EconPapers    
Economics at your fingertips  
 

Determinants of subscriptions to communications service bundles and their effects on customer retention in Korea

Moon-Koo Kim, Myeong-Cheol Park, Duk Hee Lee and Jong-Hyun Park

Telecommunications Policy, 2019, vol. 43, issue 9

Abstract: Since bundles provide price discounts to customers and have lock-in effects for businesses in the communications sector, the number of bundle subscribers is rapidly growing in many countries, including Korea. The consumer welfare and economic effects of bundles have been well documented. Existing literature, however, has paid little attention to identifying the facets of benefit and risk that influence subscription, the differences in switching costs between subscribers and non-subscribers, and the relationships among bundle satisfaction, customer retention, and switching costs. To address these gaps, we performed an empirical analysis using survey data from 550 individuals. Our findings show that concerns about lock-in and performance, as well as economic benefit influence subscription to the bundles, and all switching costs are higher for the subscribers than for stand-alone users. Non-monetary switching cost of bundles especially has a moderating effect on customer retention. The implications for regulatory policy and customer strategy are discussed.

Keywords: Service bundles; Bundling; Lock-in effects; Switching costs; Customer retention; Loyalty (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0308596117304408
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:43:y:2019:i:9:s0308596117304408

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic
http://www.elsevier. ... /30471/bibliographic

DOI: 10.1016/j.telpol.2018.10.005

Access Statistics for this article

Telecommunications Policy is currently edited by Erik Bohlin

More articles in Telecommunications Policy from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-05-02
Handle: RePEc:eee:telpol:v:43:y:2019:i:9:s0308596117304408