Table 5.95: Multiple Comparison for Trust between
95% Confidence
Mean Interval
Std. P-
Difference
Reliance 1.1893(*) 0.1437 0.01 0.7804 1.5982
Tata
Trust Airtel 1.1940(*) 0.1437 0.01 0.7851 1.603
Indicom
Hutch .9407(*) 0.1437 0.01 0.5318 1.3496
The above table 5.95 explains Scheffe’s Post-Hoc results. It was carried
out to test the significant differences for trust amongst telecom service providers
for Ludhiana city. Differences are significant between Reliance and Tata
Indicom, Airtel and Tata Indicom, Hutch and Tata Indicom and Tata Indicom with
other operators. All other combinations of differences were found to be non-
significant.
Table 5.96: One Way ANOVA for Amritsar and Selected Telecom 0perators
Sum of Mean
Squares Square
Between Groups 5.649 3 1.883 4.663 0.004
Total 43.202 96

Reliance, Airtel, Hutch and Tata Indicom for trust in Amritsar city. Scheffe’s Post-
Hoc test was carried for multiple comparisons in order to see the significant

95% Confidence
Mean Interval
Std. P-
Difference
Hutch Reliance -.5895(*) 0.1797 0.017 -1.1012 .0777
Trust Tata
Reliance -.5590(*) 0.1797 0.026 -1.0708 .0472
Indicom
185
for Amritsar city. Differences are significant between Reliance and Tata Indicom
and Reliance and Hutch. All other combinations of differences were found to be
non-significant.
Table 5.98: One-way ANOVA for Patiala and Selected Telecom 0perators
Sum of Mean
Squares Square
Between Groups 11.099 3 3.7 23.008 0.01
Total 25.893 95

Reliance, Airtel, Hutch and Tata Indicom for trust in Patiala city. Scheffe’s Post-
Hoc test was carried for multiple comparisons in order to see the significant

95% Confidence
Mean Interval
Std. P-
Difference
Reliance -.8851(*) 0.1187 0.01 -1.2231 -0.5471
Tata
Trust Airtel -.5825(*) 0.1134 0.01 -0.9056 -0.2595
Indicom
Hutch -.7649(*) 0.1134 0.01 -1.0879 -0.4419
for Patiala city. Differences are significant between Reliance and Tata Indicom,
Airtel and Tata Indicom, Hutch and Tata Indicom. All other combinations of
differences were found to be non-significant.
186
Table 5.100: One Way ANOVA for Chandigarh and Selected Telecom
0perators
Sum of Mean
Squares Square
Between Groups 5.962 3 1.987 5.588 0.001
Total 39.398 97

Reliance, Airtel, Hutch and Tata Indicom for trust in Chandigarh city. Scheffe’s
Post-Hoc test was carried for multiple comparisons in order to see the significant

95% Confidence
Mean Interval
Std. P-
Difference
Dependent Error Value Lower Upper
Airtel -.5481(*) 0.1723 0.022 -1.0386 -.0575
Trust Reliance
Hutch -.6562(*) 0.1723 0.004 -1.1468 -0.1657
Scheffe’s Post-Hoc test was carried out to test the significant differences
for trust amongst telecom service providers for Chandigarh city. Differences are
significant between Reliance and Airtel and Reliance and Hutch. All other
5.4.6.4 Results for Trust between Selected Cities, Prepaid and Postpaid
Subscribers and Telecom Service Providers (TSPs)

and TSPs their interaction following hypotheses are specified:
cities.
187
Ho2: There is no significant difference for trust between telecom service
providers.
HoA: There is significant difference for trust between telecom service

providers.


Ho4: There is no interaction for trust between city and telecom service
providers.
HoA: There is interaction for trust between city and telecom service
providers.
Ho5: There is no interaction for trust between city and prepaid and
HoA: There is interaction for trust between city and prepaid and postpaid
subscribers.
Ho6: There is no interaction for trust between TSP and prepaid and
HoA: There is interaction for trust between TSP and prepaid and
Ho7: There is no interaction for trust among TSP, prepaid and postpaid
subscribers and city.
HoA: There is interaction for trust among TSP, prepaid and postpaid
subscribers and city.
188
Table 5.102: Multiple Factor ANOVA for Selected Cities, Selected Service
Providers and Prepaid and Postpaid Services
Type III Sum of Mean p-

Source df F-value
Squares Square value
Corrected Model 83.117 31 2.681 10.138 0.01
Intercept 2725.888 1 2725.888 10306.666 0.01
City 16.843 3 5.614 21.228 0.01
TSP 1.308 3 0.436 1.648 0.178
Pr/Po 6.364 1 6.364 24.062 0.01
City* TSP 42.724 9 4.747 17.949 0.01
City* Pr/Po 1.922 3 0.641 2.423 0.066
TSP* Pr/Po 1.91 3 0.637 2.408 0.067
City* TSP* Pr/Po 4.897 9 0.544 2.057 0.033
Error 94.683 358 0.264
Total 3481.611 390
The above table 5.102 explains ANOVA results for trust between prepaid
and postpaid services of selected cities and selected telecom service providers.
It is observed that the variation in the trust is significant in the selected cities and
the interaction between selected TSPs and selected cities.
Table 5.103: Comparison of Trust and its Dimensions for Reliance

Ludhiana

Prepaid 2.3214 0.6852 0.2797
Trust 3.25** 0.004
Postpaid 3.1454 0.4939 0.1133
Above table 5.103 indicates t-test results for trust of prepaid and postpaid
subscribers among all Reliance subscribers of Ludhiana city. There are
significant differences between prepaid (2.32) and postpaid(3.15) subscribers of
Ludhiana Reliance.
189
Table 5.104: Comparison of Trust and its Dimensions for Airtel Amritsar

Prepaid 2.59233 0.6281 0.2221
Trust 2.169** 0.042
Postpaid 3.1533 0.5582 0.1492
subscribers among all Airtel subscribers of Amritsar city. There are significant
differences between prepaid (2.59) and postpaid (3.15) subscribers of Amritsar
Airtel.
Table 5.105: Comparison of Trust and its Dimensions for Hutch Amritsar

Prepaid 2.0357 .6576 .2325
Trust 3.415** 0.002
Postpaid 2.9412 .6003 .1456
subscribers among all Hutch Indicom subscribers of Amritsar city. There are
significant differences between prepaid (2.03) and postpaid (2.94) subscribers of
Amritsar Hutch.
5.4.7 Reliability Analysis - Scale (Alpha) for Key Mediating Variable

Alpha = .8464

the reliability. The data for analysis is reliable one as its’ value is >.6.So various
statistical tools can be applied and tested.
190
5.4.7.1 Results for Relationship Commitment between Selected Cities and
Prepaid and Post Paid Subscribers

Ho1: There is no significant difference for relationship commitment

HoA: There is significant difference for relationship commitment between



Ho3: There is no interaction for relationship commitment between cities

HoA: There is interaction for relationship commitment between cities and

Table 5.106: Two Way ANOVA Prepaid and Postpaid Subscribers and
Selected Cities
Squares Square
Corrected Model 7.701 7 1.1 3.93 0.01
Intercept 2770.245 1 2770.245 9897.358 0.01
TSP 1.244 3 0.415 1.481 0.219
Pr/Po 6.65 1 6.65 23.758 0.01
TSP* Pr/Po 0.236 3 7.86E-02 0.281 0.839
Error 106.921 382 0.28

Total 3435.921 390
191
The above table 5.106 explains ANOVA results for relationship
commitment for prepaid and postpaid services. It is observed that the variation in
the relationship commitment is significant.
Table 5.107: Comparison of Relationship Commitment and its Dimensions

for Reliance
Prepaid/ Std.
Postpaid Deviation
Relationship Prepaid 2.6878 0.7158
2.225 0.033*
commitment Postpaid 3.015 0.4219
Degree and Prepaid 2.6543 0.7072
length of 2.542 0.016*
association Postpaid 3.0264 0.4401
Sense of Prepaid 2.619 0.714

2.504 0.018*
belongingness Postpaid 3.0037 0.4639

prepaid and postpaid subscribers for relationship commitment, degree and
length of association and sense of belongingness of Reliance. Relationship
commitment, degree and length of association and sense of belongingness and
security are more important for the postpaid subscribers as compared to prepaid
subscribers.
Table 5.108: Comparison of Relationship Commitment and its

Dimensions for Airtel
Prepaid/ Std.
Postpaid Deviation
3.143 0.002**
Degree and Prepaid 2.6933 0.6362
length of 2.095 0.039*

3.39 0.001**

length of association and sense of belongingness of Airtel. In case of relationship
192
commitment and sense of belongingness, results are highly significant as
compared to degree and length of association. Relationship commitment, degree
and length of association and sense of belongingness are more important for the

for Hutch
Prepaid/ Std.
Postpaid Deviation
2.09 0.042*
Degree of Prepaid 2.8641 0.5554 1.447 0.155
2.62 0.01**

prepaid and postpaid subscribers for relationship commitment and sense of
belongingness for Hutch. However, these differences for degree of association
were found to be non-significant. In case of sense of belongingness, the results
are highly significant as compared to relationship commitment. Relationship
commitment and sense of belongingness are more important for the postpaid
5.4.7.2 Results for relationship commitment between Prepaid and

Postpaid subscribers Selected Cities
In order to test the difference between cities, prepaid/postpaid

subscribers and their interaction following hypotheses are specified:



193


Table: 5.110: Two Way ANOVA for Prepaid and Postpaid Subscribers and
Selected Cities
Squares Square
Corrected Model 24.746 7 3.535 15.025 0.001
Intercept 2780.96 1 2780.96 11819.973 0.001
City 14.962 3 4.987 21.198 0.001
Pr/Po 5.556 1 5.556 23.613 0.001
City* Pr/Po 3.131 3 1.044 4.436 0.004
Error 89.876 382 0.235
Total 3435.921 390

commitment for prepaid and postpaid services of selected cities. It is observed
that the variation in the relationship commitment is significant in the selected
cities and the interaction between prepaid and postpaid services and selected
cities.
Relationship commitment of Prepaid and Postpaid subscribers in selected

cities has been further analysed by using a Post-Hoc test. The results of which
are given below.
194
95% Confidence
Mean Interval
p-
(I) City (J) City Difference Std. Error
value Lower Upper
(I-J)
Bound Bound
Amritsar .2370(*) .0693 0.009 .04252 0.4316
Chandigarh .2132(*) .0691 0.024 .0191 0.4073
Ludhiana -.2370(*) .0693 0.009 -0.4316 -.0425
Amritsar
Patiala .3306(*) .0698 0.05 0.1345 0.5267
Ludhiana -.5676(*) .0695 0.05 -0.7627 -0.3725
Patiala Amritsar -.3306(*) .0698 0.05 -0.5267 -0.1345
Chandigarh -.3544(*) .0697 0.05 -0.55 -0.1589
Ludhiana -.2132(*) .0691 0.024 -0.4073 -.0191
Chandigarh
Patiala .3544(*) .0697 0.05 0.1589 0.55
The above table 5.111 explains the results of post-hoc test. It was carried
out for multiple comparisons among selected cities using Scheffe’s multiple
comparisons. After applying the test, it was observed that there are significant
differences between Ludhiana and other cities, Amritsar and Patiala, Patiala and
Chandigarh. But other differences are not significant amongst other cities.
Relationship commitment of Prepaid and Postpaid subscribers has been


for Amritsar City
Prepaid/ Std.
Postpaid Deviation
5.087 0.001**
Degree and length Prepaid 2.5532 0.5402
5.996 0.001**
of association Postpaid 3.1508 0.414
4.499 0.001**
195
length of association and sense of belongingness of Amritsar City. In case of
relationship commitment, degree and length of association and sense of
belongingness are highly significant. Relationship commitment, degree and
length of association and sense of belongingness are more important for the

for Patiala City
Prepaid/ Std.
Postpaid Deviation
2.611 0.011*
Degree and length of Prepaid 2.4781 0.4995
2.081 0.04
3.652 0.001**

prepaid and postpaid subscribers for relationship commitment and sense of
belongingness of Patiala City. However, these differences for degree and length
of association were found to be non-significant. In case of sense of
belongingness are highly significant as compared to relationship commitment.
Relationship commitment and sense of belongingness are more important for the

for Chandigarh City
Prepaid/ Std.
Variables
1.074 0.285
Degree and length Prepaid 3.0533 0.6627
0.013 0.99
of association Postpaid 3.0519 0.4914
2.178 0.032*
196
prepaid and postpaid subscribers for sense of belongingness of Chandigarh City.
However, these differences for relationship commitment and degree and length
of association were found to be non-significant. Sense of belongingness is more
important for the postpaid subscribers as compared to prepaid subscribers.
5.4.7.3 Results for Relationship Commitment between Selected Cities and

In order to test the difference between cities, TSP and their interaction



between TSPs.

TSPs.

and TSPs.

TSPs.
197
Table: 5.115 Two Way ANOVA for Selected Telecom Service Providers and
Selected Cities

Squares Square
Corrected Model 38.545 15 2.57 12.633 0.001
Intercept 3314.659 1 3314.659 16295.223 0.001
City 15.523 3 5.174 25.437 0.001
TSP 0.994 3 0.331 1.63 0.182
City* TSP 21.582 9 2.398 11.789 0.001
Error 76.076 374 0.203
Total 3435.921 390

commitment for prepaid and postpaid services of selected cities and selected
telecom service providers. It is observed that the variation in the relationship
commitment is significant in the selected cities and the interaction between
selected telecom service providers and selected cities.
Relationship commitment of selected cities and selected Telecom Service

Providers has been further analysed by using one way ANOVA. The results of
which are given below.
Table 5.116: One Way ANOVA: Ludhiana and Selected Telecom 0perators
Sum of Mean F-
Source of Variation df p-value
Between
14.137 3 4.712 36.995 0.01
Groups
Relationship
Commitment Within Groups 12.101 95 0.127
Total 26.238 98

Reliance, Airtel, Hutch and Tata Indicom for relationship commitment in
Ludhiana City. Scheffe’s Post-Hoc test was carried for multiple comparisons in
order to see the significant differences between the combination of the groups.
198
Table 5.117: Multiple Comparison for Relationship Commitment between
95% Confidence
Mean Interval
Std. P-
Difference
Reliance .8955(*) 0.102 0.001 0.6052 1.1858
Tata
Airtel .9530(*) 0.102 0.001 0.6627 1.2433
Indicom
Hutch .7387(*) 0.102 0.001 0.4484 1.029
Table 5.117 exhibits the results of Scheffe’s Post-Hoc test. It was carried
out to test the significant differences for relationship commitment amongst
telecom service providers for Ludhiana city. Differences are significant between
Reliance and Tata Indicom, Airtel and Tata Indicom, Hutch and Tata Indicom. All
Table 5.118: One Way ANOVA: Patiala and Selected Telecom 0perators
Sum of Mean F-
Source of Variation Df p-value
Between
3.916 3 1.305
Groups
Relationship 7.356 .001
Commitment Within Groups 16.328 92 0.177
Total 20.244 95

Reliance, Airtel, Hutch and Tata Indicom for relationship commitment in Patiala

95% Confidence
Mean
Std. P- Interval
Difference
Airtel .3789(*) 0.1247 0.031 .02382 0.734
Relationship
Reliance Tata
Commitment .5658(*) 0.1247 0.01 0.2106 0.9209
Indicom
199
Above Table 5.119 explains results of Scheffe’s Post-Hoc test. It was
carried out to test the significant differences for relationship commitment
amongst telecom service providers for Patiala city. Differences are significant
between Reliance and Airtel and between Reliance and Tata Indicom. All other
5.4.7.4 Results for Relationship Commitment between Selected Cities,

Prepaid & Postpaid Subscribers and Telecom Service Providers
(TSP)

and selected telecom service providers (TSPs) and their interaction following
hypotheses are specified:





between TSPs.

