METHODIST UNIVERSITY COLLEGE GHANA 

FACULTY OF BUSINESS ADMINISTRATION 

 

 

 

DETERMINANTS OF CUSTOMER LOYALTY IN THE  

TELECOMMUNICATION INDUSTRY IN GHANA 

 

 

BY 

RANSFORD OSBERT COFIE 

90000026 

 

 

THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON IN 

PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MPHIL 

MARKETING DEGREE 

 

 

 

 

 

NOVEMBER, 2014 



                                                      

i 
 

 

 

 

DECLARATION 

 

I, Ransford Osbert Cofie, hereby declare that this research work was carried out by me and all 

other references cited or any view or work by any persons or authors has been duly 

acknowledged. I further declared that this thesis has not been presented for any degree in this 

institution or elsewhere. 

 

 

…………………………………..                             ……………..…….                                                             

Ransford Osbert Cofie       Date 

(Index Number: 90000026) 

 

  



                                                      

ii 
 

CERTIFICATION 

 

We hereby certify that this thesis was supervised in accordance with the procedures laid down by 

the University of Ghana. 

 

 

……………………………….                                              ……………………….  

Dr. Bedman Narteh                           Date 

(Supervisor)                                        

 

 

…………..…………                                           ………………..……… 

Dr. Divine Akwinsive       Date 

(Supervisor) 

 

 

 

  



                                                      

iii 
 

DEDICATION 

 

This piece of work is dedicated to the Almighty God for his guidance, abundance love and 

mercies and to my dearest mum, Madam Aku Mingle, for her excellence care and love. I also  

dedicate this work to my beloved wife, Mrs. Charlotte Tackie Cofie for her immense support in 

making this dream a reality and our beloved children, Owen Osbert Cofie and Janelle Charlene 

Cofie.  

 

 

  



                                                      

iv 
 

ACKNOWLEDGEMENT 

 

I wish to express my heartfelt gratitude to the Almighty God for seeing me through my education 

and granted me the wisdom and the strength to undertake this project. 

It gives me pleasure to acknowledge the support received in the preparation of this research 

work. Indeed, a research of this nature could not have been accomplished without the help of 

others.  

I am greatly indebted to Dr. Bedman Narteh and Dr. Divine Akwinsive who took time off their 

busy schedules to painstakingly supervise every piece of this work I sent to them.  

I wish to also acknowledge the assistance received from my lecturers at Graduate School, 

Methodist University College particularly, Mr. D. D. Dankwa, past Head of Marketing 

Department and all the Lecturers at the Marketing Department. 

Also, I acknowledge the assistance of my siblings particularly my twin brother Rexford Osward  

Cofie for their supports, prayers and encouragements for making this dream a reality. I say, God  

Bless you all and many thanks go to the Management and staff of the Ministry of Education 

particularly, Major M. S. Tara (RTD), former Chief Director, for accommodating me during the 

research work.  

To my good colleague at office Joseph Essah who also cheered me up to persist this project to 

materialized, I say God richly bless you. 

 

 

  



                                                      

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ABSTRACT 

 

The purpose of this paper is to examine the determinant of customer loyalty in the 

telecommunication industry of Ghana. Deliberations on literature discussed issues on the concept 

of customer loyalty, classification of customer loyalty, customer satisfaction, service quality, 

empirical studies of loyalty among mobile phone users and outline on the profile of 

telecommunication companies in Ghana. On the basis of literature materials, a list of factors 

were extracted as determinants of customer loyalty (call quality, switching cost, 

connectivity/coverage, network charges, value added services, promotional efforts). A sample of 

700 respondents (customers of mobile phone operators) was used and convenience sampling 

method was conducted and data was analyzed through exploratory factor analysis and multiple 

regression. The research found that among the factors or determinants used to examine customer 

loyalty in the telecommunication, call quality, and switching cost was identified as highly 

significant in determining customer loyalty. The findings suggests that mangers of these mobile 

operators should put more focus on improving call quality and analyze more carefully the reason 

for customers to switch brands in this industry in order to increase loyalty among these 

customers. 

  



                                                      

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TABLE LIST 

 

Table 2.1: Empirical Representation of Literature Studies 

Table 2.2: Telecommunication Operators in Ghana 

Table 2.3: Products and services 

Table 3.4: Fundamental differences between quantitative and qualitative research strategies 

Table 4.5: Gender of respondents 

Table 4.6: Age of respondents 

Table 4.7: number of operator network used by the respondents 

Table 4.8: average monthly spend on mobile telecommunication services 

Table 4.9: t test (descriptive statistics) 

Table 4.10: KMO and Bartlett's Test 

Table 4.11: Principal Component Factor Loadings 

Table 4.12: Internal Consistency and Final Revised Structure 

Table 4.13: Reliability of scales for dependent variable 

Table 4.14: Multiple regression analysis of civil servants‘ loyalty with mobile 

telecommunication services 

 

 

 

 

 

 

 

 



                                                      

vii 
 

 

FIGURE LIST 

 

Figure 2.1: Factors that influence customer loyalty 

Figure 2.2: The Impact of determinant factors on Customer Loyalty 

Figure 4.3: Four sources of error in social survey research 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



                                                      

viii 
 

Table of Contents 
DECLARATION ........................................................................................................................................... i 

CERTIFICATION ........................................................................................................................................ ii 

DEDICATION ............................................................................................................................................ iii 

ACKNOWLEDGEMENT ........................................................................................................................... iv 

ABSTRACT ................................................................................................................................................. v 

TABLE LIST ............................................................................................................................................... vi 

FIGURE LIST ............................................................................................................................................ vii 

1.0 INTRODUCTION ............................................................................................................................ 1 

1.1 BACKGROUND .............................................................................................................................. 1 

1.2 PROBLEM STATEMENT ............................................................................................................... 7 

1.3 RESEARCH OBJECTIVES ............................................................................................................. 9 

1.4 RESEARCH QUESTIONS .............................................................................................................. 9 

1.5 RESEARCH HYPOTHESIS………………………………………………………………………9 

1.6 SIGNIFICANCE OF THE STUDY ............................................................................................... 10 

1.7 JUSTIFICATION OF THE STUDY .............................................................................................. 11 

1.8 ORGANIZATION OF THE STUDY ............................................................................................. 12 

CHAPTER TWO ........................................................................................................................................ 13 

LITERATURE REVIEW ........................................................................................................................... 13 

2.0 INTRODUCTION .......................................................................................................................... 13 

2.1 THEORETICAL BACKGROUND................................................................................................ 13 

2.2 THE CONCEPT OF CUSTOMER LOYALTY ............................................................................. 13 

2.3 CLASSIFICATION OF CUSTOMER LOYALTY ....................................................................... 16 

2.5 SERVICE QUALITY AND CUSTOMER LOYALTY ................................................................. 19 

2.6 FACTORS THAT INFLUENCE CUSTOMER LOYALTY ......................................................... 19 

2.6.1 Core offering ..................................................................................................................................... 20 

2.6.2 Location and premises ....................................................................................................................... 21 

2.6.3 Service ............................................................................................................................................... 21 

2.6.4 The product or service ....................................................................................................................... 21 

2.6.5 Satisfaction ........................................................................................................................................ 21 

2.6.6 Elasticity level ................................................................................................................................... 22 

2.6.7  Share of wallet ................................................................................................................................ 23 

2.6.8 The marketplace ................................................................................................................................ 23 

2.6.9  Demographics ................................................................................................................................. 24 



                                                      

ix 
 

2.7 CHALLENGES OF CUSTOMER LOYALTY ............................................................................. 24 

2.8 EMPIRICAL STUDIES OF CUSTOMER LOYALTY ON MOBILE PHONE ........................... 26 

USERS ........................................................................................................................................................ 26 

2.9 DETERMINANTS OF CUSTOMER LOYALTY IN THE ........................................................... 32 

TELECOMMUNICATION SECTOR IN GHANA ................................................................................... 32 

2.9.1 Customer Service and Customer Loyalty .......................................................................................... 33 

2.9.2  Promotion and Customer Loyalty ................................................................................................... 34 

2.9.3  Value Added Services and Customer Loyalty ................................................................................ 36 

2.9.4  Network Coverage and connectivity and Customer Loyalty .......................................................... 38 

2.9.5  Switching Cost and Customer Loyalty ........................................................................................... 38 

2.9.6  Call Quality and Customer Loyalty ................................................................................................ 40 

2.9.7   Network Charges and Customer Loyalty ...................................................................................... 41 

2.10 CONCEPTUAL FRAMEWORK ................................................................................................... 44 

2.11 THE TELECOMMUNICATIONS INDUSTRY IN GHANA ....................................................... 46 

2.12 PROFILE OF TELECOMMUNICATION COMPANIES FOR THE STUDIES ………………48 

2.12.1 Profile of Tigo…………………………………………………………………………………….50 

2.12.2 Profile of Mobile Tecommunication Network (MTN)…………………………………………...51 

2.12.3 Profile of Vodafone………………………………………………………………………………54 

2.12.4 Profile of Airtel…………………………………………………………………………………..58 

2.12.5 Profile of Expresso………………………………………………………………………………..64 

2.12.6 Conclusion of the Analysis of the Profiles……………………………………………………….65 

CHAPTER THREE ................................................................................. Error! Bookmark not defined.66 

METHODOLOGY ..................................................................................................................................... 66 

3.1 INTRODUCTION .......................................................................................................................... 66 

3.2       RESEARCH DESIGN .................................................................................................................... 66 

3.3 RESEARCH APPROACH ............................................................ Error! Bookmark not defined.6 

3.4       POPULATION AND SAMPLING ................................................................................................ 67 

