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Determinants of Customer Satisfaction in the Telecommunication Industry of Afghanistan
Ajmal Haidari
Volume | 005 Bochum/Kabul |2017 www.afghaneconomicsociety.org
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Determinants of Customer Satisfaction in the Telecommunication Industry of Afghanistan
Ajmal Haidari
Keyword List
Customer satisfaction, structure equation modelling, telecommunication industry, university
students
Abstract
In a competitive market, companies determine strategies to boost service quality for the purpose
of attracting and retaining customers. This helps them to develop market share and satisfy
customers. Customers are satisfied when their expectations are fulfilled when using a service.
In this study, the determinants of customer satisfaction in the telecommunication of Afghanistan
are assessed. The study was conducted at the northeastern universities of Badakhshan, Takhar,
Kunduz,and Baghlan and the target population was the students. The primary data were obtained
via questionnaires distributed to randomly selected customers. For the purpose of analysis,
structure equation modeling was applied using Amos 22 and SPSS. The research found attractive
offers, sales promotion, internet service, price fairness and being friendly to be the key
determinants of customer satisfaction in the telecommunication of Afghanistan. Furthermore this
research revealed marketing offers satisfied customers most while there was no evidence that
customers were influenced by technical variables such as coverage area, service quality and
customer care.
Description of Data
This research is quantitative and exploratory, and relies on primary data gathered through
questionnaires. The questionnaire was designed based on literature review. The main focus of
the research is the satisfaction level of subscribers to telecommunication services in Afghanistan.
The target population is the university students of the north-eastern provinces. A hundred
respondents were sampled from each university and a total of 400 questionnaires were distributed
among private and public universities in Badakhshan, Takhar, Kunduz and Baghlan on a random
basis. The respondents selected were those who had used one of the telecommunication
companies’ SIM cards for at least for a year, because it would be impossible to measure any level
of satisfaction over a shorter period of time. The questionnaire consisted of two parts. The first
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was demographic variables that asked respondents about their personal characteristics. The
second part included both the dependent variable of customer satisfaction and independent
variables of (service quality, price fairness, promotion, customer care service, coverage area,
attractive offer, retailer shops, being friendly and internet services). Demographic variables of
education, telecom service provider, and marital statues were measured using coding and the
variables of age and gender measured on a binary basis. Each variable was described via latent
variables, and in total the questionnaire was comprised 20 measurement items.
To analyse the data and find out the determinants of customer satisfaction from the group of
independent variables, a five point Likert scale ranging from 1 (strongly dissatisfied) to 5 (strongly
satisfied) was designed.
From a total of 400 questionnaires distributed at the four mentioned provincial universities 386
were retrieved and were usable, whilst the rest were either incorrectly completed or not returned.
In order to evaluate the causal relationship between latent variables and observed variables, the
hypothesis proposed was tested and the factors influencing customer satisfaction in the
telecommunications industry were determined using SEM (Structure Equation Modelling)
supporting AMOS version 22.
Research Question/Theoretical contextualization
The telecommunication industry is the fastest growing sector in Afghanistan. From its first
inception in 2001 it is has become the industry that generates employment opportunities and has
a huge role in increasing GDP through tax receipts. In the first phase more than 580000 cell
phones were distributed all over the country, meanwhile internet net cafes were established in
five major cities. By 2008 it was estimated that the number of subscribers has increased to 3.2
million (Congress, 2008). However, while this sector is young in Afghanistan it is considered to
be the sector that is operating almost in accordance with international standard. Despite on-going
conflict the telecoms industry has turned into a highly competitive market with 25 million
subscribers out of population 35 million, which represents a penetration of 88% in Afghanistan
(Harpur, 2017).
In a highly competitive market seven telecommunication companies are currently offering wireless
and internet services, which represents an incredible change in a short period for the region. The
key investors in the Afghan telecommunication industry are both national and international
companies operating in almost 34 provinces of the country (Jamali, June 2016). The provision of
service quality and level of customer satisfaction in particular become a key determinant of
success in a competitive market. Customer satisfaction is part of the strategic plan of companies.
Unless they consider customers ‘wishes or not deliver value to them through products/services.
It is hard for firms to retain current market share, which is why companies are nowadays more
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customer-centre. Companies are successful if they list customers’ satisfaction as their priority,
while the long term profitability of a firm is directly linked to the level of customer satisfaction. A
customer is satisfied if his or her evaluation of what they receive exceeds expectations. According
to Oliver’s definition satisfaction is the post-consumption state when customers evaluate whether
the service or product accurately fulfilled the proposed function (L.Oliver, 1999).