TSPs.

HoA: There is interaction for relationship commitment cities and prepaid

Ho5: There is no interaction for relationship commitment between TSPs

200
HoA: There is interaction for relationship commitment between TSPs and
Ho6: There is no interaction for relationship commitment between TSPs

and cities.
HoA: There is interaction for relationship commitment between TSPs and

cities.
Ho7: There is no interaction for relationship commitment among TSPs,

prepaid & postpaid subscriber and cities.
HoA: There is interaction for relationship commitment among TSPs,

prepaid & postpaid subscriber and cities.
Table 5.120: Multifactor ANOVA for Prepaid and Postpaid Subscribers,

TSPs and Selected Cities
Type III Sum Mean

of Squares Square
Corrected Model 50.625 31 1.633 9.135 0.001
Intercept 2748.021 1 2748.021 15372.543 0.001
City 13.602 3 4.534 25.364 0.001
TSP 1.328 3 0.443 2.476 0.061
Pr/Po 5.574 1 5.574 31.181 0.001
City* TSP 20.387 9 2.265 12.672 0.001
City* Pr/Po 2.245 3 0.748 4.186 0.006
TSP* Pr/Po 0.32 3 0.107 0.597 0.617
City* TSP* Pr/Po 3.521 9 0.391 2.188 0.022
Error 63.997 358 0.179
Total 3435.921 390
Table 5.120 presents the ANOVA results for relationship commitment for
prepaid and postpaid services of selected cities and selected telecom service
201
providers. It is observed that the variation in the relationship commitment is
significant in the interaction amongst selected telecom service providers and
selected cities, prepaid & postpaid subscribers and cities. The interaction
amongst city, Telecom service provider and prepaid & post paid subscribers is
also significant one.

for Ludhiana Reliance

Relationship Prepaid 2.5631 .4981 .2034
2.87** .009
commitment Postpaid 3.04 .3072 .0705
Table 5.121 indicates t-test results for relationship commitment of prepaid

and postpaid subscribers among all Reliance subscribers of Ludhiana city. There
are significant differences between prepaid (2.56) and postpaid (3.04)
subscribers of Ludhiana Reliance

for Amritsar Airtel

2.123** .046
Above table 5.122 indicates t-test results for relationship commitment of

prepaid and postpaid subscribers among all Airtel subscribers of Amritsar city.
There are significant differences between prepaid (2.61) and postpaid (3.12)
subscribers of Amritsar Airtel.
Table 5.123: Comparison of relationship commitment and its dimensions

for Amritsar Hutch

4.218** .001
202
prepaid and postpaid subscribers among all Hutch subscribers of Amritsar city.
There are significant differences between prepaid (2.43) and postpaid (3.00)
subscribers of Amritsar Hutch.

for Amritsar Tata Indicom

4.394** .001

prepaid and postpaid subscribers among all Tata Indicom subscribers of
Amritsar city. There are significant differences between prepaid (2.24) and
postpaid (3.13) subscribers of Amritsar Tata Indicom.
203
Figure 5.1: Regression Results of Reliance
204
5.4.7.5 Results of Regression Values of Reliance
For Reliance various β-values represent the closeness amongst various

dependent and independent variables. The model diagram represents that in
shared value security, privacy and ethics are highly significant. Security (β=.424)
plays more significant role as compared to privacy (β=.373) and ethics (β=.295).
In opportunistic behavior information asymmetry is comparatively highly
significant as compared to regulatory control (β=.475). Similarly in
communication openness (β=.442) plays more important role as compared to
speed of response (β=.325) and quality of information (β=.331). In trust,
opportunistic behavior (β=.345) plays more important role as compared to
communication (β=.322) and shared value (β=.312). For trust, technology
orientation (β=.441) is highly significant as compared to highly significant values
of perceived risk (β=.337) and reputation (β=.335). Similarly for relationship
commitment shared value (β=.520) has more significant role to play as compare
to trust (β=.340). For relationship commitment sense of belongingness (β=.542)
is more closely related as compared to degrees and length of association
(β=.513).
205
Figure 5.2: Regression Results of Airtel
* - Significant at .05 level
206
5.4.7.6 Results of Regression Values of Airtel
For Airtel various β-values represent the closeness amongst various
shared value security, privacy and ethics are highly significant. Privacy (β=.504)
plays more significant role as compared to security (β=.475) and ethics (β=.315).
In opportunistic behavior information asymmetry (β=.705) is comparatively highly
communication quality of information (β=.538) plays more important role as
compared to speed of response (β=.406) and openness (β=.406). In trust,
orientation (β=.481) is highly significant as compared to highly significant values
of perceived risk (β=.375) and reputation (β=.392). Similarly for relationship
commitment trust (β=.446) as compared to shared value (β=.274). For
relationship commitment degree and length of association (β=.579) is more
closely related as compared to sense of belongingness (β=.526).
207
Figure 5.3: Regression Results of Huch
208
5.4.7.7 Results of Regression Values of Hutch
For Hutch various β-values represent the closeness amongst various
shared value security, privacy and ethics are highly significant. Security (β=.537)
plays more significant role as compared to privacy (β=.472) and ethics (β=.361).
In opportunistic behavior information asymmetry (β=.604) is comparatively highly
communication openness (β=.449) plays more important role as compared to
orientation (β=.463) is highly significant as compared to perceived risk (β=.331)
and reputation (β=.321). Similarly for relationship commitment trust (β=.497) is
highly significant as compared to shared value (β=.160). For relationship
commitment, sense of belongingness is highly significant (β=.584) as compared
to degree and length of association (β=.496).
209
Figure 5.4: Regression Results of Tata Indicom
210
5.4.7.8 Results of Regression Values of Tata Indicom
For Tata Indicom various β-values represent the closeness amongst
various dependent and independent variables. The model diagram represents
that in shared value security, privacy and ethics are highly significant. Security
(β=.403) plays more significant role as compared to privacy (β=.379) and ethics
(β=.327). In opportunistic behavior regulatory control (β=.587) is comparatively
highly significant as compared to information asymmetry (β=.452). Similarly in
communication, openness (β=.464) plays more important role as compared to
opportunistic behavior is highly significant (β=.523) plays more important role as
compared to communication (β=.255) and shared value (β=.179). For trust,
technology orientation (β=.448) is highly significant as compared to perceived
risk (β=.356) and reputation (β=.260). Similarly for relationship commitment
shared value (β=.475) is highly significant as compared to trust (β=.403). For
relationship commitment, sense of belongingness (β=.552) is highly significant
as compared to degree and length of association (β=.508).
211
Figure 5.5: Regression Results of Prepaid Subscribers
212
5.4.7.9 Results of Regression Values of Prepaid Subscribers
For prepaid subscribers various β-values represent the closeness
amongst various dependent and independent variables. The model diagram
represents that in shared value security, privacy and ethics are highly significant.
Security (β=.447) plays more significant role as compared to privacy (β=.398)
and ethics (β=.323). In opportunistic behavior, regulatory control (β=.598) is
comparatively highly significant as compared to information asymmetry (β=.496).
Similarly in communication, openness (β=.416) plays more important role as
compared to quality of information (β=.366) and speed of response (β=.362). In
trust, opportunistic behavior is highly significant (β=.433) plays more important
role as compared to communication (β=.312) and shared value (β=.147). For
trust, technology orientation (β=.483) is highly significant as compared to
perceived risk (β=.327) and reputation (β=.288). Similarly for relationship
commitment shared value (β=.461) is highly significant as compared to trust
(β=.279). For relationship commitment, degree and length of association
(β=.544) is highly significant as compared to sense of belongingness (β=.532).
213
Figure 5.6: Regression Results of Postpaid Subscribers
214
5.4.7.10 Results of Regression Values of Postpaid Subscribers
For postpaid subscribers various β-values represent the closeness
amongst various dependent and independent variables. The model diagram
represents that in shared value security, privacy and ethics are highly significant.
Security (β=.450) plays more significant role as compared to privacy (β=.440)
and ethics (β=.320). In opportunistic behavior, regulatory control (β=.634) is
comparatively highly significant as compared to information asymmetry (β=.469).
Similarly in communication, openness (β=.457) plays more important role as
compared to quality of information (β=.340) and speed of response (β=.336). In
trust, communication (β=.432) is highly significant plays more important role as
compared to opportunistic behavior (β=.308) and shared value (β=.210). For
trust, technology orientation (β=.442) is highly significant as compared to
perceived risk (β=.360) and reputation (β=.327). Similarly for relationship
commitment trust (β=.555) is highly significant as compared to shared value
(β=.233). For relationship commitment, degree and length of association
(β=.558) is highly significant as compared to sense of belongingness (β=.521).
215
Figure 5.7: Regression Results of Combined Prepaid and Postpaid Subscribers
216
5.4.7.11 Results of Regression Values of Combined Prepaid and Postpaid
Subscribers
For overall β-values of selected telecom service providers in selected city
represent the closeness amongst various dependent and independent variables.
The model diagram represents that in shared value security, privacy and ethics
are highly significant. Security (β=.445) plays more significant role as compared
to privacy (β=.419) and ethics (β=.322). In opportunistic behavior, regulatory
control (β=.617) is comparatively highly significant as compared to information
asymmetry (β=.481). Similarly in communication, openness (β=.440) plays more
important role as compared to quality of information (β=.349) and speed of
response (β=.341). In opportunistic behavior (β=.436) is highly significant plays
more important role as compared to communication (β=.305) and shared value
(β=.188). For trust, technology orientation (β=.454) is highly significant as
compared to perceived risk (β=.349) and reputation (β=.312). Similarly for
relationship commitment trust (β=.437) is highly significant as compared to
shared value (β=.344). For relationship commitment, sense of belongingness
(β=.549) is highly significant as compared to degree and length of association
(β=.535).
217
Table 5.125: Effectiveness of Source of Information between Prepaid and
PLACE
Total
Ludhiana Amritsar Patiala Chandigarh p-value
Advertisements Yes 72 57 24 43 196 <0.001**
(Media): source
of information
No 27 41 74 54 196
of Mobile
Services
Word Of mouth: Yes 63 47 71 49 230 <0.001**
source of
information of No 36 51 27 48 162
Mobile Services
Company Outlet Yes 56 19 8 7 90
source of
<0.001**
information of No 43 79 90 90 302
Mobile Services
Internet: source Yes 1 3 1 2 7
of information
0.655
of Mobile No 98 95 97 95 385
Services
Chi-square for advertisement=15.97, word of mouth=89.60,
* Significant at .05 level; ** Significant at .01 level
On pursing above table 5.125, it is evident that results are highly
significant for advertisements as medium of information (<0.001), word of mouth
(<0.001) and company outlet (<0.001) between prepaid and postpaid
subscribers. The results for internet as source of information of mobile services
has been found non-significant.
Table 5.126: Subscription of Other Services of Selected Telecom Operators

Telecom Service PLACE
Provider Total
Ludhiana Amritsar Patiala Chandigarh p-value
Reliance Yes 47 10 21 12 90 <0.001**

No 49 88 79 86 302
Airtel Yes 51 19 16 34 120
<0,001**
No 45 78 84 64 271
Hutch Yes 19 16 7 14 56
0.07
No 77 82 93 84 336
Tata Indicom Yes 8 2 2 7 19
0.067
No 87 96 98 91 372
Chi-square Reliance=52.278, Airtel=39.220
* Significant at .05 level; ** Significant at .01 level
218
The above table 5.126 explains people’s preference for the subscription of
other services along with mobile services of various mobile operators. Highly
significant results are obtained for subscription of other services of Reliance
(0.001) and Airtel (0.001) amongst various cities covering Ludhiana, Amritsar,
Patiala and Chandigarh. For Hutch and Tata Indicom the results are found to be
non-significant for the subscription of other services along with the mobile one.
Table 5.127: Subscription between Prepaid and Postpaid Subscribers
Prepaid/Postpaid Ludhiana Amritsar Patiala Chandigarh Total p-value

Services Prepaid 21 26 26 34 107
0.001**
Postpaid 73 34 10 42 159
** Significant at .01 level , Chi-square = 28.718
It is evident from the above table 5.127 that significant differences are
found between prepaid and postpaid subscribers (0.001) amongst selected four
cities- Ludhiana, Amritsar, Patiala and Chandigarh.
Table 5.128: Evaluation of Various Purposes of Mobile Usage