3.4.1 Population………………………………………………………………………………………...67 

3.4.2 Sampling Techniques………………………………………………………………………… ….68 

3.5     SAMPLING SIZE ............................................................................................................................ 68 

3.6      DATA COLLECTION AND QUESTIONNAIRE DESIGN .......................................................... 69 

3.7       RELIABILITY AND VALIDITY .................................................................................................. 71 



                                                      

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3.7.1 Reliability……………………………………………………………………………………………………………………………….. 72 

3.7.2 Validity………………………………………………………………………………………………………………………………….. 72 

3.8      STATISTICAL ANALYSIS ........................................................................................................... 72 

CHAPTER FOUR ...................................................................................................................................... 73 

PRESENTATION OF RESULTS AND DISCUSSION OF FINDINGS .................................................. 73 

4.0 INTRODUCTION .......................................................................................................................... 73 

4.1 DEMOGRAPHIC PROFILE OF RESPONDENTS ...................................................................... 73 

4.2 DATA ANALYSIS ........................................................................................................................ 76 

Descriptive Statistics .................................................................................................................................. 76 

4.3 EXPLORATORY FACTOR ANALYSIS ..................................................................................... 78 

4.4 VARIMAX ROTATED PRINCIPAL COMPONENT LOADINGS ............................................. 80 

4.5 RE-SPECIFICATION AND RELIABILITY OF THE EXPLORATORY FACTOR ................... 80 

ANALYSIS (EFA) ..................................................................................................................................... 80 

4.6 RELIABILITY OF THE DEPENDENT VARIABLE ................................................................... 82 

4.7 MULTIPLE REGRESSION ANALYSIS ...................................................................................... 82 

4.8 DISCUSSION OF RESULTS ........................................................................................................ 84 

4.9 SUMMARY ................................................................................................................................... 87 

CHAPTER FIVE ........................................................................................................................................ 88 

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS .............................................................. 88 

5.0 INTRODUCTION .......................................................................................................................... 88 

5.1 SUMMARY ................................................................................................................................... 88 

5.2 CONCLUSIONS………………………………………………………………………………… 90 

5.3 RECOMMENDATIONS ................................................................................................................ 91 

5.4 RESEARCH LIMITATIONS AND DIRECTION FOR FUTURE RESEARCH ......................... 92 

REFERENCES ........................................................................................................................................... 93 

APPENDICE ............................................................................................................................................ 101 

APPENDICE 2 ..................................................................................................................................... 10403 

APPENDICE 2a ................................................................................................................................... 10504 

 



                                                      

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CHAPTER ONE 

 

1.0 INTRODUCTION 

This chapter introduces the reader to understand the rationale of the study. This is centered on 

the background, followed by the problem statement, research objectives, research questions, 

significance of the study, justification of the study and the organization of the various chapters. 

 

1.1 BACKGROUND  

It is vital for companies to retain their existing customers in a competitive environment. This has 

been recognised by many scholars in the extant literature. Customer loyalty is one of the most 

frequently discussed subjects in the marketing and service literature (Eshghi et al., 2007; Heskett 

& Sasser, 2010). Jones et al., 1995 define customer loyalty has the customer repeating purchase 

intention to some specific products or services in the future. Andres, 2007 posited that customer 

loyalty is one of the key factors that can assist a company to achieve long-term success. Ndubisi 

(2005) and Pfeifer (2005) point out that the cost of serving a loyal customer is five or six times 

less than a new customer. This was buttressed by Walsh et al. (2005) who state that it is better to 

look after the existing customers before acquiring new customers. The above information shows 

clearly that it is important for mobile telecommunication operators to practice customer loyalty 

for their benefit.  

 

The telecommunication industry in Ghana has been on a very progressive journey and it has 

covered a great distance within a short period of time. This tremendous increase in the tele-

density has been as a result of establishment of the National Communications Authority (NCA) 

by an Act of Parliament, Act 524 of 1996 and the subsequent deregulation of the telecom 



                                                      

2 
 

industry, which brought about the growth of wireless telephony as a result of significant 

investment by operators. The deregulation of the telecommunication industry opened up 

opportunities for international large telecommunication companies to establish operations in 

Ghana and participate in the biggest boom in Ghana‘s recent economic history. Currently, the 

telecommunication industry in Ghana is private sector dominated, with six major operators 

namely; MTN, Tigo, Vodafone, Airtel, Expresso and Glo which recently joined. 

 

Telecom analysts say, the mobile market has almost reached its maturity stage and the statistics 

from the NCA attest to that. As at the end of December, 2010, there were about 21,165,843 

subscribers in the country out of a population of 24,920,859. This represents a total mobile 

penetration of 84.9 per cent from a total market share for mobile at 98.7 per cent (NCA Statistics, 

2011).  

The table below depicts statistical figures on variance in the market share of the various 

operators within a period of one year, January – December, 2012. 

Table 2.2: Telecommunication Operators in Ghana 

Operators Feb 2011 Feb 2012 Growth % 

EXPRESSO   226,924 183,670 -1.23 

TIGO 4,135,774 3,693,999 -12.54 

MTN 8,967,067 10,323,334 38.49 

VODAFONE 2,881,215 4,366,536 42.15 

AIRTEL 1,646,501 2,813,598 33.12 

TOTAL 17,857,481 21,381,137 16.48 

 

  Source: NCA Statistic 2012 

 
   



                                                      

3 
 

Despite the development made so far in the telecommunication industry in Ghana, the literature is 

chocked with reports about increasing complaints about the operations of the sector. Customers are 

increasingly not stable with a particular service provider because of poor services, especially 

interconnectivity problems, higher tariffs, poor customer service/care, customer satisfaction, service 

quality, price, corporate/ brand image, promotion, poor network coverage, signal strength, sales 

promotion, customers trust, switching barriers, call quality/ call rates, SMS quality/ GPRS rates, GPRS 

quality/ SMS rates and value added services (Quaye, 2012). 

 

The various complaints revealed had brought about the need for the providers to compete with 

each other for the same target market. Facing the fierce competition, it is more and more 

important for each firm to execute customer loyalty tactics in order to retain its customers, who 

will bring long-term profit and create competitive advantage. But attitude of customers has 

become a compelling factor for operators of mobile telecommunication to strategize their 

marketing efforts to remain in business. It has been a concern for firms in the mobile telephony 

industry to find out how well their services will be preferred to their competitors therefore they 

engage in other promotional activities hoping that they can influence the buying decision of the 

consumer which even though can be achieved, may not guarantee customer loyalty.  

 

The telecommunication industry which is now a booming industry has not only attracted the 

business community, but also academic researchers. Number of studies has been conducted in 

mobile telecommunication industry in different countries, ranging from engineering to marketing 

aspects of mobile services industry. However, only few studies have been carried out in the area 

of customer loyalty in the developing world, especially in the telecom sub-sector in Ghana. In 

Ghana, few researches have been carried out regarding determinants of customer loyalty. Boohe 

& Agyapong (2011) in their study on the determinants of customer loyalty in the 



                                                      

4 
 

telecommunication industry in Ghana looked at factors like service quality, customer satisfaction 

and image which pave way for this study to consider other determinant factors.  

 

(Gerpott et al. 2001) put forward that telecommunication operators lose their customers quite 

regularly due to technological and innovations emerging in the sector. The situation is not 

different in Ghana, as it has become a very challenging task for the mobile telephony operators 

to ascertain the right determinants to adopt to retain their customers. This situation calls for 

effective loyalty strategies in the telecommunication sector that can retain existing customers as 

well as attract new customers toward their brands and creating loyalty. 

 

The recent introduction of the Mobile Number Portability (MNP) in 2011 by NCA, has also 

contributed to the challenge in the mobile telephony sector in determine customer loyalty. It is 

said to be one of the best worldwide and fifth to be introduce in Africa (NCA, 2010). (NCA, 

2011) reported that, by the close of the third month of the inception of MNP, it was possible for 

customers to port successfully within 24hours, only 1% of those who have ported to date have 

done so beyond 24hours. It was stated also that, currently an average porting time takes about 4 

hours, so within 4 hours one can have his/her number ported from one operator to another (NCA, 

2011). NCA, statistics shows that as at the end of August, 2011 – eight week of the 

commencement of the MNP exercise, a total of 64,657 mobile subscribers had taken advantage 

of the MNP system to move from one service provider to another.  This is an obvious indication 

of how customers can easily switch operators if customer‘s loyalty strategies are taking for 

granted. 

 



                                                      

5 
 

Other study elsewhere in Nigeria, Bangladesh and China ascertained that the issue of customer 

loyalty in the telecommunication industry is of great relevance. Notwithstanding the fact that it 

only costs subscribers in Ghana as low as GH₡1.00 to obtain SIM, this facilitates switching from 

one network to another. This unpleasant situation could easily be curbed if the precise 

determinants of customer loyalty are duly identified and used in the mobile telephony sector. 

 

Despite the high number of Mobile Telecommunication service providers in Ghana, complaints 

from customers with regards to their dissatisfaction of provided services have increased in recent 

times. The dissatisfaction of consumers has been attributed largely to poor quality service 

delivery by the operators and it is often highlighted in the media and widely discussed among the 

general public. This scenario was buttressed in a study by (Nimako et al., 2010, Mahmoud & 

Hinson, 2012) on the overall customer satisfaction in Ghana‘s mobile telecommunication 

networks. The study revealed that, irrespective of the efforts by network operators to satisfy 

customers, customer satisfaction was low. (Kotler & Keller 2006, Keller et al., 2011) posited that 

the challenge now is far beyond producing satisfied customers as competitors can do it too; the 

challenge is to produce delighted and loyal customers. Customer loyalty then becomes a 

significant factor in the long-term business performance (Ramneck & Preety, 2009). 