Customer satisfaction is assumed to be an interfering construct in the field of marketing because
it ultimately motivates customers to re-purchase and be loyal to the product for a long time (K.
Ravichandran, April 2010). Customer satisfaction normally relates to the level of expectation
shaped from past experience of using a service. Due to this, customers experience different
degrees of expectations when purchasing services. When a service performance increases
beyond what customers expect, customers are highly satisfied when using the product. In the
case the performance of a product/service was only able meet customer expectations, customers
are satisfied. Finally customers are unhappy if a product does not meet their expectation and they
will probably switch to other products. This is the worst case for a company and results in the loss
of customer base (Philip Kotler et al, 1999). Oliver defined satisfaction as a “deeply held
commitment to rebuy or patronize a preferred product or service consistently in the future, despite
situational influences and marketing efforts having the potential to cause switching behaviour”
Firms use customer satisfaction as an indicator to reveal how their product is evaluated in the
context of customer preference and then formulate their product quality accordingly (Kiet, 2013).
Perhaps it will be impossible to find a unique definition for satisfaction in literature, because
researchers and scholars have come to accept that satisfaction is a state of mind that differs
among individuals. This is different for different people. In addition if we search for unified
perspective it becomes clear that satisfaction is a matter of comparison between expectations
and perceived values of a product by a customer (policy, 2007). Retaining satisfied customers
further helps companies to build their reputation and, as a consequence increase the cash flow.
Furthermore customer satisfaction assessment enables companies to figure out their strengths
and weak points in comparison with competitors. Companies can only do this through
distinguishing customer’s needs, preferences and take action to maintain these demands sooner
than competitors (Egena, 2013). The term customer satisfaction usually uses a measurement to
determine how satisfied customers are with a product sold by companies, and through this
measurement companies evaluate their competitive edge in the market. Therefore firms consider
customer satisfaction to be a key element in their strategic plan (Wollenberg, 2016).
Afghanistan is located in central Asia, so for the purpose of using supportive evidence
corresponding to the present research, research topics were selected from central and Southeast
Asian countries. The logic behind this approach is the similarity of Afghanistan from economic,
culture, and social perspectives to these neighbouring countries. Meanwhile there is still not any
research background available in the country to use as a viable source. Current research
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investigates the main determinants of customer satisfaction in the telecommunication industry
and, in the view of Anderson price, promotion, and quality control are the main determinants of
customer satisfaction (Anderson, 1973).
Nowadays, evaluating customer satisfaction has become a hot topic for both researchers and
marketing departments. In a research conducted in Pakistan that focused on the determinants of
customer satisfaction using an SEM approach it was established that reasonable price and call
clarity are the strongest determinants of customer satisfaction in Pakistan (Fatima Ali, et al, 2009).
Research based on SEM modelling conducted in Malaysia found responsiveness and brand
image to be the main determinants that influenced customer satisfaction in the Malaysian
telecommunication industry (Suki, 2011). According to a research done in Nigeria product,
promotion and distribution had a high impact on customer satisfaction, and this research revealed
that customers who could trust a provider showed more loyalty (Oghojafor, 2014). In a study by
Saheed and Afshin University students commented their level of satisfaction with cellular services
in the Peshawar region of Pakistan and revealed that price fairness, coverage area and customer
services were the main factors motivating them to maintain their involvement with their respective
service providers. In addition the study found a significant and positive relationship between
customer satisfaction and dependent variables such as, price fairness, sales promotion, coverage
and signal strengths (Afsheen, 2012). Due to three decades of war which has harmed the
infrastructure of Afghanistan and a weak culture of research, it has not been possible to find
previous bodies of knowledge about customer satisfaction. Current research is trying to find the
main determinants of customer satisfaction in the northeast region of Afghanistan. Consequently
this research looks to answer some questions and test some hypotheses. The main target of
current study is to establish the following:
1. Are customers satisfied with national and international companies providing
telecommunication services in Afghanistan?
2. What makes customers continue to purchase of telecoms companies’ services?
3. What are the main determinants of customer satisfaction in the telecommunication
industry of Afghanistan?
For the purpose of acquiring a meaningful result this research has also developed some
hypotheses:
H01: Price fairness significantly affects customer satisfaction.
H02: Coverage area significantly affects customer satisfaction.
H03: Being friendly significantly affects customer satisfaction.
H04: Service quality significantly affects customer satisfaction.