Std.
S.No. Statements N Mean t-value p-value
Services Deviation
1 To stay in touch Prepaid 118 4.18 0.95 0.042 0.967
Postpaid 252 4.18 0.99
2 For Business or Prepaid 122 3.85 1.05 0.668 0.505
Professional
Requirement Postpaid 248 3.93 1.08
3 As a status symbol Prepaid 119 3.07 1.26 1.08 0.281
Postpaid 245 3.21 1.12
4 It is advantageous Prepaid 114 3.96 0.83 1.231 0.219
over Landline Postpaid 244 4.08 0.84
5 It adds to Mobility Prepaid 117 4.03 0.92 2.458 0.014*
Postpaid 239 4.26 0.78
6 For services Prepaid 120 3.98 0.91 0.916 0.361
Postpaid 238 4.08 0.9
7 Convenience of Prepaid 120 4.36 0.76 0.01 0.992
calling anytime Postpaid 263 4.36 0.82
8 Makes you easily Prepaid 121 4.12 0.98 2.109 0.036*
accessible Postpaid 251 4.31 0.73
219
On pursing table 5.128, it is evident that the results are significant for all
the four operators namely Reliance, Airtel, Hutch and Tata Indicom regarding the
purpose of usage of mobile phones. Significant differences are found between
prepaid and postpaid users who consider mobile usage as advantageous over
the landline (.0014) and mobile usage makes easily accessible (0.036). For the
rest of purposes, no significant differences are found among prepaid and
postpaid operators.
Figure 5.8: Purposes of Mobile Usage
5
4.5
4
3.5
Mean Scores
3
2.5
2
1.5
1
0.5
0
1 2 3 4 5 6 7 8
Reliance Airtel Hutch Tata Indicom
1. To stay in touch 5. It adds to Mobility

2. For Business or Professional Requirement 6. For services
3. As a status symbol 7. Convenience of calling anytime
4. It is advantageous over Landline 8. Makes you easily accessible
Above figure 5.8 mobile phones are used for used by subscribers for
different purposes of selected mobile service provided. In the above graph,
different purposes are taken on x-axis and mean scores of selected telecom
service providers on y-axis. For the purpose to stay in touch, there are not
significant differences between Reliance and Tata Indicom. But there are
significant differences between Reliance and Airtel and Reliance and Hutch.
Being professional requirement, there are significant differences among Tata
Indicom and Reliance, Airtel and Tata Indicom. In context of status symbol, there
220
are significant differences between Reliance, Tata Indicom and Airtel and Hutch.
Having advantage over the landline is another purpose where Reliance and Tata
Indicom has highest scores. Since mobile usage enhances your mobility, the
significant mean scores of Tata Indicom.
Table 5.129: Evaluation of Different Mobile Services between Prepaid and

S. Std.
Statements Services N Mean t-value p-value
No. Deviation
Short Message Prepaid 122 4.07 1.12 1.371 0.171
1
Services (SMS) Postpaid 263 3.89 1.16
Multi Media Prepaid 120 2.22 1.21 0.306 0.76
2 Message Services
(MMS) Postpaid 253 2.26 1.18
Prepaid 120 2.33 1.39 0.653 0.514
3 GPRS / Internet
Postpaid 245 2.23 1.3
Call Diverting Prepaid 119 2.26 1.32 0.11 0.912
Feature (Call
4
Forwarding / Call Postpaid 246 2.28 1.28
Diverting )
Information based Prepaid 118 2.24 1.2 0.422 0.673
5
services Postpaid 240 2.3 1.25
Getting News Prepaid 118 2.35 1.25 0.631 0.528
6 Update (Sports /
Others ) Postpaid 239 2.26 1.15
Prepaid 118 3.63 1.04 0.165 0.869
7 For STD calling
Postpaid 257 3.65 1.01
Prepaid 122 4.4 0.8 0.421 0.674
8 For Local calling
Postpaid 263 4.44 0.88
Telecom operators are providing various mobile services covering short
message service, multi-media service, GPRS, internet, call diverting features,
information based services, getting news update etc. No significant differences
are found between prepaid and postpaid subscribers regarding the availing of
various services. It implies that both types of subscribers are using mobile
phones to avail almost same kind of services. Results of each operator for
various purposes are shown in following figure 5.9.
221
Figure 5.9: Different Mobile Services between Prepaid and Postpaid
Subscribers
5
4.5
4
3.5
3
Mean Scores 2.5
2
1.5
1
0.5
0
1 2 3 4 5 6 7 8
1. Short Message Services (SMS) 5. Information based services

2. Multi Media Message Services (MMS) 6. Getting News Update (Sports / Others )
3. GPRS / Internet 7. For STD calling
4. Call Diverting Feature (Call Forwarding 8. For Local calling
/ Call Diverting )
The above figure 5.9 shows the significant differences between the
means of various types of services of selected telecom service provider. With
regard to usage of SMS services, there are significant differences between Tata
Indicom and Airtel. Whereas Reliance has got maximum mean score for multi-
media message services. Reliance and Tata Indicom have almost same mean
score for GPRS/internet. For call diverting feature, there are significant
differences between the mean scores of Reliance and Airtel. Reliance has
maximum mean score value for information- based services as compare to Tata
Indicom. For getting news update, Reliance has got significant mean scores
followed by Tata Indicom, Hutch and Airtel. For STD calling, there are significant
differences between the means of Reliance and Tata Indicom. For local calling,
there are not significant differences between the means of selected operators.
222
Table 5.130: Evaluation of Executive’s Knowledge About the Product
Yes/No Ludhiana Amritsar Patiala Chandigarh Total p-value

Executive's Yes 78 65 82 65 290
knowledge of <0.001
the Product No 2 18 1 9 30
Chi-square=26.456, ** Significant at .01 level
Table 5.130 explains customer care’s knowledge about the product is

highly significant (<0.001) for both prepaid and postpaid subscribers amongst all
selected cities i.e. Ludhiana, Amritsar, Patiala and Chandigarh.
Table 5.131: Considerations Prior to Purchase Decision for a Mobile

Service Provider
S. Prepaid/ Std.
Parameters N Mean t-value p-value
No. Postpaid Deviation
Prepaid 119 3.4 0.96 0.16 0.873
1 Brand Image
Postpaid 254 3.39 1
Prepaid 120 4.13 0.86 0.995 0.32
2 Network Connectivity
Postpaid 257 4.03 0.9
Prepaid 118 4.22 0.8 1.562 0.119
3 Coverage
Postpaid 258 4.08 0.8
Prepaid 119 4.07 0.79 0.509 0.611
4 Call tariff
Postpaid 255 4.02 0.87
Prepaid 116 4.13 0.73 0.481 0.631
5 Service Quality
Postpaid 255 4.09 0.83
Prepaid 117 4.09 0.82 1.501 0.134
6 Reliability
Postpaid 256 3.95 0.81
Prepaid 118 3.03 1.16 1.057 0.291
7 Advertisement
Postpaid 254 3.15 1.05
Prepaid 119 3.16 1.2 1.736 0.084
8 Sales Promotion
Postpaid 251 3.38 0.97
Prepaid 120 3.63 1.06 0.688 0.492
9 Value Added Services
Postpaid 255 3.71 0.87
Ease of availability and Prepaid 118 3.87 0.92 0.21 0.834
10
recharge Postpaid 257 3.85 0.88
Prepaid 122 3.66 1.03 1.656 0.099
11 Customer Care Services
Postpaid 256 3.84 0.83
Prepaid 120 3.88 0.87 0.809 0.419
12 Roaming facility
Postpaid 257 3.95 0.82
Prepaid 113 3.88 0.91 0.53 0.597
13 Rebate and discount
Postpaid 254 3.83 0.9
223
S. Prepaid/ Std.
Parameters N Mean t-value p-value
Prepaid 121 3.98 0.84 0.1 0.921
14 Voice clarity
Postpaid 257 3.98 0.84
Prepaid 117 3.79 1.04 2.124 0.035*
15 Transparency in billing
Postpaid 255 4.02 0.78
Prepaid 119 3.44 0.89 2.033 0.043*
16 Dealer services
Postpaid 253 3.64 0.9
Prepaid 118 3.22 1.09 3.209 0.002**
17 Word of Mouth
Postpaid 246 3.59 0.83
Prepaid 119 3.36 0.99 0.708 0.479
18 Friends’ advice
Postpaid 258 3.44 1.04
*significant at .01 level
**Significant at .05 level
As can be seen from the above table 5.131, the purchase decision is
influenced by various factors- Brand Image, network Connectivity, coverage, call
tariff, service quality, reliability, advertisement, sales promotion, value added
services, ease of availability and recharge customer care services, roaming
facility, and discount, Voice clarity Transparency in billing, dealer services, and
word of Mouth.
• Significant results are obtained for transparency in billing (0.035) between

prepaid (3.79) and postpaid (4.02) subscribers.
• Significant results are obtained for Dealer services (0.043) between

• Highly significant results can be seen for word of mouth (0.002) between
• For the rest of considerations, no significant differences are found

Further, consideration prior to purchase decision for a mobile service

provider has been studied in the following figure 5.10.
224
Figure 5.10: Considerations Prior to Purchase Decision for a Mobile
Service Provider
4.5
Mean Scores
3.5
2.5
11
13
15
17
1
The above figure 5.10 explains the significant mean scores for the option
of selection of mobile service provider. Following are the results of various
parameters.
• The first consideration is brand image and network connectivity where

Tata Indicom has the maximum mean score as compared to Reliance.
For coverage Tata Indicom has significant value as compared to Airtel.
• For network connectivity, Hutch and Tata Indicom have significant mean
scores as compare to Airtel and Reliance.
• For coverage, Hutch, Reliance and Tata Indicom have maximum values
of mean as compare to Airtel.
• For call tariff, Tata Indicom has significant maximum mean value and
Reliance being the minimum one.
• For service quality and reliability parameter, Tata Indicom has the
significant mean value as compare to the minimum value of Airtel.
• For Advertisement and sales promotion, Reliance and Tata Indicom has
maximum mean values as compared to Airtel.
225
• For value added services, ease of availability and recharge facility. Tata
Indicom, Hutch and Reliance have significant mean values as compare to
Airtel.
• For customer care services, Tata Indicom has maximum mean values as
compare to Airtel.
• For roaming facility, Reliance has significant mean score as compare to

other operators.
• For rebate and discount, Tata Indicom has the maximum mean score and
Airtel has the least one.
• For voice and clarity, there are significant differences between mean
scores of Tata Indicom being maximum and Airtel as the least ones.
• For transparency in billing, Hutch has significant mean score followed by

Reliance, Tata Indicom and Airtel.
• For dealer services, Reliance and Hutch has higher mean values in
relation to Airtel.
• For word of mouth, Reliance has significant mean score as compare to

other operators.
• For friend’s advice, Hutch has highest mean score as compare to Airtel
being the minimum one.
Table 5.132: Evaluation of Awareness of Company’s Offices

Awareness of Yes 82 64 89 78 313
Company Offices 0.001**
No 3 27 14 44
Chi-square = 44.645, **Significant at .01 level.
The above table 5.132 indicates that there are significant differences.
relating to information about awareness of company’s offices between those who
agree and who do not agree amongst selected four cities is significant at 99%
level.
226
Table 5.133: Response About Service Providers’ Touch Points
S. Prepaid/ Std.
Statements N Mean t p-value
Ambience of the company Prepaid 102 3.42 0.87
1 1.441 0.15
outlet Postpaid 211 3.56 0.79
Availability of Literatures/ Prepaid 103 3.39 1.02
2 0.797 0.426
Brochures Postpaid 222 3.48 0.9
Inter-personal skills of the Prepaid 106 3.63 1.01
3 0.68 0.497
Executive at company outlet Postpaid 227 3.56 0.86
Handling Product related Prepaid 105 3.59 1.02
4 0.386 0.7
Queries Postpaid 229 3.63 0.9
Complaint Handling at Prepaid 109 3.7 0.97
5 0.522 0.602
company outlet Postpaid 236 3.64 0.94
Overall Rating of company Prepaid 106 3.58 0.98
6 0.05 0.961
outlet Postpaid 235 3.57 0.88
Table 5.133 explains the results of response about service providers’

touch points. It can be evaluated from various aspects covering-ambience,
availability of literature, inter-personal skills, handling of product queries and
complaint handling. No significant differences are found between the users of
both prepaid and postpaid subscribers.
Further, for each operator the differences between mean scores for
response about service providers’ touch points are explained in the following
figure 5.11.
Figure 5.11: Evaluation of Service Providers’ Touch Points
4.5
4
Mean Scores
3.5
2.5
2
1 2 3 4 5 6
227
The above figure 5.11 explains the evaluation of service providers’ touch
points for individual operator.
Reliance has been assigned significant mean scores and Airtel the
minimum one for ambience of company outlet, availability of literature/brochures,
inter-personals bills of the executive at company outlet, handling product related
queries, complaints handling at company outlet. For overall rating of company
outlet, Reliance and Hutch are followed by Tata Indicom and Airtel.
Table 5.134: Evaluation of Customer Care Services
S. Std.
Statements A2.2 N Mean T p-value
No. Deviation
1 Easily Accessible Prepaid 122 3.49 1.16
1.593 0.112
Postpaid 261 3.68 1.02
2 Humble and Soft Prepaid 122 3.71 0.99
Spoken 0.902 0.368
Postpaid 261 3.81 1.01
3 Ability for Complete Prepaid 121 3.51 1.16
1.354 0.177
Resolution Postpaid 261 3.67 1.05
4 Customer Care Prepaid 120 3.5 1.01
Services 1.045 0.297
Postpaid 254 3.61 0.97
The table 5.134 explains the results of customer care services. They are
evaluated on the grounds of easily accessibility, humble and soft- spoken
executive, ability to resolve the problem and customer care services. No
significant differences are found for both prepaid and postpaid services .It
implies that these are equally important for both kinds of subscribers.
Further, for each operator customer care services are studied in the
following figure 5.12.
228
Figure 5.12
Evaluation of Customer Care services for Selected Mobile Service Provider
4
3.9
3.8
3.7
Mean Scores
3.6
3.5
3.4
3.3
3.2
3.1
3
1 2 3 4
The above figure 5.12 explains the significant results with regard to
customer care services regarding the accessibility of the executive Tata Indicom
had maximum mean scores as compared to Airtel. Secondly, in relation to
humble and softness of executive Hutch has maximum mean score as compared
to Airtel. For providing the complete resolution, Hutch has maximum mean score
as compared to other operators.
Table 5.135: Efficient Solution of Query Handling

p-
Yes/No Ludhiana Amritsar Patiala Chandigarh Total
value
Contact for query Yes 98 58 92 60 308
solving <0.001
No 38 4 35 77
Efficient solution of Yes 92 45 91 48 276
query(s)/complaints No <0.001
6 34 2 32 74
Chi-square 1=79.394, Chi-square 2=73.159, ** Significant at .01 level
Table 5.135 explains the results regarding the handling of query solution
and its efficient solutions. The results are highly significant. The above table
explains the highly significant values (<0.001) between ‘yes’ and ‘no’
respondents amongst different selected cities covering Chandigarh, Ludhiana,
Amritsar and Patiala.
229
Table 5.136: Effectiveness of After-Sales Services