 

As the competitive environment increasingly becomes fierce, the most important issue the 

telecom providers face is no longer to provide excellent, good quality products or services, but 

also to keep loyal customers who will contribute long-term profit to organizations (Kotler 2009; 

Tseng, 2007). This means that for a company to succeed in these fierce competitive market loyal 

customers as a sign of market share is more meaningful and significant than the total number of 

customers. Customer loyalty connotes high entry barriers for competitors to enter the market, 



                                                      

6 
 

and it significantly contributes to reduction in the cost of marketing activities (Ramneck & 

Preety, 2009). This is difficult to achieve in a saturated mobile industry found in Ghana.  

 

These mobile telephony providers are finding it extremely difficult to differentiate themselves. 

All of them are scrambling to earn consumers‘ confidence and trust. Such complexities are 

challenging the business models of Ghana‘s mobile service providers. Evidently, winning over 

new customers through substantial price cuts, promotions, and bundled offerings are 

commonplace for the competition. While this approach may seem viable, it is hurting meaningful 

growth (Quaye, 2012).  

 

It is obvious that the competition in the mobile telephony has brought about innovation into the 

sector, making it more effective and efficient. The industry can now boast of reasonable levels of 

service quality, value-added services and active engagement with, and contribution to society. 

All these are pointing to the fact that attending to the needs, satisfying and gaining the 

confidence of customers breed loyalty and in the long run increases the net worth of an 

enterprise. This was buttress by (Ahn, 2006) that loyal customers will continue to purchase or 

receive the product or service from the same enterprise and they will be willing to pay higher 

prices for the quality products and first-class services, tell others about their experience, thereby, 

increasing sales revenue. 

 

The importance of customer loyalty has been identified by many researchers and academicians in 

different commercial enterprises in the years past (Ahn, 2006; Gerpott et al, 2001; Lee, 2001). 

These relevant researches are no doubt including the telecommunication industry and by 

extension to the Ghanaian telecommunication sector (Boohene & Agyapong, 2011; Henry & 



                                                      

7 
 

Quansah 2013; Quaye, 2012), but different factors and elements were excluded in determining 

customer loyalty in the telecommunication industry which this study propose to consider.  

 

1.2 PROBLEM STATEMENT  

The mobile telephony industry has seen a significant growth which can be associated to 

advancement in technology resulting in fierce competition (Gerpott, Rams, and Schinler, 2006). 

In this fierce competitive era, innovation has been brought to sharper focus, with introduction of 

several services such as international roaming, mobile money, internet facilities, and 

teleconferencing facilities giving customers a range of choices apart from merely making and 

receiving calls (Mahmoud and Hinson, 2012).  

 

This notwithstanding, mobile telecommunications networks in Ghana are buffeted with frequent 

interconnectivity problems and customers continue to raise eyebrows about the service quality 

delivered by these companies (Nimako et al., 2010). There is, therefore, a widespread 

dissatisfaction with the general telecom development in Ghana among users as well as policy 

decision makers and administrators‖ (Frempong and Henten, 2004, p.3). Therefore, at this 

juncture, it is important to ask: What are the causes of this lack of satisfaction among mobile 

telecommunications subscribers in Ghana that led to disloyalty to operators? This study seeks to 

tackle this apparent lacuna in the literature.  

 

The fast growth in the telecommunication has led to robust and cut-throating competition in the 

telecom market of Ghana. As the competition intensifies the onus now lies on the service 

operators to discover the best determinant factors that will ensure that acquired customers are 

retained as loyal customers. The competition is also aggravated by lower switching costs among 

subscribers of the various networks. The lower switching cost in the industry is also due to the 



                                                      

8 
 

introduction of Mobile Number Portability (MNP) by the NCA which manifests in the regularity 

with which subscribers freely enter and leave a particular networks is a major challenge to 

operators. 

 

Again, in terms of financial outlay it costs subscribers as low as GH₡1.00 to acquire SIM and 

this makes it cheaper for subscribers to go across from one network to another. The adverse 

effect of this is the lack of ability of operators to familiarize with the precise determinant factors 

within the telecommunication sector to attain customer loyalty.  

 

With the competition becoming tough, service providers realized that retaining one‘s existing 

customer base is important as much as acquiring of a new customer (Coyles and Gokey, 2005). 

The saturated nature of the telecommunication sector in Ghana makes it more difficult to attract 

new subscribers and necessitate against the need to retain the acquired customers. Long and 

Chun (2004) posited that to compete in this saturated market, mobile telecommunication 

companies need to promote their service quality, but also change their marketing core strategy to 

holding their existing customers by enhancing and optimizing customer loyalty.  

 

Currently, the major challenge managers encountered in the telecom sector in Ghana, therefore, 

is the determination and execution of various elements that will lead to retention of existing 

customers to be loyal customers. As it has been pointed out it is more expensive to win new 

customers than to keep existing ones (Harmozi and Giles, 2004; Pfeifer, 2005).  

 

Review of literatures suggests that different countries have different elements that affect the 

loyalty of their customers in the mobile telecom market. The Ghanaian mobile market is a 

different one (in terms of structure, status and market saturation) and thus, the need to understand 



                                                      

9 
 

the peculiarities of factors on which the loyalty of mobile telecom users in Ghana hinge on. 

Research by (Boohene and Agyemang, 2012) on the determinant of customer loyalty in the 

telecommunication sector in Ghana was focused on factors like service quality, customer 

satisfaction and image even though other variable were considered. 

 

The remainder of this study would theoretically explicate the concept of customer loyalty, review 

the theoretical and empirical literature on its determinants, and then, finally, present a model for 

understanding the route to customer loyalty in mobile telecommunication industry in Ghana.  

 

1.3 RESEARCH OBJECTIVES 

The primary objective of the study is to examine the determinants of customer loyalty in the 

telecommunication industry in Ghana. Specifically, this study sought to: 

 To evaluate the relationship between customer service and customer loyalty  

 To examine  the association between promotion and customer loyalty  

 To access the relationship between value added service  and customer loyalty  

 To examine the relationship between Network Coverage and connectivity and customer 

loyalty  

 To evaluate the relationship between switching cost and customer loyalty  

 To access the relationship between call quality and customer loyalty 

 To evaluate the relationship between network charges and customer loyalty 

 

1.4 RESEARCH QUESTIONS 

The study provides answer to this question;  

 

• How is customer service, promotion, value added service, network coverage, switching cost, 

call quality and network charges related to customer loyalty?  

 



                                                      

10 
 

1.5   RESEARCH HYPOTHESIS  

 

• H1. There is a correlation between customer service and customer loyalty among users of 

mobile telecom in Ghana.  

• H2. There is a correlation between promotion and customer loyalty among users of mobile 

telecom services in Ghana.  

• H3. There is a correlation between value added service and customer loyalty among users of 

mobile telecom services in Ghana.  

• H4. There is a correlation between network coverage and customer loyalty among users of 

mobile telecom providers in Ghana.  

• H5. There is a correlation between switching cost and customer loyalty among users of mobile 

telecom services in Ghana.  

• H6. There is a correlation between call quality and customer loyalty among users of mobile 

telecom services in Ghana 

• H7. There is a correlation between network charges and customer loyalty among users of 

mobile telecom services in Ghana. 

.  

 

1.6 SIGNIFICANCE OF THE STUDY 

The intense competition in the mobile telecommunication sector in Ghana has attracted all the 

attention and debates by managers and academia as regards the ability to help attract and retain 

customers. The determinant factors of customer loyalty that will articulate the needs of mobile 

telecommunication operators in preventing customer from switching has been a cherished dream 

of many enterprises but not much study exist on the part of our country - Ghana. The study will 

provide deep insight into the determinant factors of customer loyalty in the context of the 

Ghanaian Telecommunication industry after thorough review of literature.  

 

The study goes on to emphasize the need for the business community to understand the role of 

customer loyalty in delivering a target market, market share and growth. Therefore the findings 



                                                      

11 
 

of this research work will be very useful to the government and businesses in their role of 

decision making that impact the entire telecommunication industry in Ghana and elsewhere that 

share similar characteristic features with Ghana. The study will also help the NCA to formulate 

policies and also managers of the telecommunication companies to devise better strategies to 

retain their customers.  

 

1.7 JUSTIFICATION OF THE STUDY 

Researches have revealed that Mobile Telecommunication Sectors all over the world faces 

problems of instituting duly customer loyalty programmes that will retain their customer and 

attract new customer.  Various researches have been conducted in different countries mostly in 

the developed countries which identify different factors that affect customer loyalty in the mobile 

telecommunication market. Comparing other mobile telecommunication market situation, the 

Ghanaian market is different in terms of structure, status and market saturation and this call for 

the need to understand the peculiarities of factors on which the loyalty of mobile telecom users in 

Ghana hinge on. Boohene and Agyemang (2012) in their study on determinant of customer 

loyalty in the telecommunication sector in Ghana was focused on factors like service quality, 

customer satisfaction and image even though other variables were also considered. 

 

However, not enough empirical study has been conducted to duly explore the determinants that 

will assist telecommunication operators to build loyal customers in Ghana. It is evidence from 

the above discussions that an immense studies in the other determinant variables need to be 

conducted.  

 



                                                      

12 
 

Hence addressing questions like what factors affect the loyalty of customers in Ghana‘s Mobile 

Telecoms industry and how operators have fared on these factors will be of importance in this 

study.  