H05: Sales promotion significantly affects customer satisfaction
H06: Customer care significantly affects customer satisfaction
H07: Attractive offers significantly affects customer satisfaction
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H08: Internet service significantly affects customer satisfaction
Field research design/ Methods of data gathering
This research attempted to measure the determinants of customer satisfaction in
telecommunication industry of Afghanistan. From administrative perspective Afghanistan is
divided in to five zones. Each zone’s provinces have private and state universities that offer higher
education at Bachelor’s and Master’s degree levels. The current research focused on north-
eastern provinces university students. The rationale was that the majority of subscribers who are
users of cell phones as well as educated would be eligible for interview in a society that suffers
from high rates of illiteracy. Furthermore the university students constitute the largest portion of
customers in the telecoms industry of Afghanistan, because services and packages offered by
companies are mostly in demand among more educated members of Afghan society. This
research tries to add to the body of scientific knowledge and propagate the culture of research in
the Afghan telecoms industry that has a serious shortage of literature sources.
Each university received a hundred questionnaires and four hundred questionnaires were
distributed in total on a random basis in north-eastern province. The data gathering from a society
that has never experienced a survey especially for academic purposes is time consuming. For
the ease of obtaining unbiased data from respondents surveyors gave verbal information about
the aim of the research. A team of two data collectors was deployed in the target province and
after receiving comprehensive training about the whole process, was given one to interview 100
students. After the data collection process the data was sorted and finally 386 of the
questionnaires were found satisfactory for entry. The remaining questionnaires were destroyed.
Demographic variables were measured by using coding and binary approach, whilst dependent
and independent variables were measured using a five-point Likert scale ranging from 1 strongly
dissatisfied to 5 strongly satisfied. The questionnaire items were adapted from literature review,
for instance demographic items were adapted from the research of Yallapragada in the UAE
(Yallapragada, 2017), service quality, price fairness, customer service, customer satisfaction
were taken from the research of Aminu Ahmad (Ahmad, 2008). This research investigates the
major determinants of customer satisfaction in the telecommunication industry of Afghanistan
through Structure Equation Modelling as used by Suki (Suki, 2011), Amos 22 was adapted to
analyse the data. Structure equation modelling is a statistical technic uses to evaluate human
behaviour. The behaviour of humans is not easily measurable and needs a latent construct to
describe observed variables; SEM is a good instrument to assess theoretical constructs. In
marketing research SEM is applied to hypothesize theoretical marketing behaviour and confirm
this statistically. Structure equation modelling includes a package of multivariate factor analyses
such as regression, factor analysis and analysis of variance (Scott MacLean, 1998). Furthermore,
another characteristic of SEM is the combination of factor analysis and regression or path
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analysis. It is usually illustrated via graphical path diagrams. Indeed it is a compound of
multivariate factor analyses that is used for predicting marketing behavior and confirming the
research model fit (Bechger, 2011).
Results
As mentioned above the main purpose of the present research is to find the key determinants of
customer satisfaction in the Afghan telecommunication industry of Afghanistan, and a linear
equation modeling is designed to evaluate the effects of exogenous variables on endogenous
variables. The only dependent variable of the research was customer Satisfaction. Service
quality, coverage area, price fairness, attractive offers, sales promotion, retailer shops, being
friendly and internet services were the independent variables. The dependent and independent
variables measured by 20 latent constructs. In order to specify the respondents’ characteristics
some demographic variables were used like gender, age, education and service provider. Since
the research focus was university students, there was no need to ask respondents about their
level of income. In undeveloped countries like Afghanistan adults have the choice of either
pursuing education or working. As the socio-demographic data in Table 1 show the research
found that 33.2% interview participants were female and 66.2% were male. From age perspective
72.8% of the respondents were in age category 18-22 and 25.6% were in the age category 22-
26. Only 3% of the interviewees were above 27 years old.
Table 1: Demographic characteristic of respondents
Source: Field research Nov-Dec 2017 The reliability of the questionnaire items was tested via Cronbach’s alpha using SPSS. The result
0.818 shows that the reliability of the items was partially satisfactory.
Figure 1 Conceptual model framework of customer satisfaction.
Variables Category Frequency Percent
Gender Male 258 66.8
Female 128 32.2
Age 18-22 281 72.8
22-25 95 24.6
>25 10 2.6
Education Bachelor’s degree 379 98.19
Master’s degree 7 1.81
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To evaluate the hypothesized conceptual model framework, the structure model was tested using
SEM. The goodness-of-fit for the model was tested using Amos 22; and the result that indicates
all criteria were met,
Table 2 Goodness-of-fit test for the structural model
Fit Indices Standard Value Range
Model Values
Chi-Square 336.093
Df( Degree of Freedom) 16
GFI( Goodness of fit Model) >0.9 .947
RMSEA( Root Mean square of Error Approximation) <0.10 .042
AGFI(Adjusted Goodness of Fit Index) >0.8 .911
NFI(Normal Fit Index) >0.9 .875
CFI(Comparative Fit Index) >0.9 .943
IFI(Incremental Fit Index) >0.9 .945
RFI(Relative Fit Index) >0.9 .810
Source: Field research Nov-Dec 2017
As Table 2 depicts, all the indices met the standard criteria values except for NFI and RFI that
were close to accepted values when rounded up. Based on table 2 findings above the structural
model is fit for conducting hypothesis tests.
