Mobile number portability on customer switching behavior: In the case of the Korean mobile market

Abstract

Purpose - This study seeks to investigate the effect of mobile number portability (MNP) on mobile subscribers in Korea by focusing on subscribers' perception and behavior related to MNP. Design/methodology/approach - The study collected data on subscribers who had changed mobile carriers between the beginning of MNP (July 2003) and December 2005. The data were analyzed by statistical analyses such as ANOVA and logistic regression. Findings - Statistical analyses in this study reveal that subscribers perceive the switching barrier still as high, discouraging subscribers from switching carriers. While MNP lowered switching costs considerably, a significant level of switching costs still remains despite MNP. Carriers develop new subscriber lock-in strategies that make them stay with current carriers. In addition, there are hidden costs other than MNP that should burden subscribers with number portaling. Research limitations/implications - The findings imply that the MNP has directly affected the industries to a greater extent than subscribers, which suggests implications for both regulators and industries: how to effectively enforce MNP to achieve the intended goals and how to achieve competitive advantage with MNP. Originality/value - This research is particularly interested in investigating the effect of the introduction of MNP on subscribers' behaviors and perceptions, and therefore their motivations for changing or remaining with mobile carriers (operators) with the introduction of MNP. Although there have been many studies looking at the effect of number portability on competition at the industry level, little attention has been shown on the individual level such as subscribers' behavior or perception.