 

1.8 ORGANIZATION OF THE STUDY 

For the purpose of the study, the research work will be organized in six chapters. 

i. Chapter one deals with the Introduction, background, problem statement, research 

objectives, research question, hypothesis, significance of the study, justification of the 

study and the organization of the study.  

ii. Chapter two is the review of literature. This considered the theoretical background, 

concept of customer loyalty and its determinants, conceptual framework and hypothesis . 

iii. The third chapter of the study is the research methodology. It discusses the profile of the 

companies in the telecommunication industry in Ghana and how information was 

collected and analyzed to solve the research problem. 

iv. Chapter five is about the findings, analysis and interpretation of data. A discussion 

section was also introduced in order to compare the findings of the study with existing 

literatures.  

v. The last chapter deals with the summary, conclusions and recommendations.  

 

 

 

 

 

 



                                                      

13 
 

CHAPTER TWO 

LITERATURE REVIEW 

 

2.0 INTRODUCTION  

This chapter review related literatures and thus seeks to position the work within the scholarly 

context. The chapter presents the theoretical background, empirical studies and major theoretical 

preferences are illuminated, thereby, bringing out those constructs which are of importance to the 

research. Finally, the focus is on the theories of relationship between customer loyalty and its 

determinants, and ends with the presentation and explanation of the conceptual framework for 

the study.  

 

2.1 THEORETICAL BACKGROUND 

Kotler and Keller (2006) hold that companies recognize the importance of satisfying and 

retaining customers. To them, the following are interesting facts about customer retention, 

acquiring new customers can cost five times more than the cost involved in satisfying and 

retaining current customers, the average company loses10 percent of its customers each year, and 

the retained customer life time value tends to increase.  

 

2.2 THE CONCEPT OF CUSTOMER LOYALTY  

The need for customer loyalty studies has been recognized in the academic field and the business 

world by many scholars for years. Customer loyalty is the establishment and sustainability of a 

long-term relation with the customer that will boost revenue through the life time value of the 

customer. Keeping this long-term relation with their customers is one of the most important 

goals of many companies in the modern business world and the telecommunication industry in 

Ghana cannot be ruled out. Customer loyalty is one of the most frequently discussed subjects in 



                                                      

14 
 

the marketing and service literature (Eshghi et al., 2007; Heskett and Sasser, 2010). In the 

existing literature there is a plethora of definitions of loyalty and/or customer loyalty. Customer 

loyalty is customer repeating purchase intention to some specific products or services in the 

future (Jones et al., 1995). Loyalty is used to describe the willingness of a customer to continue 

patronizing a firm‘s goods and services over a long period of time and on a repeated and 

preferably exclusive basis, and voluntarily recommending the firm‘s products to friends and 

associates (Anderson and Srinivansan, 2003). According to (Anderson and Srinivansan, 2003) 

customer loyalty is also the result of an organization‘s creating a benefit for customers so that 

they will maintain and increasingly repeat business with the organization. From the forgoing, 

loyalty in telecommunication sector is concerned with the length of time and the frequency with 

which customers stay and remain on a network. The longer the time a customer remains on and 

the more frequently a customer patronizes a particular network, the more that customer becomes 

loyal. It is therefore the desire of all telecommunication service providers in Ghana to retain 

large number of their customers on their networks.  

 

Customer loyalty serves as a platform for a company to sustain its competitive advantage 

(Reichheld, 1996 and Lee and Cunningham, 2001). Different researchers have given credence to 

the reason why developing customer loyalty is beneficial to firms, including telecommunication 

operators. As posited by (Reichheld, 1996 and Lee and Cunningham, 2001), developing and 

increasing loyalty is a crucial factor in companies‘ growth and performance. Andres (2007) 

indicates that customer loyalty is one of the key factors and can help a company achieve long-

term success. Fornell (1992) also pointed out that the significance of customer loyalty is that it is 

closely related to the company‘s continued survival and to strong future growth. Hence, for a 

company to maintain a stable profit level when subscription level has reached saturation point, 



                                                      

15 
 

the market is mature and competition is fierce, a defensive strategy which strives to retain 

existing customers is more important than an aggressive one (Fornell, 1992 and Ahmad and 

Buttle, 2002). Ndubisi (2005) and Pfeifer (2005) also posited that the cost of serving a loyal 

customer is five or six times less than a new customer.  

 

Research has shown the importance of loyalty in business enterprises and not excluding the 

telecommunication sector. The facts presented by Schmidt (2006) go as follows: 

• The typical company gets 65% of its business from its existing customers 

• It costs 5 times more to find a new customer than to keep an existing customer happy 

• It takes 12 good service experiences to overcome a single bad one  

• 7 out of 10 customers who switch to the competition do so because of poor service  

• 91% of unhappy customers won‘t buy again from the company that displeased them  

• And unhappy customers will not only defect, they will grumble to 9 of their friends  

 

He, however, continued by writing that:  If an enterprise is rated by a customer as five on a scale 

of one to five, such customer is six times more likely to return than if the enterprise rating is 

four. Also, dissatisfied customers whose complaints are taken care of are very likely to remain 

loyal, and often become ―customer advocates‖ if you go out of your way to fix their problem. All 

these are pointing to the fact that attending to the needs, satisfying and gaining the confidence of 

customers breed loyalty and in the long run increases the net worth of an enterprise. 

 

From the above, it can be noted that a telecommunication operator that promotes customer 

loyalty has a lot to benefit. The current saturated level of the telecom sector and intense 

competition in Ghana has left the operators with no option other than seeking to maintain the 



                                                      

16 
 

existing customers and lock them into loyalty. The majority of the current marketing strategies of 

these operators are aimed at retaining and making customers loyal. 

 

2.3 CLASSIFICATION OF CUSTOMER LOYALTY 

Customer loyalty can be classified into proactive loyalty and situational loyalty. Proactive 

loyalty occurs when a consumer frequently buys a brand and settles for no other substitute while 

situational loyalty exists when the buyer purchases a brand for a special occasion (Oliver,1999). 

Customer loyalty can also be classified as behavior loyalty and the attitude loyalty. Behavior 

centered customer loyalty focuses on the long-term choice probability for a brand, for example, 

repeat purchase probability, while, attitudinal centered loyalty focuses on brand  

recommendations, resistance to superior products, repurchase intention, and so on. (Xu-Xiaoli, et 

al, 2006). 

 

• Behavior Loyalty  

Scholars like (Ehrenberg, 1991; Soderlund, 1998; Ja-Shen Chen et al. 2006.) suggested that 

loyalty refers to customer‘s consistent purchasing behavior. Jacoby and Kyner (1973) opined that 

customer loyalty is the behavioral outcome of a customer‘s preference for a particular brand 

from a selection of similar brands, over a period of time, which, importantly is the result of an 

evaluative decision-making process. But can we equate repurchasing activity of a customer of 

the same brand product to loyalty? Amine (1998) thinks that repurchasing under the two cases 

earlier outlined above cannot be called loyalty purchasing:  

(1) Consumers‘ repurchasing may be due to the consumers‘ tendency to reduce or avoid search 

efforts. There is a high probability of interrupting this consistent buying and switching to another 



                                                      

17 
 

brand at the first opportunity or inducement to do so (price increasing, new brand launching or 

brand out of stock). This kind of repurchasing can be called inertia purchasing. 

(2) When there is a narrow choice in a product category, the repeat purchasing improves too. 

This consistent brand buying may express more inertia or constrained repeated behavior rather 

than loyalty with commitment to that brand. Consumer commitment towards the purchase 

(behavior loyalty) of same brand doesn‘t mean he/she is a loyal consumer.  

 

• Attitudinal Loyalty  

What is attitudinal loyalty? Jacoby and Chestnut (1978) defined it as a customer‘s predisposition 

towards a brand. It is a function of psychological processes. Amine (1998) considers the 

commitment towards a brand as attitudinal loyalty. Baldinger and Rubinson (2001) also believe 

this kind of commitment is a dispositional commitment. Bandyopadhyay et al. (2007) think 

attitude strength of a brand is operationalized by the number of positive attributes associated with 

the brand. (A person has a stronger (or weaker) attitude toward a brand when he/she believes that 

the brand possesses more (or less) positive attributes.) While Rundle-Thiele (2005) use word of 

mouth as a measure of attitudinal loyalty.  

 

• Attitude-Behavior Loyalty  

Behavioral loyalty suggests that the repeated purchasing of a brand over time by a consumer 

expresses their loyalty, while the attitudinal perspective assumes that consistent buying of a 

brand is a necessity but not a sufficient condition to ‗true‘ brand loyalty (Amine 1998). Likewise 

Dick and Basu (1994) precisely proposed that a favorable attitude and repeated purchase were 

required to define loyalty. Behavior loyalty must be complemented with a positive attitude 

towards this brand to ensure that this behavior will be pursued further. Oliver (1999) defines 



                                                      

18 
 

loyalty as a deeply held commitment to re-buy or re-patronize a preferred product/service 

consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, 

despite situational influences and marketing efforts having the potential to cause switching 

behavior. Dick and Basu (1994) state that, ―customer loyalty is viewed as the strength of the 

relationship between an individual‘s relative attitude and their repeat patronage‖.  

 

From the above discussions on classification of customer loyalty, the study looks at loyal 

customer from two aspects: (1) repeated purchasing of the same network products (2) telling 

people about the network services (positive word of mouth). These two are obligatory. Here, the 

word of mouth means the extent to which customers inform friends and family (Rundle-Thiele, 

2005).  

