Lowering customer's switching cost using B2B services for telecommunication companies

摘要

A B2B transaction is a transaction between organizations. However, the ripple effects of a B2B transaction can reach the members of the organization and generate additional economic impact. Enterprise LTE (Long term evolution) is a newly introduced B2B service in the South Korean telecommunications market. While it provides secure and fast telecommunications services to businesses, it can also affect the employees' utility in the business, since the service provider can provide a variety of additional services to employees who use the same telecommunications provider for their mobile devices. In this study, we empirically analyze how B2B and Enterprise LTE services affect consumer churn-in in the telecommunications market. We estimate consumer benefit based on the additional services provided after the introduction of the B2B service using conjoint analysis. We also estimate consumer switching cost for changing one's mobile telecommunications service provider using contingent valuation method. By comparing these values, we analyze the switching probability of employees when B2B services are introduced at their workplace. The results show that in order to maximize revenue, considering the revenue gained from new subscribers and from fees for providing additional services, lowering service fees for additional services and maximizing market share are advisable.