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Analysis of consumer preferences for mobile telecom plans using a discrete choice experiment

João Confraria, Tiago Ribeiro and Helder Vasconcelos ()

Telecommunications Policy, 2017, vol. 41, issue 3, 157-169

Abstract: In this paper, we present a study of consumer preferences for mobile telecommunications plans and operator characteristics. The objective of the study was to identify consumer preferences for the following characteristics of mobile plans: the importance of using the same provider as friends and family (calling club network effects), the market share of the provider (pure network effects), the length of the commitment period, monthly fee/recharge obligations and per minute call charges for calls made within and outside the provider network. A discrete choice experiment was used as a preference elicitation method and implemented in face-to-face interviews. We present results regarding willingness to pay for the described features as well as their relationship to socio-demographic variables. Consumers are willing to pay 1.3 Euro per month more to reduce the commitment period from 1 year to 6 months and willing to pay 2.5 euros per month more to be part of a larger network. Consumers are also twice as much more sensitive to within-network price variations than extra-network price variations. These results remain unchanged in the sub-sample of those that have internet access suggesting that a web-based surveys are capable of producing unbiased results. The implications of these results for regulatory policy are discussed.

Keywords: Stated preference survey; Discrete choice experiments; Network effects; Experimental design (search for similar items in EconPapers)
JEL-codes: C25 C38 C93 L96 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.telpol.2016.12.009

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