 

2.4 CUSTOMER SATISFACTION AND CUSTOMER LOYALTY 

 Satisfaction is a consumer‘s post-purchase evaluation and affective response to the overall 

product or service experience Oliver (1992). It is considered a strong predictor for behavioral 

variables such as repurchase intentions, word-of-mouth recommendations, or loyalty Eggert and 

Ulaga (2002). Consumer satisfaction is believed to mediate consumer learning due to prior 

experience and to explain key post purchase behaviors, such as complaining, word of mouth, 

repurchase intention, and product usage (Oliver 1980; Westbrook & Oliver 1991). Anderson and 

Srinivasan (2003) suggested that ‗‗a dissatisfied customer is more likely to search for 

information on alternatives and more likely to yield to competitor overtures than is a satisfied 

customer.‘‘ In addition, past research has indicated that satisfaction is a reliable predictor of re-

purchase intentions (Wang et al, 2001). 

 



                                                      

19 
 

2.5 SERVICE QUALITY AND CUSTOMER LOYALTY 

Quality is the comparison of perceived performance and expected performance (Kang, 2006). 

Service quality is the customer‘s overall impression of the relative inferiority/superiority of an 

organization and its service offerings (Bitner et al., 1990). The firm's ability to create and sustain 

competitive advantage depends upon the high level of service quality provided by the service 

provider (Yoo & Park, 2007). Theoretically, positive relationships between service quality, 

customer satisfaction, and customer loyalty are well documented in the extant literature. (Buzzell 

and Gale, 1987; Brown et al.,1992; Zeithaml et al.,1996). Also empirical findings have shown 

positive relationships existing between service quality and customer satisfaction, on one hand 

and between service quality and customer loyalty, on the other hand in a number of industries 

(Zeithaml et al., 2008; Venetis and Ghauri, 2004).  

 

This study appreciate the important of numerous literatures by renowned scholars in relation to  

service quality, customer satisfaction and loyalty, hence factors that are appropriate to the 

telecommunication sector in Ghana also need to be considered. 

 

  

2.6 FACTORS THAT INFLUENCE CUSTOMER LOYALTY 

Customer loyalty is widely accepted by marketers as being something that's worth nurturing, 

with many renowned analysts and researchers repeatedly showing the value of loyalty 

programmes in terms of greater spending and satisfaction, more profitable customer behaviour 

reduced defection levels, and unique competitive advantages. According to (Peter Clark, 2004) 

there are six major factors that play key roles in influencing the loyalty and commitment of 

customers: 

 



                                                      

20 
 

 

 Figure 2.1:  Factors that influence customer loyalty 

 

 

 Source: Peter Clark, 2004  

By his study into the workings of customer loyalty programmes and the ways they can positively 

influence customers' behaviour toward companies revealed that customer retention is not only 

increased but customer lifetime value and profitability is also likely to increase significantly. The 

study identified six factors that influence customer loyalty in various businesses. 

 

 

 

 

2.6.1 Core offering  

The companies that boast the highest levels of fiercely loyal customers have built that loyalty not 

on card programmes or gimmicks, but on a solid, dependable, core offering that appeals to their 

customers. These companies have focused intently on what they know appeals to the type of 

customers they want to attract, and have determinedly concentrated on delivering what is 

expected every time. North American retailer, Nordstrom is well known for the loyalty of its 

customers. It built this loyalty by understanding what its customers wanted and then empowering 

its employees to deliver those needs consistently. 



                                                      

21 
 

Clearly, the data from a good loyalty programme should help the operator to improve this core 

offering by tailoring and molding it more closely to the customers' needs and desires. Elements 

of the core offering that have a large role in building customer loyalty include:  

 

2.6.2 Location and premises 

Location and premises clearly play a part in engendering loyalty. The Three L's of retail - 

"location, location and location" - are undoubtedly important, and attractive and functional 

premises are equally so. 

 

2.6.3 Service  

Whether selling services or products, the level of service perceived by the customer is a key to 

generating loyalty. It can be argued that some customers buy only on price, so all that is 

necessary to retain their loyalty is consistently low prices. To certain extent that is true. But in 

most cases, any loyalty shown will be only to the prices instead of the business. Should a 

competitor offer even lower prices, those customers are likely to defect. Companies that have 

adopted a policy of everyday low prices (EDLP) can be more vulnerable to competition than 

those who have built their customers' loyalty on superior products or service. 

 

2.6.4 The product or service 

The products or services offered must be what customers want. The days when businesses could 

decide what they wanted to sell or supply, and customers would buy it, are long past. The 

customers' needs and wants are now paramount. If you don't meet them, someone else will.  

 

2.6.5 Satisfaction 

Clearly, satisfaction is important; indeed essential. But, taken in isolation, the level of 

satisfaction is not a good measure of loyalty. Many auto manufacturers claim satisfaction levels 



                                                      

22 
 

higher than 90%, yet few have repurchase levels of even half that. The situation is stacked 

against the business: if customer satisfaction levels are low, there will be very little loyalty. 

However, customer satisfaction levels can be quite high without a corresponding level of loyalty. 

Customers have come to expect satisfaction as part and parcel of the general deal, and the fact 

that they are satisfied doesn't prevent them from defecting in droves to a competitor who offers 

something extra. The point is that, while high levels of customer satisfaction are needed in order to 

develop loyal customers, the measure of customer satisfaction is not a good measure of the level of 

loyalty. The two are not measuring the same thing.  

 

 

2.6.6 Elasticity level 

Elasticity expresses the importance and weight of a purchasing decision - effectively the level of 

involvement or indifference. This applies to both the customer and the business. 

 

Involvement: The customer's involvement in the category is important: the more important your 

product or service is to the customer, the more trouble they have probably taken in their decision 

to do business with you, and the more likely they are to stick with what they have decided. Most 

customers would be highly involved in the category when choosing a new car, a new jacket, or a 

bottle of wine. However, when choosing a new pair of shoelaces, involvement is not usually 

high. Businesses dealing in commoditized products and services cannot expect high involvement 

and need to earn loyalty in other ways.  

 

Ambivalence: The customer's level of ambivalence is also important. Few decisions are clear 

cut. There are usually advantages and disadvantages to be balanced, and vacillation is unstable. 

Again, we see that the more commoditized a product or service, the more difficult it is to 



                                                      

23 
 

cultivate loyalty. It is only when points of differentiation are introduced that the customer has a 

valid reason for consistently preferring one particular supplier.  

 

2.6.7  Share of wallet  

As markets become saturated and customers have so much more to choose from, share of wallet 

becomes increasingly important. It is cheaper and more profitable to increase your share of what 

the customer spends in your sector, than to acquire new customers. After all, that's what loyalty 

is really about. Totally loyal customers would give you a 100% share of their spend in your 

sector. 

 

 

2.6.8 The marketplace  

The marketplace is a key factor in the development of loyalty. The elements most closely 

involved are: 

Opportunity to switch: If the number of competing suppliers is high and little effort is required 

to switch, switching is clearly more likely. Conversely, the more time and effort invested in the 

relationship, the more unlikely switching becomes. The level and quality of competition has a 

significant effect on how easy it is for a customer to switch from any one particular supplier. 

When competitors are offering very similar products at similar prices, with similar levels of 

service, some means of useful differentiation has to be found in order to give customers a reason 

to be loyal.  

 

Inertia loyalty: This is the opposite of ease of switching. Most banks enjoy a high level of inertia 

loyalty simply because it's often so difficult and time-consuming to change to a new bank and 

transfer direct debits and standing orders. 



                                                      

24 
 

2.6.9  Demographics  

According to Jan Hofmeyr and Butch Rice (year 2003), developers of The Conversion Model 

(which enables users to segment customers not only by their commitment to staying with a brand 

but also to segment non-users by their openness to switching to the brand), more affluent and 

better educated customers are less likely to be committed to a specific brand. They say that the 

commitment of less affluent consumers to the brands they use is often unusually strong - 

possibly because they cannot afford to take the risk of trying a brand that might not suit them as 

well. They also suggest that younger consumers are less committed to brands than older 

consumers. 

 

Interestingly, these differences carry over into cultural groups as well: they find that French-

speaking Canadians are more likely to be committed to a brand than English-speaking 

Canadians, and Afrikaans-speaking South Africans are more likely to be committed than 

English-speaking South Africans. In their excellent book, Commitment-Led Marketing, they 

show how commitment norms for the most frequently used brand of beer vary from country to 

country. At the two extremes we see both Australia and the UK (58%) and South Africa at 83% - 

a considerable difference.  

 

 

2.7 CHALLENGES OF CUSTOMER LOYALTY 

In developing customer loyalty, service providers face a number of challenges: 

Loyalty may be an unrealistic pursuit where the customers have no underlying need to make 

further purchase of a category of product or service that a company is able to offer. This 

phenomenon is present in much tourism – related businesses in destination of symbolic rather 



                                                      

25 
 

than aesthetic quality. For example, many people make a religious pilgrimage once in their 

lifetime with little incentive to return again. 

 

Legislation has built the confident of consumer which has had the effect of reducing the risk 

associated with buying from previously unknown sources. Legislation has reduced the chances 

of a poor relationship being developed and provided means for compensating consumers who 

suffer loss as a result of failure from their transaction, thereby encouraging greater transactional 

orientation. 

 

Individuals differ in their level optimum stimulation level, implying that some individuals have a 

greater propensity than others to seek out variety or to take risks, compare to those who seek out 

the security and predictability of an ongoing relationship. In a study by Patterson, (2007) it was 

found out that older clients had different motives (social benefit, special treatment, and 

confidence) for staying loyal compared to the younger clients. 