Problem faced in Yes 45 48 56 45 194
the handset 0.312
No 51 45 39 50 185
Warranty claimed Yes 31 11 15 18 75
0.001**
No 61 85 77 73 296
Claim settled Yes 25 8 15 16 64
within promised 0.13
time No 2 2 0 0 4
Awareness about Yes 74 66 91 65 296

the Handset <0.001**
Service Centers No 17 31 2 30 80
Visit to the Service Yes 51 34 88 49 222

Centers < 0.001**
No 40 60 5 41 146
Promptness in Yes 36 29 88 41 194
problem solving < 0.001**
No 46 19 2 28 95
**significant at .01 level
The above table 5.136 indicates the highly significant results between the
‘yes ‘respondents and ‘no’ respondents. There are highly significant results for
warranty claimed (0.001), awareness about handset service centers (<0.001),
visit to service centres and promptness in problem-solving (<0.001) amongst
selected cities covering Chandigarh, Ludhiana, Amritsar and Patiala.
Table 5.137: Evaluation of Service Quality

Std.
Services N Mean t p-value
Deviation
Prepaid 108 3.4 0.74
Overall Services 0.899 0.369
Postpaid 243 3.48 0.77
The above table 5.137 explains the results with regard to the evaluation of
overall service quality. The differences are not significant one between the
prepaid and post paid subscriber of selected telecom service providers.
230
Figure 5.13: Evaluation of Service Quality
3.8 3.73
3.7
Mean Scores 3.6

3.44
3.5
3.31 3.33
3.4
3.3
3.2
3.1
The above figure 5.13 explains the overall rating of after sale services of
all the selected four operators. Reliance has maximum mean score (3.73)
followed by Airtel (3.44), Tata Indicom (3.33) and Hutch (3.31). In relation to
evaluation of overall evaluation of service quality, significant differences are not
found between both prepaid and postpaid subscribers.
Table 5.138: Evaluation of Satisfaction Level of Network Quality
Prepaid/ Std.
S. No. Parameters N Mean t p-value
Postpaid Deviation
Prepaid 122 3.57 1 0.592 0.555
1 Tariff / Price / Call rate
Postpaid 258 3.63 0.86
Prepaid 120 3.71 0.89 1.519 0.13
Postpaid 264 3.85 0.7
Prepaid 124 3.8 0.92 1.309 0.192
3 Coverage
Postpaid 260 3.92 0.67
Prepaid 117 3.74 0.76 0.451 0.652
4 Value Added Service
Postpaid 253 3.7 0.68
Prepaid 119 3.47 0.99 1.593 0.112
5 Roaming facility
Postpaid 262 3.64 0.93
Prepaid 117 3.53 0.9 0.129 0.897
6 Transparency I n Billing
Postpaid 251 3.52 0.8
Ease of Availability / Prepaid 116 3.94 0.76 2.26 0.024*
7
Recharge Postpaid 247 3.76 0.7
Prepaid 119 3.39 0.94 1.498 0.135
Postpaid 256 3.54 0.87
231
Prepaid/ Std.
S. No. Parameters N Mean t p-value
Postpaid Deviation
Prepaid 117 3.37 0.85 0.164 0.87
9 Sales Promotion Offers
Postpaid 253 3.38 0.88
Prepaid 120 3.3 0.98 0.07 0.944
10 Advertisement
Postpaid 257 3.31 0.94
Prepaid 120 3.52 1.02 0.959 0.339
11 Voice Clarity
Postpaid 257 3.62 0.82
Prepaid 118 3.47 0.87 0.598 0.55
12 Dealer Network
Postpaid 245 3.53 0.82
Prepaid 93 3.75 0.76 0.829 0.408
13 Overall Satisfaction Level
Postpaid 191 3.83 0.6
Prepaid 121 2.88 1.03 4.011 0.001**
14 Continuation of Services
Postpaid 256 2.48 0.84
* significant at .01 level
**Significant at .05 level
In the above table 5.138, the satisfaction level of network quality has been
evaluated on the basis of tariff /call rate, network connectivity, coverage, value
added services, roaming facility, transparency in billing, customer care services,
sales promotion, advertisement, voice clarity, dealer network, overall satisfaction
level and continuation of services. Ease of availability and recharge facility
(0.024) has shown significant differences between prepaid (3.94) and postpaid
subscribers (3.76). There are highly significant results for continuation of
services (0.001) between prepaid (2.88) and postpaid (2.48) services.
Figure 5.14: Satisfaction Level of Network Quality
4.5
4
Mean Scores
3.5
2.5
2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
232
The above figure 5.14 explains the significant results for the satisfaction
level of network quality of selected service provider.
• For Tariff/Price/Call rate, Reliance has maximum mean score as compare

to Airtel.
• For network connectivity, Reliance has maximum mean score as compare

to Hutch.
• For coverage, Reliance, Airtel, Hutch have maximum mean score as

compare to Airtel.
• For value added service, Reliance has maximum mean score as compare
to Hutch.
• For roaming facility, transparency in billing and ease of availability /

recharge, Reliance has maximum mean score as compare to Airtel.
• For customer care services, Tata Indicom has significant mean score as
compare to Airtel.
• For sales promotion offers and advertisement, Reliance has maximum

mean score as compare to Hutch.
Table 5.139: Evaluation of Correlation between Pre-Purchase and Post-

Purchase Behaviour
S.No. Factors Correlation

1 Tariff / Price / Call rate .071
2 Network Connectivity .256 (**).
3 Coverage 215 (**)
4 Value Added Service .226 (**)
5 Roaming facility .257(**)
6 Transparency I Billing .099
7 Ease of Availability / Recharge .361(**)
8 Customer Care Services .195(**)
9 Sales Promotion Offers .199(**)
10 Advertisement .207(**)
11 Voice Clarity .342(**)
12 Dealer Network .200(**)
233
The above table 5.139 evaluates correlation between pre-purchase and
post-purchase behaviour of subscribers. Amongst various parameters, there is
high correlation in ease of availability and recharge (.361) factor for pre-purchase
and post-purchase.
5.5 SOCIO DEMOGRAPHIC PROFILE OF SUBSCRIBERS
i) Age
Table 5.140: Age-Wise Composition of Subscribers

Service Provider
Total
Age <18 2 4 0 4 10
AGE Age 18-25 24 32 45 48 149
(in yrs) Age 25-40 55 46 35 24 160
Age 40+ 7 13 19 22 61
Total 88 95 99 98 380
In the above table 5.140 of age-wise composition, significant results are

obtained for different age groups of selected telecom operators. It explains that
maximum number of mobile users are in the category of 18-25 years and 25-40
years as compare to less than 18 years and above 40. Following figure 5.15
explains age-wise composition of prepaid and post paid subscribers.
Figure 5.15: Age-Wise Composition of Prepaid and Postpaid Subscribers
Age wise
110
120 97
100
Frequency
80
52 50 42
60
40 19
2 8
20
0
Age <18 Age 18-25 Age 25-40 Age 40+
Prepaid Postpaid
234
In figure 5.15, for below 18 years category, there are only 2 prepaid
subscribers as compare to 8 postpaid subscribers. Whereas maximum number
of postpaid subscribers are in the age group of 25-40 years.
Table 5.141: Occupation-Wise Composition of Subscribers

Service Provider
Total
Student 3 14 30 33 80
Government.
3 3 0 2 8
Employee
Private
16 22 11 18 67
Occupation employee
Professional 21 7 16 9 53
Self-
26 34 28 26 114
employed
Others 12 12 5 6 35
Total 81 92 90 94 357
The above 5.141 explains the occupational pattern of various subscribers

it points that mobile usage is more prevalent among self-employed
professionals, followed by students, private employees, professionals and
others.
Figure 5.16: Occupation-Wise Composition of Prepaid and Postpaid

Subscribers
Occupation
100
81
80
Frequency
60 53
46
33 33
40 27 24
21 20
20 6 11
2
0
1 2 3 4 5 6
Prepaid Postpaid
235
Whereas the figure 5.16 explains the occupation composition between
prepaid and post paid subscribers. It represents that self-employed are more into
postpaid (81) as compare to prepaid (33), and least number is of government
employee for both postpaid (6) and prepaid (2).
Table 5.142: Gender-Wise Composition of Subscribers

Service Provider
Total
Male 72 79 58 68 277
Gender
Female 16 15 40 27 98
Total 88 94 98 95 375
The above table 5.142 reflects the gender composition of subscribers of

selected telecom providers. The graph for gender comprise more of males (277)
and category lesser females (90). Following figure 5.17 shows the gender-wise
composition of mobile subscribers.
Figure 5.17: Gender-Wise Composition of Prepaid and Postpaid

Subscribers
Genderwise
195
200
Frequency
150
82
59
100 39
50
0
1 2
Male Female
Above figure 5.17 explains that more males are using in both prepaid and
postpaid categories as compare to females.
236
Table 5.143: Education-Wise Composition of Subscribers Amongst
Selected Cities
Service Provider
Total
Metric 3 0 3 3 9
Education
10+2 8 8 27 25 68
Graduate 48 58 45 66 217
Postgraduate 30 25 24 4 83
Total 89 91 99 98 377
Table 5.144: Income-Wise Composition of Subscribers Amongst

Selected Cities
Service Provider
Total
<5000 9 10 18 31 68
Income
5000-10000 20 20 27 13 80
10000-20000 23 30 21 36 110
20000+ 12 20 14 5 51
Total 64 80 80 85 309
The above tables 5.143, 5.144 related to education and income reflect the
significant results of various mobile subscribers. Maximum graduates (217) are
using mobile phone followed by postgraduate (83), 10+2 (68) and metric group
(9). Following figure 5.18 explains income –wise composition of prepaid and post
paid subscribers of mobile usage.
Figure 5.18: Income-Wise Composition of Prepaid and Postpaid
Subscribers
Incomewise
80 75
60 51
Frequency
46
40 35 37
29
22
20 14
0
<5000 5000-10000 10000-20000 20000+
Prepaid Postpaid
237
Whereas in income profile, most of the users are in income group of
10,000-20,000 (110) as compare to other income classes. On the same
direction, the results between prepaid and postpaid subscribers can be seen.
Maximum number of postpaid subscribers are in income group of 10,000 –
20,000 and least in for prepaid (14) in the 20,000 and above income group.
Table 5.145: Experience-Wise Composition of Subscribers Amongst

Selected Cities
Service Provider
Total
<1 year 7 6 11 13 37
Experience
1-2 year 21 24 29 22 96
>2 year 61 63 60 63 247
Total 89 93 100 98 380
The above table 5.145 explains usage of mobile phones experience in

terms number of years. Most number of subscribers are using mobile phones for
more than two years. Following figure 5.19 explains the number of year of
experience of mobile usage.
Figure 5.19: Experience-Wise Composition of Prepaid and Postpaid

Subscribers
Experience
200 170
150
Frequency
100 77
66
50 20 30
17
0
<1 year 1-2 year >2 year
Prepaid Postpaid
The figure 5.19 explains the ratio between prepaid and postpaid
subscribers is almost same for the subscribers with less than one year
238
experience. Most of the subscribers for both prepaid and postpaid category are
falling in the category with experience of more than two years.
Table 5.146: Time-Spent on Mobile-Usage of Subscribers Amongst
Selected Cities
Service Provider
Total
< 10 min 6 19 17 23 65
Time
10-20 min 21 21 11 24 77
>20 min 62 54 71 51 238
Total 89 94 99 98 380
The table 5.146 explains the time spent on usage of mobile during the
day. Most of the subscribers (238) are using mobile phones for more than 20
minutes. Around 65 customers are spending less than 10 minutes on usage.
Following figure 5.20 explains the time spent on for mobile usage single call
duration.
Figure 5.20: Time-Spent on Mobile-Usage of Subscribers Amongst

Selected Cities
Time
200
163
150
Frequency
100 75
53
41
50 24 24
0
< 10 min 10-20 min >20 min
Prepaid Postpaid
The figure 5.20 explains the proportion of prepaid and postpaid

subscribers for time spent for one call. In all the three categories, postpaid
subscribers are more using the mobile phones as compare to prepaid
239
subscribers. In more than 20 minutes categories, 163 postpaid subscribers are
using mobile phones as compare to 75 prepaid subscribers.
Table 5.147: Place-Wise Mobile-Usage of Subscribers Amongst

Selected Cities
Service Provider
Total
Yes 60 66 84 94 304
Domestic
No 29 27 16 4 76
National Yes 62 58 43 32 195
No 27 35 57 66 185
International Yes 11 6 8 10 35
No 78 87 91 88 344
The above table 5.147 explains the results with regard to places where
calls are generally made. 75% of the respondents use mobile phones for making
local calls. 195 subscribers use mobile phones for making national calls and
around 10% are using mobile phones for making international calls.
(PART-B)
RESEARCH FINDING OF THE DATA COLLECTED FROM DEALERS
5.6 RELIABILITY OF DATA COLLECTED FROM DEALERS

Reliability Coefficients
Number of Cases = 22.0 N of Items = 55
Alpha = .8535
Table 5.148: Dealership of Telecom Operators
Operator Yes No
Reliance 16 24
Airtel 37 3
Hutch 12 28
Tata Indicom 23 17
240
Figure 5.21: Dealership of Telecom Operators
40 37
35
30 28
24 23
25
Frequency
20 16 17
15 12
10
5 3
0
Yes No
The above table 5.148 and figure 5.21, explains the results of dealers’
preference for services for various telecom service providers. Out of the total
sample size of 40, most of the dealers (37) preferred the dealership of Airtel as
compare to Tata Indicom (23), Reliance (16) and Hutch (12).
Figure 5.22: Evaluation of Company’s Directions with to Dealers
40 38 39
36
35
31
30 28
Frequency
25 23
21
20 19
17
15 12
10 9
5 4
2 1
0
t
ed
t
e
s
n
t
en
un
e
ic
er
io
rg
er
v
em
th
ct
co
Ta
er
ov
fa
O
is
S
tis
C
tis
s
D
er
le
er
a
Sa
m
Sa
re
dv
to
A
us
C
Yes No
241
Table 5.149: Evaluation of Company’s Directions with to Dealers
Areas Yes No
Sales target 28 12
Customer service 17 23
Discount/Schemes 19 21
Consumer Satisfaction 9 31
Areas to be covered 2 38
Advertisement Planning 4 36
Any other (specify ) 1 39
In the above figure 5.22 and table 5.149, various areas in which dealer’s
get directions from companies have been explained. Most of the telecom service
providers are focused on sales target (28), discount and schemes (19),customer
services (17). Lesser weightage is given to other areas like consumer
satisfaction (9), areas to be covered (2), advertisement planning (4).
Figure 5.23: Dealers’ Participation in Marketing Decisions
15
16
14
11
12 10
10
Frequency
8
6
4
2
0
Regularly Sometimes Occasionally
242
The above figure 5.23 explains dealers’ participation in marketing
decision. Most of the dealers (15) agreed that they participate in marketing
decisions sometimes followed by occasionally (1) and regularly (10).
Table 5.150: Evaluation of Dealers

