What makes consumers use VoIP over mobile phones? Free riding or consumerization of new service.

Dong-Hee Shin

Telecommunication Policy, May 2012, Vol. 36 Issue 4

R96001031電管所碩一陳亦宣

Outline

Introduction

Literature Review

Research Model

Study Design

Result

Discussion and Implication

Introduction

Mobile voice over Internet protocol (mVoIP) is an extension of mobility to voice over Internet protocol (VoIP) networks.

The challenge for the mobile operator industry is to deliver the benefits and innovations of IP without losing control of network service.

Such attributes make mVoIP a major rival to the most valuable service in the telecommunications industry and threaten to change the ecology of the global communications industry (Gartner Research, 2009).

Introduction

Despite technological advancements and optimistic predictions, several obstacles hinder the widespread diffusion of mVoIP (Verkasalo, 2008).

1. The most significant hindrance is the lack of a broad range of high-speed data connections to mobile phones.

2. There are some conflicting regulatory issues involved in the diffusion of mVoIP. Ex. network neutrality issues.

3. Many mobile operators have prohibited the use of mVoIP over their mobile networks.

Introduction

In this study, mVoIP issues are investigated from a consumer perspective to give implications for policy and managerial practice. how consumers perceive value how their intentions are formed and developed what cognitive perceptions are fulfilled what factors determine consumers’ usage behavior

Research Questions：•What are the key factors influencing the acceptance of mVoIP? What are the antecedents of consumer intentions? •What policy and managerial implications can be drawn from the user acceptance?

Literature Review

Supply and demand factors

Supply Demand

Facilitating factors

• Rising industry competition

• Pressure to search for new Blue Ocean market

• Rapid technological advancement in mobile technology

Diversified customer preferences

Changing economic situation

Increased expectation on quality

Hampering factors

• Business uncertainty

• Economic fluctuations

• Pricing competitiveness

Excessive competition

Decrease in profit(ARPU)

Commoditization of telephony

Literature Review

SK Telecom

saw sales from voice calls plunge by 16% to stand at 2.7 trillion won.

KT and LG Uplus

saw sales from voice calls fall by nearly 10%.

Source： In-Stat, 2011

mVoIP in Korea

The regulatory bodies are facing bottlenecks over the issue as 3G and WiMax technologies emerge.

Korean telecom operators are moving to restrict smartphone applications from using their networks for free Internet telephony.

Majority of Korean customers (79%) strongly opposes the idea of carriers blocking mVoIP when mobile users are paying more than about $50 a month for all-you-can-use mobile data plans.

A more realistic choice for Korean operators is contracting with mobile VoIP companies to tackle this threat proactively.

Korean mobile operators have faced a problem that voice calls are diminishing due to Internet based call services or text messaging applications for smartphones.

Literature Review

clarifying the antecedents of PU and PEoU in mVoIP identifying context-specific factors of mVoIP discovering the role of quality in mobile services advancing TAM by implicating it for policy guideline

Quality(sources) TAM factor

TRA factor

•Call (De Reuver et al., 2009)

•Service (De Reuver et al., 2009; Negi, 2009)

•Mobility (Mallat et al., 2008)

•Availability (ITU, 2011: Teng & Yu, 2009)

PU

PEoU

Facilitating factors

Quality factors in mVoIP

TAM and the need for a modified framework for mVoIP

Research Model

Call quality

Service quality

Mobility

Availability

(Coverage)

PU

PEoU

Intention

Attitude

H1H1.Attitude toward mVoIP positively influences the intention to use mVoIP.

H2

H3

H2. Call quality has a positive effect on the perceived utility of mVoIP. H3. Service quality has a positive effect on the perceived utility of mVoIP.

Research Model

Call quality

Service quality

Mobility

Availability

(Coverage)

PU

PEoU

Intention

Attitude

H4

H5

H4. Mobility has a positive effect on the PEoU of mVoIP.

H5. Coverage has a positive effect on the PEoU of mVoIP.

H6

H7

H6. PU has a positive effect on the intention to use mVoIP. H7. PEoU has a positive effect on the intention to use mVoIP.

Study Design

Data collection The data were assembled through two rounds of collection.

▪ Online survey▪ Marketing firm The quality of the collected data was verified through

consultations with a private marketing company. The company was asked to collect pilot data(n=94) on the Korean users of mobile Internet service based on the survey questionnaire.

Study Design

Measurement development The variables used in the model are well established in

the Telecommunications and TAM literature. Instrument validity and reliability

Thirty current users of mVoIP participated in two pretests at intervals of one week. The Cronbach’s α ranged from 0.852 to 0.914, suggesting acceptable construct reliability.

The construct validity of the measurement instrument was verified through the use of confirmatory factor analysis (CFA).

Result

Measurement instrument The reliability of the survey instrument was established

by calculating Cronbach’s α as a measure of the internal consistency.

Loading coefficients are above 0.6 which are considered to be fairly significant.

The construct validity of the proposed model is commonly estimated by assessing the item reliability and average variance extracted (AVE).

Result

Structural model

The overall fit of the model is satisfactory, with all of the relevant goodness-of-fit indices greater than 0.90.

The normed valu of 1.98 is well below the benchmark of 3, indicating good overall model performance.As the model shows satisfactory fit indices, the structural model path coefficients can be assessed.

Result The results highlight the significant role of quality in determining users’ PU and PEoU, which in turn directly affect intention.

Discussion And Implication

The findings show that both PU and PEoU have considerable impacts on attitude and eventually intention to use mVoIP.

In particular, it was demonstrated that these TAM factors are greatly influenced by quality; various quality factors play antecedent roles in both PU and PEoU which were identified in the mVoIP context.

Discussion And Implication

Policy implication The results imply that the role of the regulator is to

guarantee the competitiveness of the telecommunication market and to ensure the consumer’s demands. Are there any regulatory barriers for the introduction of mVoIP

that will need to be removed, or, can regulators enable the introduction of mVoIP in other ways?

Are there any anti-competitive barriers restricting the move to mVoIP?

Do regulators have an active role in promoting mVoIP interconnection, or should the move to mVoIP interconnection be left to the general telecom market?

How can consumer trust and security in mVoIP be guaranteed?

Discussion And Implication

Managerial implication The mVoIP service providers should work on raising users’

awareness that mVoIP is available at any time in a ubiquitous basis (perceived availability).

mVoIP vendors should devote additional effort to the systematic management of quality and features. From the findings on PU and PEoU impact usage behavior through intention, it is suggested that vendors should establish consumer perception of mVoIP.

BarriersInadequate quality

Insufficient cost saving

Unconvincing user experience

Users’ expectations

High quality

Services are reliable

Promises and commitments are kept

Thanks for your listening.