 

For firms the most rewarding relationship with customers results from investment to create 

loyalty, rather than short-term financially based incentives. The excessive use of financial 

incentive to create customer loyalty will place the firm at a cost disadvantage in the market 

where cost leadership is important, while securing little underlying loyalty. In the case of 

airlines‘ frequent-flyer programmes had become part of business traveler‘s customer 

expectations resulting in heavy loss of revenue for airlines. 

  

Much of the literatures on customer loyalty has focused on suppliers‘ need to develop 

relationships (e.g. Day and Wensley, 1983; Webster, 1992) overlooking the perspective of 



                                                      

26 
 

buyers‘ needs or lack of need to develop ongoing relationships. Commitment by one consumer to 

one supplier relationship can imply forgoing alternative opportunities when they present 

themselves. Buyers may deliberately seek to minimize risk of dependency by developing a 

portfolio of suppliers. 

 

Formalize buying processes adopted by big companies and government agencies may prevent the 

development of an ongoing relationship based on social bonds. Tightly supplier-buyer 

relationships, and a requirement for contracts to be re-submitted for tender after a specified 

period, reduce the scope for ongoing socially based relationships to be developed within a 

system of routine competitive tendering.  Loyalty programmes may motivate those who qualify 

for loyalty rewards, but may demotivate others who do not qualify. It is reported that a number 

of grocery retailers have considered adding fast checkouts with shorter queues for their high-

profit customers; similarly to the dedicated check-in areas used by airlines for their business 

class passengers. 

 

 

2.8 EMPIRICAL STUDIES OF CUSTOMER LOYALTY ON MOBILE PHONE  USERS 

Numerous studies have investigated the perspective of mobile phone users with regards to the 

loyalty aspects. These have been discussed in succeeding paragraphs. These studies provide 

insight into the loyalty dimensions that mobile phone operators need to consider in order to 

remaining competitive in this saturated market.  

 

Global System for Mobile (GSM) Communication Association identified a list of indicators for 

mobile phone loyalty of the customer. These indicators included network access, service access, 

service integrity, and service retainability (Sutherland, 2007, p. 20). The findings of the study 



                                                      

27 
 

showed that, service integrity recorded a high indication to foster customer satisfaction and 

influencing loyalty. 

 

In addition, J. D. Power and Associates Survey (2009) studied the mobile phone users‘ loyalty in 

the United Kingdom. The study used a sample of 3325 mobile phone customers throughout 

United Kingdom. Important dimensions of customer loyalty included in the survey were 

coverage, call quality, promotions and offerings of incentives and rewards, prices of service, 

billing, customer, bundled services. The results of the study showed that customers attribute 

loyalty to their service provider when prices of services offered are low, promotions regularly 

organized, as elements with high ratings. The study showed rising customer expectations with 

regards to the additional features and services from the mobile operators.  

 

Based on the survey of 22052 users of wireless phone in the United States in 2008, the Wireless 

Phone Users‘ Satisfaction Index of United States of America indicated that important dimensions 

of customer loyalty included customer satisfaction, billing, brand image; call quality, cost of 

service and options for service plans (Customer Satisfaction Index, 2009). The survey showed 

that apart from brand image rated high, cost of service was an important ingredient in 

determining customer loyalty to the brand, followed by call quality. 

 

Accenture (2008) carried out survey of 4189 consumers in Australia, Brazil, Canada, China, 

France, Germany, India, United States, and United Kingdom. The constructs used for the survey 

involved: cost of mobile devices; mobile gaming, mobile gaming, mobile reading, mobile social 

networking, mobile video, mobile finance, location-based services, and mobile advertising. The 

survey was aimed at investigating the impact of these elements on customer services and 

consequently, customer loyalty. More than 67% respondents confirmed poor customer services 

as the core reason for leaving the operators in relation to all the elements or constructs used for 



                                                      

28 
 

the study. The survey also found the rising expectations of customers in mature and growing 

markets. 

 

In 2008, Telecom Regulatory Authority, in India carried out quality of service survey of mobile 

operators based on users‘ satisfaction. The sample consisted of 1318 mobile phone users. The 

important dimensions of regulatory services benchmark dimensions of loyalty included billing, 

customer care, availability of network, value-added services and pre-sales and sales dimensions. 

Customer care and value added services obtained a high significance and out of 11 operators, 

only five operators achieved the 90% loyalty benchmark (Survey, 2008).  

 

Souki and Filho (2008) carried out a study based on 434 customers in Brazil. The study focused 

on satisfaction of mobile phone users. The results of the study indicated high rating of 

customers‘ services firstly attributing it to, quality of connections, followed by ambience of 

outlets, and the coverage provided.  

 

Barnhoorn (2008) carried out a study in 2008 in South Africa. It indicated the ever increasing 

expectations of customers with regards to the services of mobile phone operators. The salient 

dimension of quality of service accorded priority by mobile phone users included courteous and 

facilitating role of front-line personnel (courtesy), ease of availability for cards and recharge 

services (access), availability of products and services at the company outlets (availability), 

accurate information and facts about services (consistency), affordable prices of the packages 

(affordability), and customized services. Simply, the study found that customized customer 

service had a high significance among the dimensions used for the study. 

 

A study by Sukumar (2007), using a sample of 104 mobile phone subscribers, measured the 

mobile phone users‘ preferences for selection of an operator. The result of the study found 

important dimensions as brand image, customer care, services availability as high indicators for 



                                                      

29 
 

phone users preference, followed by credit facility for connection, deposit amount, and prices in 

that order of priority. 

 

Also, another study of mobile phone customers satisfaction about quality dimensions was 

undertaken in 2006 in Finland and other Scandinavian (Denmark, Sweden) and Baltic (Lithuania 

and Latvia) countries. The important drivers of customers‘ perception of loyalty emerged 

product and service in Scandinavian and Baltic countries. The constructs used were attributes of 

service (price, quality), image of the operators, and value-added services. Pricing of the services 

emerged as the most important dimension of quality (ESPI, 2006) as against a study conducted 

by Sigala (2006) in a study of mobile phone users in Greece which suggested that customization 

of service, pleasing interaction of staff and customers, company‘s image and differentiated 

features were the important dimensions of customer loyalty of mobile phone users. 

 

 

 

In Ghana, a study by Boohene and Agyemang, 2012 also looked at service quality, customer 

satisfaction and image as a factor in determining customer loyalty. Their study adapted the 

SERVQUAL model as the main framework for analyzing service quality. Multiple and logistic 

regression analyses were used to examine the relationships between service quality, customer 

satisfaction, image and customer loyalty. The results indicated that there is a positive relationship 

between service quality and customer loyalty. However, the results show a negative relationship 

between customer satisfaction and customer loyalty, suggesting that customer satisfaction do not 

necessarily lead to customer loyalty. However, the findings of this study showed that service 

quality has the tendency to promote customer loyalty. 

 

 

 



                                                      

30 
 

 

Table 2.1: Empirical Representation of Literature Studies 

 

S/N Name of Author(s) / Year Context of the 

Study 

Constructs Used Findings 

1. Jayantha and Geetha, 2014 Sri Lanka The study examine 

the determinants of 

customer retention in 

the 

telecommunication 

industry. It employed 

the following 

constructs: Customer 

satisfaction, Payment 

Equity, Affective & 

Cumulative 

Commitment, 

Customer Loyalty 

 

The  study found the 

following constructs as 

important and significant 

to influencing customer 

retention: customer 

satisfaction, payment 

equity, 

Effective Commitment & 

Trigger on customer 

retention 

2. Hossain and Suchy, 2013 Bangladesh The study 

investigated the 

determinants of 

customer loyalty in 

the 

telecommunication 

industry of 

Bangladesh using the 

following factors: 

communication, price 

structure, value-added 

service, convenience, 

sales-promotions and 

customer service. 

The findings of the study 

suggested that, five 

factors: 

 Communication, price 

structure, value-added 

services, convenience and 

customer service/care 

have a positive 

relationship with customer 

loyalty, whiles sales 

promotions has a negative 

relationship with customer 

loyalty. 

3. Boohene and Agyemang, 

2012 

Ghana The study adopted the 

SERVQUAL model 

to examine customer 

loyalty 

The findings of the study 

showed that, service 

quality significantly 

influences customer 

loyalty. 

4. Adeleke and Aminu, 2012 Nigeria The study used the 

following factors to 

investigate customer 

loyalty in the 

Nigerian GSM 

market: service 

quality, price, 

The results of the study 

showed that, service 

quality, customer service 

and corporate image were 

important determinants of 

customer loyalty, whiles 

price was insignificant to 



                                                      

31 
 

customer service and 

corporate image. 

influencing loyalty. 

5. Abdul, 2011 Ghana  The constructs used 

for the study were the 

SERVQUAL model: 

Tangibility, 

Reliability, 

Responsiveness, 

Empathy,  and 

Assurance. 

The findings of the study 

revealed that, all the 

factors have a positive 

relationship with customer 

satisfaction and customer 

loyalty 

6. J. D. Power and Associates 

Survey, 2009 

United Kingdom Coverage, call 

quality, promotions 

and offerings of 

incentives and 

rewards, prices of 

service, billing, 

customer, bundled 

services were the 

constructs used form 

the study 

The study found that low 

prices of services and 

frequent promotions 

stimulated customer 

loyalty 

7. Customer Satisfaction Index, 

2009 

United States of 

America 

Customer 

satisfaction, billing, 

brand image; call 

quality, cost of 

service and options 

for service plans 

The survey showed that, 

the factors that recorded 

high marks on influencing 

customer loyalty were 

brand image, followed by, 

cost of service and call 

quality. 