Channel Channel Channel Channel Quality of Technical
Operators
Margins Penetration Delivery Support Product support
Airtel 16 20 13 16 19 22
Hutch 10 5 8 5 4 2
Reliance 9 8 8 8 8 6
Tata Indicom 5 7 11 11 9 10
Above table 5.150 explain results with regard to evaluation of dealers for
best channel margins and best channel penetration. For best channel margins
and best channel penetration, Airtel and Hutch are preferred telecom service
providers as compare to Reliance and Tata Indicom. In context of best channel
delivery and best channel support, Airtel and Tata Indicom have shown
significant results as compare to Hutch and Reliance. For best quality of the
product results are more significant for Airtel, Tata Indicom and Reliance as
compare to Hutch.
Table 5.151: Evaluation of Company’s Product Attributes
Product Product Product Low Dealers’ Premium Customer

Attributes Advertisement
Features Quality Range Price Influence Price Service
Product
Features 1 .887(**) .544(**) .675(**) .467(*) 0.077 .519(**) .595(**)
Product
Quality 1 .635(**) .503(**) 0.378 0.106 .519(**) 0.378
Product
Range 1 0.239 0.296 -0.059 .396(*) 0.144
Low
Price 1 .693(**) 0.125 0.324 0.376
Advertisement 1 0.12 0.295 0.091
Dealers’
Influence 1 0.13 0.315
Premium Price
1 .487(*)
Customer
Service 1
243
The above table 5.151 explains various product attributes and their
correlation. There is highly significant correlation between Product features and
product quality, product range and product features, low price and product
features, premium price and product features and customer service and product
features. Results are highly significant for product quality and product range, low
price and product quality, premium price and product quality and low price and
advertisement. Correlations are significant for advertisement and product
features, product range and premium price and for premium price and customer
service.
Figure 5.24: Customer Feedback and After Sale Service
18
17
18
16 14
13
14
12
Frequency
10
8
6
4
2
0
Yes No
After Sale Service Forward of Feedback
The above figure 5.24 explains dealer’s opinion that feedback from the
customer after the sale of product is important one and most of them agree that
this feedback is forwarded to company.
244
Figure 5.25: Effectiveness of Product Strategy
40
40
35 33 34
30 27
25
25
Frequency
20
15
15 13
10 7 6
5
0
0
Quality Range Features Brand Any
Image Other
Yes No
.
The above figure 5.25 explains various aspects of product strategy in the
current market scenario. Quality of the product (25) has significant role to play as
compare to any other aspect for product strategy.
Figure 5.26: Effectiveness of Price Strategy
40
40 37
35
35
30 26
Frequency
25
20
15 14
10
5
5 3
0
0
Price Cuts Cost Cuts Payment Any Other
Terms
Yes No
In figure 5.26 various aspects of price strategy are taken into account.
Price cuts (26) play most significant role of price strategy as compare to cost
cuts (5), payment and credit terms (3).
245
Table 5.152: Evaluation of Promotional Strategy
Yes No
Advertisements 14 26
Discounts and schemes 14 26
Dealer incentives 14 26
Any other 0 40
For promotional strategy, advertisement, discounts and dealer incentives

have equal role to play.
Figure 5.27: Compensation and Seller Support
40 38
35
31
30
25 25
Frequency
25 24 23
20 2020
16 17
15 15 15
10 9
5 2
0
e
ty
n
ity
t
t
s
en
di
c
er
gi
ui
an
iv
re
ar
th
m
tin
us
C
w
op
M
O
on
llo
cl
el
Ex
A
ev
D
Yes No
.
The above graph explains the dealer’s response for the satisfaction of
compensation the company for seller support. Various parameters for dealers’
satisfaction studied are gross margin and overhead contribution, Promotional
allowance and below-the line benefits, Distribution Exclusivity, Continuity of
Supply, Market Development and credit. Continuity of supply (20) distribution
exclusively (15), promotional allowance (17), gross margins (16) and market
developments have more significance as compare to credit and other support
aspects.
246
(PART C)
ANALYSIS OF DATA COLLECTED FROM SELECTED TELECOM

SERVICE PROVIDERS.
5.7 RELIABILITY FOR TELECOM SERVICE PROVIDERS

Reliability Coefficients
N of Cases = 40.0 N of Items = 41
Alpha = .7250
The data for telecom service providers has been collected from the
executives at the touch points, officials dealing with customers care service.
Data was collected from the head office, web world offices and touch points.
Figure 5.28: Telecom Service Providers’ Collaboration
4%
24%
44%
28%
The above figure 5.28 explains telecom service provider’s foreign

collaboration in terms of both technical and foreign support. Hutch has shown
significant results (44%), followed by Airtel (28%), Reliance (24%) and Tata
Indicom (4%).
Further, significant results of the kind of services provided by telecom

service provider with regard to mobile are obtained.
247
i) Voice mail service: Call waiting, call hold, call divert, call line identification
and presentation, international SMS, Net connect and call identification
and restriction. The results are almost same for each operator as each of
them is providing this service.
ii) 3 way call conferencing: Reliance has significant results as compare to

Airtel.
Figure 5.29: Telecom Service Provider and Call Line

Identification Services
27%
31%
9%
33%
iii) Call line identification and Restriction: Figure explains that Tata Indicom
has significant value (33%) as compare to Hutch (9%) amongst all
operators.
Table 5.153: Functional Domain of Products and Services

Telecom Service
Banking Manufacturing Insurance Health Retail Individuals
Operators
Reliance 9 9 11 9 12 14
Airtel 0 13 0 0 0 15
Hutch 3 3 3 3 3 13
Tata Indicom 0 0 0 0 0 13
With regard to functional domain of products and services, individuals are

most covered for the mobile phones. It is followed by manufacturing and other
sectors.
248
Table 5.154: Export of Services
Telecom Service Operators Yes No Total
Reliance 7 5 12
Airtel 0 14 14
Hutch 0 15 15
Tata Indicom 2 9 11
Total 9 43 52
Table 5.155: Localisation of Products and Services
Telecom Service Operators Yes No Total

Reliance 6 0 6
Airtel 5 9 14
Hutch 13 0 13
Tata Indicom 0 4 4
Total 24 13 37
The above tables 5.154 and 5.155 explain the exporter services and
localization aspect of products and services according to Indian conditions. None
of the telecom service operator is into major export of services. Whereas for
localization of products and services, Hutch and Reliance have significant results
as compare to Airtel and Tata Indicom.
Table 5.156: Promotional Activities
Print Discounts Seminars/ Market Personal

Television Internet Survey
Ads Exhibitions Selling
Reliance 15 11 15 14 9 9 11
Airtel 6 6 6 0 0 0 0
Hutch 13 12 11 7 8 9 6
Tata 14
14 14 14 14 14 14
Indicom
Total 48 43 46 35 31 32 31
In the above table, various promotional activities of selected telecom

service providers are discussed.
249
• With regard to television as medium of advertisement Reliance and Hutch
have significant results followed by Tata Indicom and Airtel.
• With relation to internet advertisement as promotional activity, Tata

Indicom and Hutch have shown significant results.
• For the print ads, Reliance and Tata Indicom have shown maximum
values.
• For customer incentives/discounts, Reliance and Tata Indicom have

significant values as compare to Hutch and Airtel.
• For seminar and exhibitions and personal selling as promotional activity,

Tata Indicom and Reliance have significant values.
• For market survey and research, Tata Indicom, Reliance and Hutch are
with the maximum values.
Table 5.157: Effectiveness of Marketing Channels and

Distribution Networks
Association Dealer/
Telecom Service Direct Company
Internet with other distributor
Operators Marketing Outlets
companies
Reliance 6 12 0 0 9
Airtel 6 4 0 0 12
Hutch 7 7 6 2 7
Tata Indicom 8 3 0 0 7
In table 5.157 the marketing channels and distribution networks have

shown significant results. Reliance, Airtel and Hutch have significant values as
compare to Tata Indicom.
Table 5.158: Evaluation of Pre and After-Sale Services

Telecom Service No
Yes Total
Operators
Reliance 14 1 15
Airtel 7 8 15
Hutch 13 2 15
Tata Indicom 15 0 15
250
The table 5.158 explains results for pre and post sales services. Reliance,
Tata Indicom and Hutch have significant values as compare to Airtel for pre and
post sales services.
Table 5.159: Availability of After-Sale Service Station

Telecom Service Operator Yes No
Reliance 14 1
Airtel 6 9
Hutch 12 3
Tata Indicom 10 5
The table 5.159 shows the results for the availability of after sales service
stations. Reliance, Tata Indicom and Hutch have shown significant results as
compare to Airtel.
Table 5.160: Fixation of After-Sale Charges

Reliance 8 7
Airtel 9 6
Hutch 10 5
Tata Indicom 14 1
Total 32 9
The above table 5.160 indicates the results for the allocation amount for
after-sales service charges. Tata Indicom is investing significant amounts for
providing after sales service as:
• Tata Indicom and Hutch use mailing as medium of feedback to the

maximum as compare to other telecom service providers.
• Visits by company sales executive are used as medium of feedback by

Tata Indicom and Hutch.
Tata Indicom, Reliance and Hutch are using internet as medium for
feedback to the maximum s compare to Airtel.
251
Table 5.161: Customer Care and After-Sale Services
Telecom Service Total
Yes No
Operator
Reliance 10 5 15
Airtel 6 9 15
Hutch 13 2 15
Tata Indicom 15 0 15
The table 5.161 explains the role of service stations in terms of customer
service and customer relations. Hutch and Tata Indicom have shown significant
results for customer care services as compare to other operators.
Table 5.162: Maintenance of Customer Database

Reliance 14 1
Airtel 6 9
Hutch 13 2
Tata Indicom 15 0
The above table 5.162 explains results with regard to maintenance of

customer database. Tata Indicom, Reliance and Hutch have shown significant
results as compare to Airtel.
Table 5.163: Customer Feedback After Sale Service

Reliance 10 5
Airtel 5 10
Hutch 13 2
Tata Indicom 15 0
The table 5.163 explains the company’s policy of customer feedback after
the sale of the services. Hutch and Tata Indicom take regularly feedback from
customers after sales service of the mobile services as compare to other
operators.
252
Table 5.164: Feedback Channels of Telecom Service Providers
Telephonic calls Mails Visits by executive Websites

Reliance 12 4 4 10
Airtel 6 0 0 0
Hutch 15 9 12 10
Tata Indicom 15 14 15 14
The table 5.164 indicates significant results with regard to feedback

channels.
• Telephone calls is significant for feedback channel by Tata Indicom,
Reliance and Hutch to Tata Indicom for Direct Marketing to end-user.
• Reliance and Hutch have maximum values for distribution through
national and international offices.
• Reliance and Hutch have shown significant results for dealership network.
Table 5.165: Usage of Indian Technology vis-à-vis Foreign Technology
Telecom Service Operator Purely Indian Foreign and Indian both

Reliance 2 10
Airtel 6 9
Hutch 4 11
Tata Indicom 0 15
The table 5.165 indicates the results of usage of Indian technology vis-à-
vis foreign technology. Significant results are shown for Reliance, Hutch and
Tata Indicom. These telecom service operators employing both foreign and
Indian technology.
253
Figure 5.30: Methods of marketing of products
16 15
14 13
12
12
10
Frequency 10
8
6 5
4 3
2
2
0
0
Yes No
The figure 5.30 reflects the various methods of marketing of products. The
results that Tata Indicom, Hutch and Reliance use sales personnel as medium of
marketing in relation to other sources.
Table 5.166: Company’s Policy with regard to Training Programme
Telecom Service Sales Techniques and Products

Products &Policies
Operator Information
Reliance 15 0
Airtel 15 0
Hutch 11 2
Tata Indicom 15 0
This table 5.166 evaluates companies’ policies with regard to training

programme. Telecom Service providers are imparting training for products and
policies, sales techniques and product information. All the four selected telecom
operators are focusing on products and policies as compare to sales technique
and product information. These selected telecom service operators impart
training for 7 days.
254
Table 5.167: Areas of Marketing Strategy
Telecom Service Promotional Distribution Customer

Product Price Network
Operator Activities Service
Reliance 1 2 5 1 13
Airtel 0 0 0 0 6
Hutch 7 11 3 10 6
Tata Indicom 1 14 1 0 0
Table 5.167 explains the areas of improvement for marketing strategy.

Telecom service provider can work in the areas of product, price, promotional
activities, distribution network and customer service. It is clear from above table
that companies should focus more on customer service and price as compare to
other areas.
5.8 IMPACT OF TRUST AND COMMITMENT IN TELECOM SECTOR
This research tests the impact of key antecedent factors, which influence
consumer trust in mobile usage of various telecom service providers, which in
turn affects relationship commitment. The model results and hypothesis tests are
furnished below.
Some of the key findings from the data analysis are highlighted below:
• Trust has a significant positive influence on relationship commitment.

