Service Quality and Consumer Perception:

A study of Telecom Service Providers

Authors:

Aprajita Rana

Dr. Kapil Arora

Service QualityBitner, Booms and Mohr -‘the consumer’s

overall impression of the relative inferiority / superiority of the organisation and its services’

Parasuraman, Zeithaml and Berry- ‘a function of the differences between expectation and performance along the quality dimensions’

Indian telecom Industry960.90 million subscribers929.37 Million wireless Mobile Number Portability (MNP) launched on

20th January, 2011Mobile Number Portability requests from 50.16

Million wireless subscribersDeclining Average Revenue Per User (ARPU)MP Consumer Base–Idea highest 143,30,482, then Reliance, Airtel, BSNL, Tata (TRAI May 12)

ObjectivesTo compare the consumer perception of

service quality of the five popular telecom service providers –Airtel, BSNL, Idea, Tata Docomo and Reliance

Compare the service quality of the five service providers along five dimensions: reliability, responsiveness, responsiveness, assurance, empathy, and tangibles

Literature ReviewParasuraman, et. al (1988) conducted empirical

studies in several industry sectors to develop and refine SERVQUAL, a multiple-item instrument to quantify customers’ assessment of a company’s SQ

Van-der-Wal, et. Al (2002) used SERVQUAL to investigate service quality in mobile telecommunication in South Africa. They concluded that the instrument was reliable and could be used to assess service quality in telecommunication industry.

Stafford (1999)- critical to the improvement of service quality is the determination of those service quality characteristics considered important by customers.

Bolton and Drew (1991)- customer-perceived service quality is an important success factors of business competition.

SERVQUALMultiple-item instrument to quantify

customers’ assessment of a company’s SQ. Measures SQ along five dimensions:Tangibles: Physical facilities, equipment

and appearance of personnel.Reliability: Ability to perform the promised

service dependably and accurately.Responsiveness: Willingness to help

customers and provide prompt service.Assurance: Knowledge and courtesy of

employees and their ability to inspire trust and confidence.

Empathy: Caring, individualised attention the firm provides its customers.

Research Methodology SERVQUAL: 22-item scale was employed147 respondentsCronbach alpha: 0.888, indicating good

consistency among the itemsConsumers of Airtel, BSNL, TATA, Reliance

and Idea surveyedOne-way ANOVA used to compare SQ of these

service providers

Distribution of RespondentsService Providers No. of respondents Percent

Bharti Airtel 41 27.9

Idea Cellular 33 22.4

Tata Docomo 20 13.6Reliance

Communication 27 18.4

BSNL 26 17.7

Total 147 100.0

41

3320

27

26Airtel

Idea

Tata Docomo

Reliance

BSNL

Demographic characteristicsGender No. of respondents Percent

Male 79 53.7Female 68 46.3Total 147 100.0

EducationNo. of

respondents PercentUnder graduate 55 37.4

Graduate 28 19.0

Post Graduate 64 43.5

Total 147 100.0

79

68

No. of Re-spondents

Male Female

55

28

64 Under graduate-55 Graduate-28 Post Graduate-64

ResultsService

ProvidersService Quality Mean

Score

Bharti Airtel 110.2195

Idea 106.4242

Tata Docomo 104.1000

BSNL 87.8462

Reliance Comm. 86.6296

Results:

Service Quality

Mean Score

0

40

80

120

Airtel

Idea

Tata Docomo

BSNL

Reliance

ResultsNo significant difference in the

quality perception of Airtel, Idea and Tata Docomo consumers. (Group A)

No significant difference in SQ perception of BSNL and Reliance consumers. (Group B)

Significant difference in SQ perception between Airtel, Idea, Tata (Group A) and BSNL, Reliance (Group B) consumers.

ResultsTangibles: Similar result, Idea had highest

values, BSNL the lowestReliability: Similar result, Airtel –best and BSNL

worstResponsiveness: Tata Docomo-best and Reliance

worstAssurance: Airtel and Idea- Better, Reliance

provides least assurance (Airtel, Idea, BSNL and Tata Docomo significantly differ from Reliance)

Empathy: Airtel –best and Reliance worst

ConclusionAirtel, Idea and Tata Docomo customers

perceive better service quality than BSNL and Reliance customers.

BSNL and Reliance need to focus on customer-oriented services.

MNP provides a way out to customers perceiving poor service quality

Declining Average Revenue Per User (ARPU) and increase in MNP requests are threats to the providers which can only be overcome by efforts to improve the service quality perceptions

Thank you