8. Accenture, 2008 Australia, Brazil, 

Canada, China, 

France, Germany, 

India, United 

States, and United 

Kingdom 

The factors used for 

the survey are: cost of 

mobile devices; 

mobile gaming, 

mobile reading, 

mobile social 

networking, mobile 

video, mobile 

finance, location-

based services, and 

mobile advertising 

The survey found that, 

customer service 

provision with regards to 

all the factors used in the 

survey were low. None of 

the factors registered a 

significant level of 

importance to influencing 

customer loyalty. 

9. Souki and Filho, 2008 Brazil The study used 

quality of connection, 

ambiance of outlets, 

and coverage 

provided 

The findings of the study 

showed that, customized 

customer service 

10. Barnhoorn South Africa The study used the 

following factors: 

courteous and 

facilitating role of 

front-line personnel; 

The findings of the study 

showed that, customised 

customer service 



                                                      

32 
 

ease of availability 

for cards and 

recharge services; 

availability of 

products and services 

at the company 

outlets; accurate 

information and facts 

about services; 

affordable prices of 

the packages; and 

customized services 

 

 

Considering the empirical studies of customer loyalty on mobile phone users above, various 

influential determinant factors of customer loyalty were mentioned base on the context of the 

study. It follows that; every contextual environment may have different determinant factors of 

loyalty affecting the telecommunication industry.  

 

In the case of this study on and on the foundation of theoretical backgrounds and argument  

raised from literature, call quality, connectivity and coverage, promotion, network charges, value 

added service, customer support, switching cost have been noted as recurring variables or factors 

that dominate literature on the study of customer loyalty in the telecommunication industry. On 

this assertion, the study sought to employ these factors in the examination of customer loyalty in 

phone usage and telecommunication patronage in Ghana. 

 

2.9 DETERMINANTS OF CUSTOMER LOYALTY IN THE TELECOMMUNICATION         

             SECTOR IN GHANA  

 

Since customer loyalty has become paramount for organizations, a major concern is to find out 

the determinants or drivers of customer loyalty (Kumar et al., 2011). This section discusses the 

seven identified determinants of customer loyalty in the telecommunication industry in Ghana. 



                                                      

33 
 

2.9.1  Customer Service and Customer Loyalty 

Customer service is a process that takes place between a buyer, a seller, and third party and can 

influence demand in the market (Innis and La Londe, 1994). The third party may include 

companies that have been licensed by a marketing company to provide customer service. 

Customer care is used in a wider sense and goes far beyond the traditional role of customer 

service and support; it encompasses all the functions along the entire service delivery value chain 

(Katz et al., 1998). Customer service is a system of activities that comprises customer support 

systems, complaint processing, speed of complaint processing, ease of reporting complaint and 

friendliness when reporting complaint (Kim et al., 2004). Customer service is one of the most 

important considerations in the evaluation of a supplier (Jackson et al., 1985).  

  

A supplier's reputation for good service attracts potential customers and keeps existing customers 

loyal. Good service additionally provides protection from price competition (Hartley, 1989). 

Customer service can produce customer behaviors that can indicate whether a customer will 

remain with or defect from an organization (Zeithaml et al., 1996). Specifically, the intense 

competition among telecommunication operators in Ghana necessitates adoption of different 

customer service techniques to satisfy and retain the customer. The effectiveness of the level of 

customer service will enhance customer retention and reduce switching between and among 

service providers (Oyeniyi and Joachim, 2008). Therefore, customer service includes all help and 

assistance telecommunication operators‘ offer to customers directly or indirectly prior to, during, 

and/or after purchase to provide exciting customer experience with their products (Adeleke and 

Aminu, 2012). If well control, customer support has a potential to offer a competitive edge to 

telecommunication operators and make them to attract and retain customers. Telecommunication 

providers in Ghana make available toll free customer care line, help desk and websites to 



                                                      

34 
 

customers in order to address their complaints effectively. McDougall and Levesque (2000) 

found that all telecommunication service providers in Malaysia differentiate themselves a high 

level of customer service and this has become the most important and significant driver in 

customer satisfaction. Lucas (2005) is of the opinion that by providing excellent customer 

service and dealing with dissatisfaction as soon as it is identified, companies can ensure that 

customers remain loyal and keep coming back. 

 

From the foregoing discussion, telecommunication service operators in Ghana, in addition to the 

provision of a high service quality and offering of an attractive and fair price, should also pay 

more than a passing attention to the delivery of high and effective customer service/support. 

They should invest substantial resources on infrastructure, information technology (IT) and 

human resources that would provide leverage for effective and quality customer service. They 

should remember that the entire idea of customer service in the telecom-sector is about 

delivering exciting customer experience to retain the loyalty of the customer. 

 

2.9.2  Promotion and Customer Loyalty 

Promotion is non-personal but are paid activities of communicative nature done for conveying 

the information from the company to their customer while building a profitable relationship with 

them (Morello, 2012). Promotion or more specifically adverting are the important aspect of any 

growing business. The promotion also creates the impression to the customers that the current 

company has the best product and service available in the market on all aspect whether its price, 

quality, availability or any other related factor. (Chen, 2011).  

 



                                                      

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Advertising, sales promotion and public relations are mass-communication tools available to 

marketers. As its name suggests, mass communication uses the same message for everyone in an 

audience. The mass communication tools trade off the advantage of personal selling, the 

opportunity to tailor a message to each prospect, for the advantage of reaching many people at a 

lower cost per person (Etzel et al., 1997). Today, definitions of advertising abound. We might 

define it as communication process, a marketing process, an economic and social process, a 

public relations process or an information and persuasion process (Arens, 1996).Dunn et al. 

(1978) viewed advertising from its functional perspectives, hence they define it as a paid, non-

personal communication through various media by business firms, non-profit organization, and 

individuals who are in some way identified in the advertising message and who hope to inform 

or persuade members of a particular audience. 

 

Morden (1991) is of the opinion that advertising is used to establish a basic awareness of the 

product or service in the mind of the potential customer and to build up knowledge about it. 

Kotler (1988) sees advertising as one of the four major tools companies use to direct persuasive 

communications to target buyers and public noting that ―it consists of non-personal forms of 

communication conducted through paid media under clear sponsorship‖. According to him, the 

purpose of advertising is to enhance potential buyers‘ responses to the organization and its 

offering, emphasizing that ―it seeks to do this providing information, by channeling desire, and 

by supplying reasons for preferring a particular organization‘s offer. While writing on 

advertising nature and scope, Etzel et al. (1997) succinctly capture all advertising as having four 

features: 

(i) A verbal and or visual message 

(ii) A sponsor who is identified 

(iii) Delivery through one or more media 



                                                      

36 
 

(iv) Payment by the sponsor to the media carrying the message. 

Summarizing the above, they conclude that ―advertising then consist of all the activities involved 

in presenting to an audience a non-personal, sponsor-identified, paid-for message about a product 

or organization‖. Those views of Etzel et al. (1997) coincide with the simple but all-embracing 

definitions of Davies (1998) and Arens (1996). For instance, while Davies states that 

―advertising is any paid form of non-personal media presentation promoting ideas/concepts, 

goods or services by an identified sponsor. Arens expressing almost the same view describes 

advertising as ―the personal communication of information usually paid for and usually 

persuasive in nature about products (goods and services) or ideas by identified sponsors through 

various media‖. 

 

From the foregoing, it could be concluded that the purpose of advertising by telecommunication 

operators is to create awareness of the advertised product and provide information that will assist 

the consumer to make purchase decision, influence consumer not only to purchase but to 

continue to repurchase and eventually develop loyalty. 

 

2.9.3  Value Added Services and Customer Loyalty 

Telecom industry historically, due to its intrinsic monopoly and its tremendous impact on human 

lives, has been a profitable industry. With the beginning of deregulation in 80‘s and advent of 

mobile phones and internet, the telecom industry experienced increased competition. As in the 

beginning of the deregulations due to increased productivity, the revenues of telecom companies 

went high, however, with increased competition, the profit margin of these companies reduced. 

 



                                                      

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The above situation coupled with technological development convinced the mobile phone 

operators to deliver new kind of services in addition to voice services. Mobile phone operators 

for attracting more subscribers and retaining them to be loyal customers, resorted to deliver 

Value Added Services (VAS) including short messaging system (SMS), data transmission and 

internet connection services (GPRS),controlled internet portal, new voice services like voice 

inbox, multimedia messaging services(MMS),videoconferencing , location based service(LBS) 

and TV broadcast on mobile phones. With the delivery of VAS from operators, many 

applications can be developed using these basic services like SMS, MMS, geographic 

positioning and connecting to internet. In this study, some basic services like SMS and mobile 

internet which are delivered from mobile network operators are called Value Added Services or 

VAS. VAS are all those associated services and benefits that are embedded within the primary 

service or product provided by the company to their customers.  

 

The value added services are those interrelated combination of services that further improves the 

quality of the service and product and also add value to the primary product or service of the 

company. The value added service is for the purpose of encouraging the behaviors of the 

customers to do more and more purchase of the primary main offering of the company. 

(Wikipedia, the freeencyclopedia, 2013). According to Amiri and Kian (2012) the competition in 

the telecommunication industry has complicated dimensions; promotional activities e.g. 

advertising can backfire and carry negative effects on the operators market, however, using VAS 

value chain can establish competitive advantage for operators.  

From the above, it is evidence that mobile telecommunication operators providing additional 

value of services to their customers is relevant as loyalty of the customer in the 

telecommunication industry is influenced by such services. 