Thus, H1 is established.
• Shared value has a significant positive impact in developing relationship

commitment. Thus H2 is established.
• Opportunistic behaviour is most important determinant of trust and has a

significant positive relationship with trust. Thus, H3 is established. Within
opportunistic behaviour, information asymmetry and regulatory control are
the most significant variables.
• Communication plays a significant positive role on trust. Thus, H4 is

established. Speed of response is most critical to communication.
255
• Opportunistic behavior tends to have a critical impact on trust. Thus, H5 is
established. Regulatory control and information asymmetry plays a
significant role in controlling opportunistic behavior.
• Reputation is a critical component of trust and is most affected by the

antecedents.
• Commitment can be improved by prolonged interaction and intense

association between the telecom service provider and the customer.
• Trust and commitment play significant role from dealers’ as well as

telecom service providers’ perspective.
The primary objective of this research is to explore the impact of trust of

telecom service providers through an antecedent-consequences approach. The
research confirms that trust significantly affects customers’ commitment.
256
CHAPTER – 6
SUMMARY, SUGGESTIONS AND RECOMMENDATIONS
6.1 INTRODUCTION
The summary, managerial implications conclusions of the study and

directions for future research are presented in this chapter. Section 6.2 covers
the need and significance of the study. Section 6.3 covers research objectives of
the study. Section 6.4 contains research methodology and section 6.5 explains
the summary of the findings. Section 6.6 covers discussions of results of the
study and section 6.7 covers the managerial implications. Section 6.8 covers the
limitations of the study and section 6.9 explains scope for further research.
6.2 NEED AND SIGNIFICANCE OF STUDY
It is well perceived fact that customer trust and commitment have become
the important factors of business success. However many conclusions have
been drawn with regard to trust and commitment. But there are very few studies
related with trust and commitment in telecom sector with special reference to
India. The relevance of Trust and Commitment Theory for mobile users of Indian
Telecom Sector has yet to be established.
This research is grounded in the well-known commitment-trust theory of

relationship marketing, originally proposed by Morgan and Hunt (1994). Morgan
and Hunt showed that relationship marketing as the act of establishing,
developing, and maintaining successful relational exchanges. It constitutes a
major shift in marketing theory and practice. According to the theory (Morgan
and Hunt, 1994), trust is central to successful relationship marketing, because it
encourages marketers to:
• Work at preserving relationship investments by co-operating with

exchange partners;
• Resist attractive short-term alternatives in favour of the expected long-

term benefits; and
257
Trust, according to Speakman (1988) is so important to relational

exchange that it is “the cornerstone of the strategic partnership” between the
seller and the buyer.
This research attempts to test an adaptation of the commitment-trust

theory of relationship marketing in the telecommunication context. Although the
main variables were mostly borrowed from the commitment-trust framework
(Morgan and Hunt, 1994), the dimensions and the items were adapted
significantly to the context of cellular users of telecom sector. Therefore, one of
the primary contributions of this research is to test the applicability and
extendibility of the commitment-trust theory to the domain of telecom service
providers
In Indian Telecom Sector mobile telephony is called as “sun-rise industry.

It is one of the growing industries in the country rapid growing with rate of
subscriber base teledensity and traffic. Indian telecom sector holds huge
potential for growth because of following reasons.
• Liberalisation and privatization has brought around 12 majors in both

GSM and CDMA sectors. With intense competition, companies try to woo
and retain customers for longer period of time. For which, trust and
commitment are key variables to maximize the average revenue per user.
• Impact of technology
• Impact of FDI flows
• Trust and commitment model given by Morgan and Hunt comprises

various key dimensions-shared value, communication, and opportunistic
behaviour. How these variables affect trust and commitment among
mobile users of Indian telecom sectors has further to be studied.
• Companies are spending heavily on acquisition and retention of both pre

paid and post-paid subscribers. To what extent, different telecom services
258
providers are able to build trust with both pre-paid and post-paid require
further analysis.
6.3 RESEARCH OBJECTIVES OF THE STUDY
The study has following research objectives :
1. To study the rapid growth of Indian telecom sector.
2. To explore the impact of key dimensions of trust and commitment for

mobile services in the telecom sector.
3. To study the relationship between trust and commitment in both pre-paid

and post-paid services in selected telecom companies.
4. To analyse the level of trust and commitment in selected telecom service

providers across Punjab and Chandigarh.
5. To suggest managerial implications to Indian Telecom Industry to build

trust and commitment.
6.4 RESEARCH METHODOLOGY
This research has selected four telecom service providers --- Reliance
Communications, Airtel, Hutch and Tata Indicom from four cities covering
Ludhiana, Amritsar, Patiala and Chandigarh. It is based on selected sample of
pre-paid and post-paid subscribers, dealers and telecom service providers. This
research adopts combination of primary and secondary source of information.
This study is based on primary and secondary data. The main sources of
secondary data are published reports of World Telecommunications
Development, Department of Telecommunications, Indian Telecom Policy, Year
book of Statistics, Journals, Books and various websites of the mobile operators.
The primary data is collected through the questionnaire and personal Interviews.
4 major telecom operators are selected: Reliance Infocomm, Airtel, Tata
Telecom and Hutch. Through a systematic random sampling, a sample 400
respondents are selected for administering questionnaire at the touch-points of
these selected telecom operators in the selected towns. Besides this, a sample
259
of 60 questionnaires is collected from employees and of 40 from the dealers of
selected telecom operators.
The data collected will be analysed using various statistical tools. The
basic framework of the model consisted of unobservable theoretical constructs,
which would not be measured directly. So, this study used a set of indicator
variables, which measured the unobservable constructs.
To tackle the problem of measuring the latent variables, usually two

strategies are followed. The first is selection of a single indicator variable for
each theoretical construct. However, in most cases, it is unrealistic to assume
that a single indictor variable provide a reliable measure of the latent variables.
The second method is to assign pre- determined weights to different indictor
variables. However, both these methods are prone to error. Dillon and Goldstein
(1984), showed that when such measures are used in linear models, the
coefficients would have an unknown bias.
Tests for significance are less useful in small samples (less than 30) and
quite sensitive in large samples (exceeding 1,000 observations) (Hair et al.,
1995). Thus, both graphical and statistical tests are carried out using SPSS
version 10.0 for Windows to assess the actual degree of departure from
normality the mean, standard deviation and reliability estimate of each model
construct.
6.5 SUMMARY OF THE FINDINGS
6.5.1 Growth of Indian Telecom Sector
Indian mobile telephony may be called as “the sun-rise industry” of the

Indian economy because of outstanding performance on various parameters.
• Rate of growth in mobile subscriber base has been substantially higher

than growth in population, indicating a rapid proliferation of mobile
telephone and adoption by non-users/first-time users.
• Teledensity has also gone up which is a reflection of the above

discussion.
260
• From 2000 to 2006, traffic or usage of mobile phones increased, but the
increase was not uniform during the period. Till 2003, mobile usage went
up gradually but year 2004 onwards saw an era of speedy increase in
mobile traffic. It was probably because of the reasons that in initial days of
mobile telephony, call rates were high and the number of services offered
by cellular operators was limited. However 2003 onwards, because of the
slashed prices and add-on-services resulted in sudden increase in traffic.
Private operators have also shown remarkable growth in a highly

competitive environment. The overall growth in the subscriber base of private
operators during 1998-2006 was 78.36 million comprising 7.92 million fixed
subscribers and 70.44 million mobile subscribers. Private operators have
contributed very largely to post 1998 growth primarily in mobile services due to
the obvious cost and fast deployment advantages. Competition, foreign direct
investment and privatization have following implications for Indian Telecom
Industry.
• Lower prices – It has been witnessed across most industries that

competition helped in lowering the prices.
• Increased efficiency – In deregulated industries or license based cost plus

regime there was no incentive to shed inefficient assets and reduce
overheads. The advent of competition forces an industry to eliminate
inefficient and unproductive assets.
• Greater innovation – The deregulation in telecom industry gave birth to

the greatest innovation period in the past 20 years. New technologies,
standards, data services, new devices, CRM solutions and creative
bundling have all been the result of competition in telecom industry.
• Telecom is high technology industry. Telecom equipment is highly

complex to design and needs the expertise of both telecom and
computing fields. With the advent of competition, tremendous innovation
in services was made possible by improving the quality of -technology by
the players.
261
• Telecom industry is services industry, hence the good quality services to
the customer and the customer relationship management is the key and
competition has totally changed the definition of service in Indian telecom
industry. The quality of service has improved by leaps and bounds.
• The transition-trend in the economy that had resulted out of liberalization,

privatization and demonopolisation placed huge capital requirements,
especially for private ventures, which could not be met from domestic
sources alone. Hence, foreign investors were invited to take part in
contributing to the capital requirements of the telecom companies.
• As per the FDI policy for the Telecom Sector, investment up to 49% is
permitted in Basic, Cellular and other value added services, which is
hiked to 74% in 2003-04 budget; upto 74% is permitted in Internet,
infrastructure and radio paging services and up to 100% is permitted in
manufacturing, Internet service, voice and electronic mail, based on
certain conditions for fulfilment as a part of licensing and security
requirements, laid down by the Department of Telecommunications,
• The private participation was initially witnessed only in the cellular

segment. Here also, they had a very limited role to play, since it took a
very long time to penetrate the market, due to very high instrument costs,
tariff and licensing regulations and very high infrastructure costs. The total
number of telephone lines provided by private players, which was
restricted only to cellular phones, was 0.88 million in March 1998. But the
scenario changed totally with the announcement of the NTP in 1999,
which had broadened the scope for private players.
• Today, private players contribute to 64% of the total telecom network of

the country, with a major contribution in the cellular segment. Out of the
62 million phones provided in the country for the period 2005-06, 50
million phones provided by private players alone.
262
• The role of private sector in the Indian Telecom Industry is expected to
increase at a higher rate in the years to come due to high existing
potential for cellular growth in urban and rural India. Year 2003 onwards, it
has witnessed a dramatic increase in the number of mobile user in India.
It was, largely propelled by decreasing tariffs and entry cost and
increasing coverage. Every month, around 2 million mobile wireless
customers were added, translating into a monthly tele-density increase of
0.2%.
6.5.2 Trust and Commitment as Key Mediating Variable
The concept of trust has been explained as when one party has
confidence in an exchange partner’s reliability and integrity. There are three
dimensions of trust: perceived risk, technology orientation and reputation.
Shared value has been treated as a multi-dimensional construct. In the
telecommunication context, shared value symbolises the extent to which the
company and the customers share common beliefs on critical values like ethics,
security, and privacy. Communication, especially timely communication fosters
trust by assisting in resolving disputes and ambiguities, and aligning perceptions
and expectations. The multi-dimensional constructs that constitute
communication are openness, speed of response, and quality of information.
Opportunistic behaviour concerns the integrity of the telecom service

providers and adherence to expected roles and obligations. It depends on the
extent of regulatory control and information asymmetry. Relationship
commitment is an enduring desire to maintain a valued relationship. It is a critical
complement of trust in exchange relationships. Trust influences relationship
commitment. The dimensions of commitment are the degree of association,
length of association and sense of belongingness. This research labels trust and
commitment as key mediating variables of relationship marketing which focuses
on one party in the relational exchange and that party’s relationship commitment
and trust. Therefore, when both commitment and trust-not just one or the other-
are present, they produce outcomes that promote efficiency, productivity and
263
effectiveness. In short, commitment and trust lead directly to co-operative
behaviour that is conductive in relationship success.
6.5.3 Impact of Trust and Commitment in Indian Telecom Sector
This research tests the impact of key antecedent factors, which influence
consumer trust in mobile usage of various telecom service providers, which in
turn affects relationship commitment. The model results and hypothesis tests are
furnished below.
Some of the key findings from the data analysis are highlighted below:
• Trust has a significant positive influence on relationship commitment.

Thus, H1 is established.
• Shared value has a significant positive impact in developing relationship

commitment. Thus H2 is established. Shared value is influenced by
privacy, security and ethics. For both pre-paid and post-pad subscribers
security is more significant as compare to security and ethics.
• Opportunistic behaviour is most important determinant of trust and has a

significant relationship with trust. Thus, H3 is established. Within
opportunistic behaviour, information asymmetry and regulatory control are
the significant variables. For both pre-paid and postpaid subscribers
regulatory control is more significant as compare to information
asymmetry.
• Communication plays a significant positive role on trust. Thus, H4 is

established. Openness is most critical to communication as compare to
quality of information and speed of response.
• Opportunistic behavior tends to have a critical impact on trust. Thus, H5 is

established. Regulatory control and information asymmetry plays a
significant role in controlling opportunistic behavior.
• Technology orientation is a critical component of trust and is most

affected by the antecedents.
264
• Commitment can be improved by prolonged interaction and intense
association between the telecom service provider and the customer.
The primary objective of this research is to explore the impact of trust of

telecom service providers through an antecedent-consequences approach. The
research confirms that trust significantly affects customers’ commitment.
6.6 DISCUSSIONS OF THE FINDINGS
Some discussions on the key antecedents and consequences are

presented below:
• To reach out to new consumers in rural and remote areas, the sharing of
infrastructure must be encouraged by the government. It would, indeed,
be wasteful for every operator to duplicate costly infrastructure.
Infrastructure sharing on fair, transparent and commercial terms will
ensure that consumers in rural areas get choice of service, quality as well
as affordability. While the nation achieves aggressive rollout and
improved tele-density, the operators get an attractive commercial
proposition and an opportunity to expand the coverage and reach of their
services.
• In essence only 34.5 million mobile customers are active in the mobile
industry. The challenges for the industry to make the balance 10 million
customers also actively use their mobile, connection, which is not easy,
considering that several of these customers have shifted to another
mobile connection during the grace period, due to better scenes/tariffs.
However, thorough concerted efforts, at least a third of the 10 million
customers can be brought back to the active and paying customers list. In
the post-paid category, “Zero” usage billing customers (only rental paid)
exist to the extent of 5% of the total base, thus adding limited revenue to
operators.
• The new mobile companies, especially the CDMA operators, have learnt
a bitter lesson from this experience and tightened the controls from
January 2004. Tighter control over documentation, customer profile
265
verification, payment capacity and transferring most of the customers to
the pre-paid segment have reduced the possibility of “junk” customers
coming in to the network.
• All the activities are focused on tariff charges, launch of value added
services to enhance usage and revenue, increase or decrease of various
charges/tariff, instead of working towards market expansion. The next
revolution in the mobile industry can happen only when the telecom
companies work towards market expansion rather than price/tariff
changes. However, in the pursuit to beat each other, the focus of each
operator is only on price/tariff changes instead of working collectively to
acquire more new customers, who are confused due to the constant
changes and delay in entry.
• Markets like Gujarat and Punjab have expanded dramatically due to the
expansion of the distribution network of the handset vendors. In spite of
distribution, the handset vendors are still not offering them at an
affordable price for the Indian population. The prices are still high vis-à-vis
the affordability index of Indians and hence the growth is limited. If the
handset prices cannot be reduced further, the vendors should at least
work towards marketing second-hand handsets in order to attract a large
number of small town customers. Second-hand sets sold by reputed
handset vendors will certainly guarantee the quality of the product.
• In Punjab, the total mobile population has crossed 8.21 million by October
2006 for a population of just 34.35 million. Most states, which are
industrially advanced are at just 6% mobile penetration, clearly illustrating
the lead achieved by Punjab. Today; the mobile network covers every
urban town and most of the rural villages and all highways in Punjab,
which has enabled the state's economy to grow substantially. The
aggressive "marketing of the services by operators has ensured that most
of the youth, executives and families in Punjab own a mobile.
• The research reveals that shared value is the significant determinant of

