After passing through the slow evolution process for quite some time, the cellular mobile phone industry is expanding world-wide by leaps and bounds for the past few years.
The total number of cellular mobile subscribers crossed one billion mark in the year 2002 and it is expected that it will reach three billion by the year 2010 crossing the fixed line subscribers in the year 2004.
There are over 800 operators providing this service operating in various technologies.
The GSM technology leads the industry by contributing about 70% of the total market share with about 600 operators throughout the world with majority of the countries having multiple number of operators.
The story of Pakistan is no different from the rest of the world as it is going through the same growth phenomenon.
The number of cellular mobile subscribers, which stood at merely 68,000 in 1996, is close to three million now and is expected to cross fixed line customers in the year 2004.
While the introduction of Calling Party Pay (CPP) regime became the triggering factor, the introduction of competition in GSM service helped attracting the low-end market.
The decreasing prices of handsets and lowering of connection charges broke the entry barrier resulting in swelling subscriber base.
This explosive growth resulted in a number of issues, the major being the quality of service or commonly known as QoS.
It is a multidimensional issue including the following:
-- Technical - which includes, network access, voice quality, call drops and coverage etc.
-- Customer service - which includes, complaint management, help desk facilities, customer access facilities etc.
-- Billing - which includes, transparent call charging systems both for prepaid and post-paid, call details facilities, bill dispatch system, bill collection system etc.
It is observed that in high demand market with monopoly and duopoly situation, the service providers tend to care less about the Quality of Service (QoS), particularly when the switchover is not easy, may it be because of financial barriers or technical constraints.
There are two approaches to tackle this issue, one being strict monitoring and regulatory measures and the other application of market forces.
The earlier approach is useful only for the short-term as the regulator can never have enough resources to operate long-term sustainable monitoring mechanism for multiple operators offering various types of services.
Furthermore, taking corrective measures is never easy, as these are not only time-consuming to ascertain the performance of the operator but also difficult to prove/impress upon to the satisfaction of both the operators and the consumers.
The second approach is more productive in the longer run, where fear of loss of revenue owing to customer churn to the competitor becomes a tool for the provision of better service.
The multiple service providers under the open market environment, where the customer has the right to choose and has ability to switchover, tend to improve their quality of service in addition to keeping their tariff in line with the competitors.
Oftel conducted a survey of cellular mobile subscribers to assess their behaviour in terms of switchover on account of Quality of Service (QoS) in the year 2000.
The subscribers of the following operators were surveyed:
================================= Operator Sample --------------------------------- Vodafone 29% BTCellnet 28% Orange 3% One2One 19% Other 1% =================================
According to the survey results about half claimed to be concerned with quality and coverage and about 36% switched over to other network because of the quality of service issue.
Between 25-40% consumers claimed that factors such as having to change number, prices of other suppliers, and having to buy a new phone would discourage them from switching.
Consumers reported the price as the most important factor when selecting a mobile, primarily the price of calls and the rental charges.
Quality of service was ranked the second most important reason for switchover to other network being more important amongst the larger-income groups.
There are four operators in Pakistan, two of which operate in AMPS technology contributing only to about 25% of the market share, while the other two operating in GSM technology enjoy duopoly situation, having 75% of the market share.
The market is still growing and there is a huge pending demand.
Under the circumstances, the focus of the existing operators is concentrated mainly on increasing their subscriber base affecting the quality of service.
Because of the limited choice of alternate operators in GSM and financial barriers to switch over, the subscribers are compelled to remain stuck to original service provider.
The issuance of two new licences will break the barrier of limited choice of operators.
The existing operators will be bound to improve the quality of their service to expand their customer base and avoid churn to new operators.
However, the market forces can only be successful, if the entry and switchover barriers, particularly the government tax of Rs 2000, is removed.
This will become more effective if the operators are bound to provide seamless call forwarding facility so that the subscribers are able to use alternate network in case they are not satisfied with the service of the exiting operator, but still want to keep the existing number.
As proven through the experience of other countries in case of cellular mobile service and also in Pakistan in the case of Internet and Payphone, it is expected that the market opening process will benefit the ultimate consumer.
The competitive environment will not only force the service providers to lower their tariff, offer value-added services but also improve their quality of service.
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