                                                      

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2.9.4  Network Coverage, connectivity and Customer Loyalty 

The literature on network effects usually distinguishes between two types of network effects: 

direct network effects and indirect effects. Direct network effects refer to the case where users 

benefit directly from other users of the same network. In mobile communications, a direct 

network effect arises when the user can call a larger set of persons. Indirect network effects, on 

the other hand, arise, because bigger networks support a larger range of complementary products 

and services. Network coverage is of very great importance to the service provider to fully make 

sure that their cellular service is available and is also working best in all the places without 

having or causing any troubles to their customers. If the cellular service provider fails to provide 

full exposure coverage in the terms of accessibility through mobile cellular service (Mohd 

Rozhan Nik Ismail, 2010), it will cause the customers to be unhappy and demotivate and 

eventually decrease the loyalty of the customers. 

 

The above discussion on the literature depicts that network coverage and effective connectivity 

plays a major role in determining the loyalty of customer in the telecommunication sector. 

Customers stand to switch to an operator who provides effective and efficient network coverage 

that attracts most of his/her social affiliations. 

 

2.9.5  Switching Cost and Customer Loyalty 

Switching cost had been investigated extensively in literature. It is argued that switching is 

related to poor service quality in banks (Benkenstein and Stuhlreier, 2004); reaction to high price 

(Gerrard and Cunnininggham, 2004); and customer satisfaction (Bowen and Chen, 2001). Some 

other researchers, however, had different argument. There is an argument in literature of the 



                                                      

39 
 

benefits of switching cost to prevent consumers from switching service providers (Ganesh, 

Arnold and Reynolds, 2000; Keaveney and Parthasarathy, 2001). 

 

In many researches, it was found that switching cost has a direct influence on customer 

sensitivity to price level and thus influences customer loyalty (e.g. Eber, 1999; Jones et al., 2002; 

Bloemer et al., 1998; Burnham et al., 2003; Feick et al., 2001). Fornell (1992) also argues that 

switching cost is one of many factors that affect the relationship of customer satisfaction and 

customer loyalty. In other research, it was found that switching cost has a moderator effect on 

customer loyalty that is as switching cost increases, the satisfaction level decreases (Hauser et 

al., 1994). Jones et al., (2000) found switching cost as the antecedent of loyalty for both 

business-to business and business-to-consumer cases.  

According to Andreassen and Lindestad (1997) high switching barriers or lack of real 

alternatives might make the customers loyal. However, switching cost was measured as a uni-

dimensional factor (Hauser et al., 1994). It was realized that switching costs contain 

psychological, financial and procedural sub-dimensions (Aydin & Ozer, 2005). Also, customer 

relationships and switching costs concurrently enhanced customer loyalty (Patterson, 2005). 

Moreover, it has also been found that as customers‘ perceptions of switching costs increase, the 

longer they remain with a particular service supplier (Aydin & Ozer, 2005; Patterson, 2004).  

In terms of classification, Burnham, Frelsand Mahajan (2003), classified switching cost as 

procedural switching costs, financial switching costs, and relational switching costs. These costs 

were found to be negatively correlated to consumers‘ intention to switch service providers. 

Klemperer (1995) developed three types of switching cost: artificial cost, learning cost and 

transaction cost. In utility, however the most appropriate cost is the transaction cost. A consumer 



                                                      

40 
 

must be aware that he can switch service providers before he takes steps. The next step is to 

decide whether to search and then whether to switch. 

 

Empirical evidence, however, showed that reducing customer defections by five per cent 

increased profit by seventy five per cent and those defections have a stronger impact on 

profitability than market share, unit costs and many other factors usually associated with 

competitive advantages (Reichheld and Sasser, 1990). Arasil et al (2005) showed that the 

switching cost factor directly affects loyalty, and has a moderator effect on both customer 

satisfaction and trust. Therefore, switching cost plays a crucial role in winning customer loyalty 

in telecommunication industry. 

 

2.9.6  Call Quality and Customer Loyalty  

As the telephone industry changes, that is, as new technologies and services are added, existing 

technologies are applied in different ways, and new players become involved. Maintaining the 

basic quality of a telephone call becomes increasingly complex (Pracht and Hardman, 2001). 

Although call quality has evolved over the years to be consistently high and predictable, it is now 

an important differentiating factor for network operators to adhere to the relevance of quality of 

call to achieve customer loyalty. Consequently, measuring call quality in a relatively 

inexpensive, reliable, and objective way becomes very important. Call quality means different 

things, depending on your perspective. On one hand, it is a way of describing and evaluating 

speech fidelity, intelligibility, and the characteristics of the analog voice signal itself. On the 

other hand, it can describe the performance of the underlying transport mechanisms (Pracht and 

Hardman, 2001). Call quality is a factor that directly influences customer sensitivity to services 

of network operators which determine customer loyalty. Customers who are affected by poor call 



                                                      

41 
 

quality are likely to switch to a different operator whose call quality is very good and 

satisfactory.  

 

2.9.7   Network Charges and Customer Loyalty 

Price is the amount of money charged for a product or service, or the sum of the values that 

customers exchange for the benefits of having or using the product or service (Kotler and 

Armstrong, 2010). In a competitive market, service providers are expected to compete on both 

price and quality of services and also it is necessary for the service providers to meet the 

consumers‘ requirements and expectations in price and service quality (Melody, 2001). 

Nowadays, due to breathtaking competition, the telecommunication service providers tend to 

offer innovative services as well as competitive prices just to attract handful magnitude of 

customers (Haquea et al., 2011). Price plays a vital role in telecommunication market especially 

for the mobile telecommunication service providers (Kollmann, 2000). The price here is not 

limited to price of a SIM card, but also covers the price of recharge voucher, call rate, SMS 

charge, the Internet charge, price of phones, and so on. A network with lower prices has a high 

tendency to attract a large subscriber base leading to an impressive market and financial 

performance. Kollmann (2000) states that income from the number of call minutes determines 

the basic commercial success for the network providers. He also adds that the success of the 

telecommunication sector in a market place largely depends on continuing usage and pricing 

policies, which need to be considered on several levels. The implication of this is that offering a 

high service quality is not sufficient to attract and retain customers in the telecom market; 

offering the service at an attractive and affordable price is equally necessary to achieve a 

competitive advantage in the market. Specifically, price has been used by all the firms in the 

mobile telecommunication market of Ghana, as a strategic tool both to attract new subscribers 



                                                      

42 
 

and more importantly to retain current ones. In the market, where it is difficult to perceive any 

significant difference in the service quality of most of the mobile telecommunication operators, 

price competition has become widespread and an important competitive tool. However, the 

reality of the price competition in the market is existence of price war with subscribers traversing 

from one network to another to take advantage of the latest price cut, thereby giving no room for 

any loyalty to be developed. The question is can price be used to achieve customer loyalty in the 

telecommunication market? In the study concerning the behavior of mobile telecommunication 

consumers, it was found that the loyalty of individual customers is affected by price 

considerations (Bolton and Drew, 1991). Mobile telecommunication operators charge tariffs that 

are fair and acceptable to their subscribers, taking into cognizance their price sensitivity. This is 

because there is a relationship between the level of customer loyalty and price sensitivity. 

According to Xia et al. (2007) price fairness refers to consumers‘ assessments of whether a 

seller‘s price is reasonable, acceptable or justifiable. Customers are satisfied and become loyal 

when they feel that the price they pay corresponds to the quality of service they receive. Choi et 

al. (2006) found that disloyal customers were more price sensitive, in the sense that changes in 

price motivated them to move to other organizations, whereas loyal customers were not affected 

by price. Martı´n-Consuegra et al. (2007) also found that perceived price fairness influences 

customer satisfaction and leads to loyalty.  

Price is the monetary cost for a customer to buy products or services. It is the critical determinant 

that influences customers‘ buying decision. Customers usually select their service providers 

strongly relying on perceived price. How much consumers are willing to pay differs due to their 

different needs and wants. Thus, the price perceptions to the same service   products may differ 

among individuals. Higher pricing perceived by consumers might negatively influence their 

purchase probabilities (Peng and Wang, 2006). Price perception is also thought to be related to 



                                                      

43 
 

price searching (Lichtenstein et al., 1993). Consumers are likely to be attracted by perceived 

high-quality services at perceived competitive prices during the searching process. 

Oliver (1997) suggested that consumers often judge price relating to service quality, and 

accordingly generate satisfaction or dissatisfaction, depending on the equity principle. If a 

consumer perceives price as fairness, he or she is willing to conduct this transaction with the 

service provider. Based on previous studies, Cheng et al. (2008) proposed that price perception 

can be measured by two dimensions: one is reasonableness of prices, which reflects the way that 

price is perceived by customers comparing to that of competitors; another is value for money, 

which implies the relative status of the service provider in terms of price. In general, high-quality 

services are considered to cost more than low-quality equivalents (Chitty et al., 2007) 

Many researchers have pointed out that price perception influences customer loyalty and trust 

(Oliver, 1997; Peng and Wang, 2006; Cheng et al., 2008; Kim et al., 2008). Customer often 

switches mainly due to some pricing issues, e.g. high price perceived, unfair or deceptive pricing 

practices (Peng and Wang, 2006). Therefore, in order to increase customer loyalty, it is essential 

for telecommunication operators to actively manage their customers‘ price perceptions, e.g. 

carrying out attractive charges, offering reasonable prices mix, lower charges without decreasing 

quality. 

The other variables include the call rates / packages, call quality, SMS rates/ packages, SMS 

quality, GPRS Rates/packages and GPRS quality. All these factors play an important role in the 

building up of the loyalty among the customers of the company. All these variables play essential 

role in impacting