trust. Shared value also leads to increased commitment from the
266
customer. The customer looks for a better association with the telecom
service provider it is dealing with. Shared value enhances the feeling of
association, developing a bonding and nurturing an associative long-term
relationship. This leads to the birth of trust.
• Communication is found to play a relatively secondary influence in

building a customer trust relationship. Speed of response, quality of
information and openness are important.
• Opportunistic behaviour is measured by attributes like distortion of

information and violation of rules and regulations influence users’ trust. It
plays most significant role because of intense competition. Coherence is
required in formulating their strategic intentions so as to minimize their
perceived opportunistic behaviour, and to get a share of the mind of the
customers.
6.7 MANAGERIAL IMPLICATIONS
To grow exponentially above 100 million customers (it is just 10%

penetration nationally against 13% achieved already by Punjab), the service
providers have to specifically target the customer segments and arrive at
aggressive marketing programmes to reach out to them. However, it needs
support in following areas:
• To ensure that every youth has a mobile, service providers have to offer
services like SMS/MMS at low cost/free and ensure that the total mobile
bill for the youth does not cross Rs.300-400 per month, which is the
maximum this segment of customers can afford from their pocket money;
• In the same way, for executives/businessmen, to tap the full potential, it is

essential that services like Closed User Group, National Closed User
Groups, low STD/ISD rates, Fixed cost for Network calling etc., are
offered so that they can lap up the services and go mobile soon.
• To ensure that every household has a mobile connection, it is essential

that the utility of mobile phones is increased through better STD and ISD
267
rates vis-à-vis landline, friends and family offers, special rates to landlines
etc., with easy/low deposit schemes to acquire these facilities.
• To ensure that the penetration targeted in towns and villages is achieved,

service providers have to invest in network expansion and reach out on
priority; to exploit the untapped potential in these markets.
• To expand the network to a large number of towns and villages by all the
operators, network sharing should be allowed by BSNL and the
government has allowed 74% FDI in mobile companies for easy access to
funds.
• Both service providers and handset vendors have to combine their

strengths and address the issue of market expansion on priority and
launch aggressive programmes to make mobile phones affordable and
available to all.
• The construct of trust is important for cellular users of telecom industry.

As such, it has implications for value added services, market
segmentation, and customer retention strategies. Theoretically,
conceptualising and modelling trust in telecom sector help to expand
scholars’ knowledge of interactive consumer behaviour in this emerging
discipline.
• This study also shows that technology orientation is a significant factor of

mobile users’ trust. Therefore, telecom service provider needs to ensure
that it provides the best network quality and value added services.
• The study tests that shared value, and security in particular, is the
important determinant of trust. To earn a higher level of trust in
customers, many steps can be taken by telecom service providers. One
approach would be highlighting shared value and co-operative interaction
with customers, by recognizing the customer’s right to data ownership.
They can introduce some customer-oriented information security model,
which allows the customers to control their personal information. The use
of the security programmes or models will help customers to identify the
268
concern for customer security, to check the telecom service providers’
reliability and to evaluate the company’s trustworthiness.
• Trust is shown to lead to relationship commitment. The degree and length

of association and the sense of belonging between customers and the
telecom service provider are critical. Strong bond of trust with customers
boosts valuable resources for promoting commitment by providing
reviews, hints, tips and advice to customers. Trust is heavily linked to the
development, fostering and maintenance of relationships. Empowering
the customer to perform various other uses also increases commitment.
• Developing the brand and the telecom service providers’ reputation will
also act as assurance to the customers. It implies enhancing, developing
and maintaining customer relationships remain a priority for organisation.
This research reinforces the importance of trust as a key driver to
developing relationship among cellular users of telecom industry.
6.8 LIMITATIONS OF THE STUDY
Like any other study, this one is also not without limitations. Since the
scope of the study was limited to four major cities only. This study can be
replicated in other cities of Indian, in other industries or for cross study and
contexts for greater generalisability. Another area can be an analysis of
acquisition costs and overall profitability of the customers with strong trust and
commitments.
6.9 DIRECTIONS FOR FUTURE RESEARCH
• How trust and related variables affect the length of the customer/service
provider relationship?
• Feasibility of customer clubs with trust and commitment and trust.
• How the relationship commitment can be improved and what are its
outcomes?
• Implications of trust and commitment in other telecom services –

broadband, internet telephony and many more.
269
6.10 CONCLUSION
As a result of the liberalization, privatisation, and de-monopolisation

initiatives taken by the government of India, the telecom sector is experiencing a
historical growth. The trend is expected to continue in the segment, as prices are
falling as a result of competition in the segment. The beneficiaries of the
competition are the consumers, who are given a wide variety of services. In the
years to come the country is predicted to witness a communication revolution,
which would increase the teledensity to match that of the developed world. The
need of the time is a new revolution in mobile telephony and it is imperative that
service providers work towards the same and make it a reality.
An important contribution of this study is how trust is developed and

sustained over different levels of customer relationship in telecommunication
sector. The future commitment of the customers to organisation depends on
perceived trust. The issue of trust is therefore increasingly recognized as a
critical success factor in the emerging scenario.
270
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“Indian Telecommunication Statistics 2004”, Ministry of Communications,

Indian Infrastructure, Oct. 2005, pg. 26.
292
Indian Infrastructure, Oct. 2005, pg. 41.
Industry Monitor, Telecommunications, May 2006, Pg. 430.
“New Telecom Policy – 1999”, www.trai.gov.in
“Opportunity India – Telecom Industry”, CII Report, 2006.
“Telecom Sector update”, Aug 2004, www.indianfoline.com.
“Telecommunications: Accessibility & Service Performance, Infrastructure”,

CMIE March 2004.
Websites
Bob Thomson (2004), “Successful CRM: Turning Customer Loyalty into

Profitability”, www. Rightnowtechnology.com Oct.
Challapalli Sravanthi (2002), Hutch Says Hi, Catalyst, www.blonnet.com, June 6.
Das Ranjan (2003), Race to the Future: How Indian Telcos Have Made Their
Initial Moves, www.economictimes.com, March 13.
Dhawan Radhika (2002), Hutch the Contrarian Network,

www.businessworldindia.com, November 1, 2004 India Telecom,
www.convergencelus.com, Sep. 4.
Jain Rekha, “Review of Policy Changes in the Indian Telecom Sector”

uniahd.ernt.in
Jayaram Anup (2004), Win-Win for BSNL, www.businessworldindia.com,

February 2.
Kaushik Neha (2002), Idea Cellular Draws Up Strategy, www.blonnet.com, July

11.
“LCT and Millennium Development Goals” (2003), World Telecom Development

Report, www.itu.int
Nair Sanjeev (2003), More freebies while crackers bust, www.domain-b.com,

October 24.
293
Shashidhar Ajita and Srinivasan Sriram (2003), Where Names Don’t Matter,
Catalyst, www.blonnet.com, August 21.
Shymal Ghosh (2003), “The Resurging Telecom Sector”, pib.nic.in, April.
The Renaissance (2004), Coverstory, www.businessworldindia.com, August 23,.
The Year of the Child (2004), www.rediff.com, January 02.
www.adexindia.com
www.airtelworld.com
www.blonnet.com
www.businessworldindia.com
www.domainb.com
www.economictimes.com
www.economywatch.com
www.exchange4media.com
www.hutch.co.in
www.ibef.org
www.ideacellular.com
www.indiantelevision.com
www.relianceinfo.com
www.trai.gov.in
294
ANNEXURE – I
LIST OF SERVICE PROVIDERS
Details of service providers: - The list of all the mobile service providers along with their
licensed service area is as under:
i
ANNEXURE – II
QUESTIONNAIRE FOR SUBSCRIBER
Dear Respondent,
I am conducting research at University Business School, Panjab University, Chandigarh for the study of Trust
and Commitment in Telecom Service Sector for which I intend to pose a questionnaire aimed at checking the
trust level of the subscribers.
Your cooperation is deeply solicitated to provide the relevant information. I assure that information will be kept
confidential.
Name of Subscriber:_______________________
Mobile No._______________________________
Mobile Company__________________________
Address:_________________________________
Please tick at the place that matches your opinion.
A 1. Through which source did you come to know about Mobile Services?
Advertisements (Media)
Friends/Relatives
Company Outlet
Internet
2. Have you subscribed to any other service also (presently/previously)?

Yes No
2.1 If Yes, then which one
Service Provider Age of the Connection

Reliance
Airtel
Hutch
Tata Indicom
(a) Prepaid (b) Post paid

3
Why do you need a Mobile ?
S.No. Statement Strongly Disagree Neutral Agree Strongly

Disagree Agree
1 To stay in touch
2 For Business or Professional Requirement
3 As a status symbol
4 It is advantegeous over Landline
5 It adds to Mobility
6 For services
7 Convenience of calling anytime
8 Makes you easily accessible
ii
4
Which of the following services do you avail of ?
S.No. Name of Services Never Rarely Sometimes Often Always
1 Short Message Services (SMS)
2 Multi Media Message Services (MMS)
3 GPRS / Internet
4 Call Diverting Feature (Call Forwarding / Call

Diverting )
5 Information based services
6 Getting News Update (Sports / Others )
7 For STD calling
8 For Local calling
5. Was the Dealer/Customer Care Executive knowledgeable about the Product?
Yes No
6.
What factors would you consider while opting for a Mobile Service Provider ?

Disagree Agree
1 I would give special consideration to Brand Image
2 Network Connectivity would be an important factor
3 I would give special attention to coverage
4 I would give special consideration to Call tariff
5 Service Quality would be an important factor
6 Reliability would be an important factor
7 I would give special consideration to

advertisement
8 Sales Promotion offers would be an important
factor
9 I would give special consideration to Value Added
Services (SMS , MMS , CLIP)
10 Ease of availability and recharge facility would be

an important factor
11 I would give special consideration to Customer

Care Services
12 Roaming facility would be an important factor
iii
Disagree Agree
13 I would give special consideration to rebate and

discount on calls
14 I would give special consideration to Voice clarity
15 I would give special consideration to transparency

in billing
16 For me dealer services would be an important
consideration
17 For me Word of Mouth would be an important

consideration
18 Advice of friends and relatives influence my

Purchase Decision
B) TOUCH POINTS
7. Are you aware of the Company Offices ?
Yes No
8. Have you visited one?
Yes No
Strongly Disagree Neutral Agree Strongly
Disagree Agree
Ambience of the company outlet
Availability of Literatures/Brochures
Inter-personal skills of the Executive at company

outlet
Handling Product related Queries
Complaint Handling at company outlet
Overall Rating of company outlet
C). Customer Care Services:
Rate the customer care services according to you from 1 to 5, where 5 is extremely good and 1 is extremely
bad.
9 Are the Executive
1 2 3 4 5
a. Easily Accessible
b. Humble and Soft Spoken
c. Able to provide Complete

Resolution
iv
9.1 Rate Overall Customer Care Services
10. Has any Company executive ever Contacted you for solving your query(s)?
Yes No
10.1 If Yes, Do they solve your query(s)/complaints efficiently?
Yes No
D) AFTER SALES SERVICE
11. Have you ever faced any problem in your handset?
Yes No
11.1 If Yes, what type of problem you faced?

Keypad
Internet
Network
Voice
Battery
Any Other (Specify)__________________________
12. Have you ever claimed Warranty?

Yes No
12.1 If Yes, was the claim settled within promised time? Yes/No
12.2 If No, specify (with reasons)________________________
13. Are you aware about the Handset Service Centers?

Yes No
13.1 If Yes, have you visited any of the Service Centers?

Yes No
13.2 If Yes, then was the problem properly taken care of?
Yes No
13.3
How do you perceive your Service Provider
(Using Semantic Scale 1-7 , 1 being the lowest , 7 being the highest )
7 1
RELIABLE UNRELIABLE
POWERFUL WEAK (Brandname )
INNOVATIVE RIGID
TRENDY OLD FASHIONED
ECONOMICAL EXPENSIVE
USER FRIENDLY HOSTILE
v
CUSTOMER FOCUSSED UNCONCERNED
TRANSPARENT NOT TRANSPARENT
PROACTIVE REACTIVE
14. Please, Rate Overall After Sale Services

Extremely Good Moderately Good Good
Bad Worst
E) NETWORK QUALITY
How far are you satisfied with the following factors for your Service Provider
S.No. Factors Very Dissatified Neutral Satisfied Very

Dissatisfied Satisfied
1 Tariff / Price / Call rate
3 Coverage
4 Value Added Service
5 Roaming facility
6 Transparency I Billing
7 Ease of Availability / Recharge
9 Sales Promotion Offers
10 Advertisement
11 Voice Clarity
12 Dealer Network
Overall Satisfaction Level
15. Overall – Are You Satisfied with your mobile phone?

Extremely Satisfied Moderately Satisfied Satisfied
Moderately Dissatisfied Extremely Dissatisfied
If below Satisfied level, Specify Reason(s)?
_________________________________________
_________________________________________
vi
16.
Do you plan to use the same services provider in future ?
(a) Definitely would use

(b) Probably would use
(c) Might Use
(d) Probably would not use
(e) Definitely would not use
17. Any Suggestions or Areas where must improve?

