Abstract:
In Sri Lanka, telecommunications service industry is a high velocity industry in the current business context
and the mobile phone usage has drastically increased during the last few years. As a result of that number of
service providers entering the field has created an intensified competition. Due to this severe competition,
the service providers face a huge challenge on how to retain their existing subscribers. This is because of
high tendency of customer switching among different service providers. Therefore, this study was focused
on addressing this major issue of customer switching in the mobile phones service industry in Sri Lanka.
The survey method was used to conduct the study and the sample consisted of 280 respondents. A
structured questionnaire was used to collect data. The study was conducted in Southern and Sabaragamuwa
provinces in Sri Lanka at the mid of year 2010. The results show a high propensity of switching among the
service providers in the mobile phone services industry in Sri Lanka. Most of the subscribers have shifted
their first brand. Thus, it was reported that 259 subscribers out of 280 subscribers in the sample have
changed their first brand for various reasons. It was identified that mobile phone subscribers are highly
price sensitive. Therefore, the rates charged are the major concern for their switching decisions. Meanwhile,
many mobile customers have shifted seeking more benefits and convenient services. Further, non-monetary
switching cost plays a major role as a switching barrier over monetary switching costs.