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Table 3 Regression weights and summary of hypothesis tests
Paths (β) S.E C.R P Results
Customer Satisfaction <--- Service Quality .072 .043 1.681 .093 Rejected
Customer Satisfaction <--- Coverage Area .010 .041 .247 .805 Rejected
Customer Satisfaction <--- Customer Care .029 .036 .823 .411 Rejected
Customer Satisfaction <--- Price Fairness .095 .033 2.860 .004 Accepted
Customer Satisfaction <--- Internet Services .113 .039 2.930 .003 Accepted
Customer Satisfaction <--- Retailer Shop .091 .036 2.514 .012 Accepted
Customer Satisfaction <--- Being Friendly .147 .037 3.975 .000 Accepted
Customer Satisfaction <--- Sales Promotion .112 .030 3.695 .000 Accepted
Customer Satisfaction <--- Attractive Offers .212 .037 5.719 .000 Accepted
Source: Field research Nov-Dec 2017
(S.E stands for standard error, C.R for critical value, p for p-value which is 0.05)
To accept the null hypothesis of research, the p-value of the relationship assumed should be
<0.05, hence according to the Table 3 outputs, the hypothesized effects of price fairness, internet
service, retailer shop, being friendly, sales promotion and attractive offers can be accepted
according to the dependent variable of customer satisfaction. The major determinant of customer
satisfaction recognized in this study is attractive offers with a 0.212 coefficient, and the second
determinant is being friendly with 0.147, followed by third internet service 0.113, fourth sales
promotion 0.112, and fifth price fairness 0.095. The interesting finding of this research is that price
fairness has a low coefficient but is a significant determinant among independent variables.
According to the findings above service quality, coverage area and customer care did not satisfied
customers and with low coefficient and p-value higher than 0.05 were rejected.
Discussion & Conclusion
This study investigated the key determinants of customer satisfaction in the telecommunication
industry of Afghanistan. University students in the northeastern region that includes universities
of Badakhshan, Takhar,Baghlan and Kunduz were the target population. For the purpose of
analysis, structure equation modeling was applied to evaluate the impact of nine variables on
customer satisfaction, but based on current research findings only six of them can be accepted
as variables that affect customer satisfaction.
First, attractive offers showed a strong and significant relationship with customer satisfaction. As
with other rapidly growing telecoms industries Afghan telecommunication industry benefits from
the latest development in technology, especially those that facilitate international calls, optical
fiber internet services and low prices to motivate Afghan customers.
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Secondly, being friendly was observed as another factor influencing customer satisfaction.
Cellular companies are participating in the reconstruction and development of a post war society
by building schools, parks, offering entertainment programs, poverty alleviation, and health care
assistance. Afghan customers reward companies for their social, educational and environmental
contributions.
Thirdly, the research revealed a strong relationship between sales promotion and customer
satisfaction. The marketing strategies of Afghan telecoms companies allocate part of their budget
to attracting and retaining customers in competitive markets. The higher the sales promotion the
higher will be customer satisfaction.
Fourthly, price fairness as a determinant of customer satisfaction was found to be a valuable
finding of the research. In a country like Afghanistan with low-level of income it is highly important
for customers to prefer a company based on its service price. Cheap services increase customer
satisfaction and keep them loyal to the company. This finding corresponds to that of Afsheen and
Shahzad’s research in Pakistan (Shahzad Khan, 2012). Finally unlike call service quality
customers are more satisfied with internet services and this is because of internet is a new
phenomenon for Afghan customers. Accessibility to social media means customers focus more
on internet than voice call services. The research found no support for coverage area, service
quality and customer care variables. As a result, Afghan customers are partially satisfied with the
marketing strategy of telecoms companies, while observations indicate that companies are weak
in terms of technical support for customers. In conclusion Afghan customers highly prefer
companies’ that charge low prices and have good sales promotion policies, internet services and
show care for customer welfare. In the newly emerging telecommunication industry of
Afghanistan, this research contribution leaves a literature source for further research as well as
helps companies to understand the strengths and weaknesses of their activities and recognizes
factors that keep customers loyal.
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