_________________________________________
_________________________________________
F) TRUST AND COMMITMENT LEVEL
G) Rank the following from 1 to 5 where 1 means strongly disagree, 2- moderately disagree, 3-
agree, 4-moderately agree, 5-strongly agree.
1 2 3 4 5
1. I believe that long-term relationship with this company will be profitable.
2. Maintaining a long-term relationship with this company is important to me.
3. I am willing to co-operate and make adjustments from time to time.
4. I am concerned with outcomes in this relationship.
5. I expect this company to continue its operations in the long-run.
6. Relationship between me and my company is very committed one.
7. I am proud to belong in this company.
8. This company has been co-operative with me.
9. This company cares for me.
10. In times of problem, this company’s representative has gone out of way in
help.
11. Company’s representative is like a friend.
12. I trust my company is do-things, which I can’t do myself.
13. I am well aware about the new products and scheme.
14. I frankly share my opinion with company.
vii
15. My complaints are patiently heard and tackled.
16. I get timely information.
17. Information provided to me is upto date.
18. Information given to me is relevant one.
19. I have to remind about my difficulties again.
20. I can approach concerned person easily.
21. Company’s gets feedback from me from time to time.
22. I share information about my mobile services with my friends and

relatives.
23. My mobile company takes into account my requirements.
24. I have got genuine relationship.
25. Other companies could also provide what I get from this company.
26. This company has monopoly for its services.
27. This is one of the few suppliers I could use for this product.
28. No other supplier has equivalent capabilities.
29. My mobile company follows various rules and regulations issued from
time to time.
30. This company changes its policies very quickly.
31. Company shares with me its various products and schemes.
32. Company advertises about its products.
33. I am well informed about the various the new product.
34. I am given with detailed information.
35. Information provided by me is kept secret.
36. This company is honest and transparent.
37. This company has good reputation in the market.
viii
38. I enjoy discussing my mobile services with other people.
39. A feel the ‘part of the family’ of this company.
40. I have little attachment with this company.
41. Under all the circumstances, I will continue to stick to this company’s
mobile services.
42. Company takes into account customers’ benefits while taking decisions.
43. My mobile company understands my problems.
44. I am concerned that the services are not worth the money.
45. The quality of services of this mobile company is consistently high.
46. The services of this company are reliable ones.
47. I cannot always trust upon this mobile company.
48. This company has always met my expectations.
49. I feel sense of belongingness.
50. We–me and company want to carry this relationship for indefinite period.
51. I am the loyal patron of this company.
52. This company’s representative has been open in dealing with me.
53. Promises made by this company are reliable ones.
54. This company’s representative is knowledgeable regarding its products.
55. This company is honest about problems.
56. This company’s claims are not false ones.
57. Company’s representative has problems in answering my questions.
58. This company meets my expectations.
59. This company’s representative displays a sound understanding with me.
60. I plan to subscribe for my mobile in future.
61. I am keen to know the future of the company.
ix
G. CUSTOMER’S PROFILE (kindly tick the suitable box)
19. Age:
<18 18-25 25-40 40 and above
20. Occupation:
Student Professional
Govt. Employee Self-Employed
Pvt. Employee Other (mention)
21. Gender: Male Female
22. Education: Matriculation

Senior Secondary School
Bachelor Degree
Post Graduate Degree
23. Disposable Income

<5000
5000 < 10000
10000 < 20000
20000 and above
24. Experience of Using the Mobile:

Less than 1 year
1-2 years
More than 2 years
25. Time spent on usage of mobile during the day:

Less than 10 minute
10-20 minute
More than 20 minutes
26. Place where generally calls are made:

Domestic
National
International
(Thanks for Co-operation)
x
ANNEXURE – III
QUESTIONNAIRE FOR DEALERS
Dear Respondent,
Satisfaction level of the subscribers.
Your cooperation is deeply solicitated to provide the relevant information as per the contents of the
questionnaire.
Name : _____________________________________
Address : _____________________________________________________
1. Which of the following companies / brands do you cater to?

(Tick whichever is appropriate)
a) Reliance Infocomm
b) Airtel
c) Hutch
d) Tata Indicom
e) Any other _________
2. Kindly rank the following dealer objectives on a scale of 1-5 (1 being the most important and 5
being the least).
a) To enhance the Market/Segment Share
b) To achieve the targeted profit objectives
c) To enhance the consumer brand loyalty
d) Any other specify ________
3. In which of the following areas do you receive directions from the companies?
a) Sales target
b) Customer service
c) Discount/Schemes
d) Consumer Satisfaction
e) Areas to be covered
f) Advertisement Planning
g) Any other (specify) ________
4. Do you take part in Marketing Decision making activity of the company?

If Yes, How often do you take part.
a) Regularly
b) Sometimes
c) Occasionally
5. Which of the companies (names mentioned in Q.No.1) gives the:

a) Best channel margin ________________________
b) Best channel penetration _________________________
c) Best channel delivery speed to customers ________________________
d) Best channel support ________________________
e) Best quality of the product _________________________
f) Best technical support ________________________
6. Which of the following company product attributes appeal most of the customers? Kindly rank
them on a scale of 1-10 (1 for the most appealing and 10 for the least).
a) Product features
b) Product quality
c) Product range
d) Low price
e) Ads on TV/Newspaper
f) Convincing power of dealers
xi
g) Premium price
f) Customer service (presales and after sales)
7. Do you take feedback from the customer after the sale of the product? Yes/No
Do you forward the feedback to the company? Yes/No
8. In how many cases (percentages) do you feel the company takes decisions based on the
feedback received from you? __________________________________
9. In the current market scenario which of the following areas need to be more emphasized and
developed, in order to make a difference in the service sector (Tick whichever attribute is
appropriate).
a) Product Strategy:
Quality
Range
Features
Brand image
Any other (specify) ____________
b) Price Strategy:
Price cuts
Cost cuts
Payment and credit terms
c) Promotion Strategy:
Advertisements
Discounts and schemes
Dealer incentives
d) Distribution Network:
Number of Dealers/distributors
Channel Margins
Channel Support
Channel Delivery speed to the customers
Any other (Specify) ____________
d) Customer Service:
Pre-paid
Post paid
10. Are you satisfied by the kind of compensation received from the company for providing seller
support? Yes/No
a) Gross margin and overhead contribution
b) Promotional allowance and below-the line benefits
c) Distribution Exclusivity
d) Continuity of Supply
e) Market Development
f) Credit
g) Any other (Specify)
(Thank you for your cooperation in this important study)
xii
ANNEXURE – IV
QUESTIONNAIRE (TELECOM SERVICE PROVIDER)
Dear Respondent,
trust level of the subscribers vis-à-vis telecom service provider.
Your cooperation is deeply solicitated to provide the relevant information as per the contents of the
questionnaire. Information provided by you will be confidential.
Name : _____________________________________
Address : _____________________________________________________
Please put a tick mark in the appropriate boxes wherever required.

• Kindly consult the other departments/divisions of the company wherever required.
• Please do not leave any question unanswered.
A) General
1. Name of the Company________________________________________________
2. For how many years has this company been in operation_________________
3. Does the company have any foreign collaboration – Yes/No
If yes, a) what is the percent foreign equity_____________________
b) What is the nature of collaboration – Technical/Financial
B) Product
1. Your company provides: (specify services).
Voice mail service:

Call waiting:
Call hold:
Call divert:
3-way call conferencing:
CLIP (Caller Line Identification Presentation)
CLIR (Call Line Identification Restriction)
International SMS
Net Connect
4. Which functional domain do your products and services address? (Kindly specify the
percentage, in case of more than one domain)
1. Banking __________
2. Manufacturing __________
3. Insurance & Other financial services __________
4. Health Care __________
5. Retail and Distribution __________
6. Others __________
xiii
5. Does the company export any of its services?
Yes/No
If Yes,
a) Specific the services_____________________________________
______________________________________________________
b) What is the proportion of exports vis-à-vis the domestic sale?_____________

______________________________________________________________
6. For Foreign Companies only (Collaboration/Joint Venture / Wholly Owned Subsidiary)
a) Have your product/services been localized according to the Indian Market demands?
Yes/No
b) If Yes, Please specify the measures undertaken

______________________________________________________________
7. For Indian Companies only
a) What are the advantages you enjoy over the foreign companies operating in India?
8. Which of these promotional activities does your company undertake?

a) TV Ads
b) Internet Ads
c) Print Ads
d) Customer Incentives/Discounts
e) Seminars/Exhibitions
f) Market Survey/Research
g) Personal Selling
h) Any other (Specify)
9. Approximate Advertisement Budget (p.a.)
____________________________________________________________________
10. Approximate marketing expense (p.a.)
11. Which of the following marketing channel does your company use to distribute your
products/services? Also kindly mention the approximate revenue earned through each
channel?
Revenue Earned
a) Direct marketing to end user __________________
b) Through your own national and __________________

international offices
c) Through the Internet __________________
d) By forming associations with other __________________

companies
e) End user through Principal __________________
f) Dealer/Distributor __________________
g) Any other (Specify) __________________
xiv
12. Do you believe that pre and after-sales service is important?
Yes/No
13. Does the company have any authorized after-sales service stations?
Yes/No
14. Has the company fixed any specific amount of after-sales service charges?
Yes/No
15. Is the service station given any kind of directions from the company in terms of customer
service and customer relations?
Yes/No
16. Does the company maintain customer database? Yes/No
17. Does the company take feedback from the customer after the sale of the product?
Yes/No
If Yes, feedback is taken-
a) Regularly
b) Sometimes
c) Never
18. Feedback is taken through

a) Telephonic calls
b) Mailing Letters/Questionnaires
c) Visits by company sales executives
d) Websites/Internet
e) Any other (Specify)
19. What kind of manpower technology does the company use:

a) Purely Indian
b) Purely Foreign
c) Foreign and Indian both
d) Any other Specify______________________
20. The marketing of your services is carried out by:

a) Sales Personnel
b) Professionals
c) Internet
d) Any other Specify______________________
If option (a) is correct, then
The sales personnel recruited possess, which of the following qualifications:

a) Diploma in marketing and sales
b) MBA (Marketing)
c) MBA (IT)
d) B.E.
e) Any other Specify______________________
21. What kind of training do you provide to the new Marketing Personnel?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
22. Stipulated training period for new marketing personnel.

_____________________________________________________________________
xv
23. Compensation to the marketing personnel is given in the form of:
a) Fixed Salary
b) Fixed Salary cum commission on sales
c) Only commission on sales and incentives
d) Any other (specify)__________________________
24. Are the Marketing personnel given any refresher training courses? Yes/No
If Yes, then after how much time period___________________________
Please indicate your position in the company (i.e. job title)
Low Average High

How would you rate your own knowledge 1 2 3 4 5 6 7
of your company’s marketing programs,
strategies and policies?
How would rate your own involvement in 1 2 3 4 5 6 7
your company’s marketing programs and
strategies?
How would you rate your own knowledge 1 2 3 4 5 6 7
of your major competitors marketing
programs, strategies and policy?
25. In which of these areas would you like your company to improve its marketing strategy:
• Product
• Price
• Promotional Activities
• Distribution Network
• Customer Service
26. Did you face any difficulty while filling up the questionnaire (please specify)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Please attach your business card if you would like to receive a copy of the study findings.
(Thank you for your cooperation in this important study)
xvi

Thesis TELECOM MOBILE SECTOR Preetkanwal

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Thesis TELECOM MOBILE SECTOR Preetkanwal

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AN EMPIRICAL STUDY OF TRUST AND COMMITMENT

IN CELLULAR USERS OF SELECTED TELECOM

UNIVERSITY BUSINESS SCHOOL

CHAPTER – 2: REVIEW OF LITERATURE

2.1 BRIEF OVERVIEW 46

CHAPTER – 3: GROWTH OF INDIAN TELECOM SECTOR

CHAPTER – 4: A CONCEPTUAL FRAMEWORK OF TRUST

4.1 INTRODUCTION 108

CHAPTER – 5: RESEARCH FINDINGS OF THE STUDY

5.1 BRIEF OVERVIEW 124

6.1 INTRODUCTION 257

ANNEXURE – I: LIST OF SERVICE PROVIDERS

Figure Title Page

Table Title Page

In the 21st century, the new economy is becoming increasingly customer

On the surface, there is considerable merit in the idea of a service

Services sector is the fastest growing segment as compared to other

1.2 GROWTH OF INDIAN TELECOM SECTOR: AN OVERVIEW

The service sector growth worldwide has been phenomenal which is

According to a survey conducted by the Confederation of Industry

The Indian mobile services industry is moving in full swing, be it

The most important of them that are considered to be landmarks in Indian

19 86 M ay 94 J an 9 5 Ma r 9 6 Ma r 9 9 J uly 9 9 Oct 9 9 D ec 99 Au g 00 J an 0 1 Jul 0 1 F eb 0 2 A pr i l 03 J u ne 0 4 Apr i l 05 S ep t. 06

Source: Merrill Lynch, December, 2006.

March, March, March, March, March, March, March,

Table 1.2: Performance of Mobile Service Providers from 2000-2006

i) Rate of growth in mobile subscriber base has been substantially higher

ii) Tele-density has also gone up which is reflection of above discussion.

Figure 1.2: Trend Exhibited by Subscriber Base, Traffic and Average

400 Subscriber base (in

S. No. Service Provider No. of Circles

Figure 1.4: Operator-wise Market Share of GSM Mobile as on 30.9.2006

Source: www.trai.gov.in as on 30th Sep 2006

Figure 1.5: Operator-Wise Market Share of CDMA Mobile as on 30.9.2006

Source: www.trai.gov.in as on 30th Sep, 2006

1.3 TRUST AND COMMITMENT AND TELECOM SECTOR

Telecommunication markets have changed dramatically in recent

The evolution of the competition forces firms to cope with an

The trust concept has been the object of particular attention in

It has been observed from marketing literature that trust is crucial

On the grounds of exhaustive review done by Castaldo (1995), it is

Subsequently, other definitions of trust, as those provided by

To come to the point, Andaleeb (1992), who is quoted subsequently

Table 1.4: Categories of Trust

Bonding trust Hopeful trust

Unstable trust Distrust

Also Ganesan (1994), to whom more recently Doney and Cannon

b) benevolence, based on the buyer’s belief that the supplier acts on

Among the authors who have proposed a multidimensional

The most recent marketing studies are characterised by a further

In the light of these distinctions, trust can be, therefore, defined as

Whereas, definition work on the construct of commitment began in

On the other hand, psychologists defined commitment in terms of

Conceptualisations of commitment as a relationship, in the context

It is important to keep and build strong bond of trust and

1. There are higher marketing costs associated with generating

The marketing costs involved in the creation of interest in an

2. The close and long-term relationships with customers imply

3. Viewing customer exchanges as a revenue stream, as opposed to a

4. Strong customer relationships with a high degree of familiarity and

1.5 RESEARCH OBJECTIVES

The study has the following objectives:-