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Mobile Virtual Network Operators acceptance in Egypt
By
Mohamed Sayed Helmy
Supervised by
Dr. Saneya El-Galaly
This paper was submitted in partial fulfillment of therequirements for the degree of
MASTER OF BUSINESSADMINISTRATION(MBA)
at
Maastricht School of Management, MsMMaastricht, The Netherlands
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The Thesis is displayed at the library of the Regional IT Institute to optimize the added-value to the reader and to
leverage his/her knowledge in the subject covered. For further information about the Theses, their contents, value,
grade and overall quality you are advised to contact the Academic Degree Programs Manager.
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ACKNWOLEDGMENNT
I owe all the gratitude to God for putting me on the MBA road and helping me finish it.
The journey was short in time but rich in personal and technical experience, thanks to all my
Father and Mother, myWife and my littleYousseffor their love, patience and support before
and through the MBA time.
Thanks to Dr. Saneya El Galaly, her extra ordinary support, patience and advice enlightened my
way and made this thesis possible; I think she is simply the best supervisor.
I would like to thankAshraf Elsafty my research assistant who pushed me when I was late, and
simplified the difficult areas for me.
Thanks to my friend Khaled Magdy for his support, he is the statistics magician who unlocked
the SPSS for me.
And finally, warm thanks to all professors teachers and assistants at MSM, whom with theirsupport during the past years, I broadened my spectrum of business knowledge.
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ABSTRACT
Mobile Network Virtual Operator is a recent business model in the telecom industry that enables
non telecom players to utilize their brands in the telecom business and resell mobile minutes and
mobile services directly to customers, this model has succeeded in North America, Europe and
few Asian countries but it is not significantly present in the Gulf and north Africa region, and not
in Egypt specifically.
Egypt has many factors that facilitate Mobile Virtual Operators inception, so it is expected itstarts soon, brand owners and business firms that intend to join the mobile business may not
know if customers will have the intention to use mobile services from an absolute non telecom
player that might be a media service provider, a retail chain or even a fashion brand; Objective of
this research is to find out if the Egyptian customers would accept Mobile Virtual Operators
concept.The research uses a model based on constructs from the Unified Theory of Acceptance and Use
of Technology (Venkatesh, 2003) that were adapted for the research topic and local market, and
complemented with components from another use intention model (Mallat, 2008) such as cost
and trust.
This study shows that there are specific factors that affect the customers intention to use theMobile Virtual Operator such as: innovative services and offers, effort expectations, trust and
switching cost.
The outcome of this research means that new virtual operators shall consider offering innovative
services, high quality voice communications, attractive offers; they shall also consider that users
trust in their brand will strengthen their intention to use, and compensate customers for the cost
of switching from their current mobile operator, last but not least virtual operator shall provide
an extraordinary customer care service as it might be a key differentiator against other operators.
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TABLE OF CONTENT
ACKNWOLEDGMENNT ................................................................................................................................IIABSTRACT.....................................................................................................................................................IIITABLE OF CONTENT ...................................................................................................................................IVLIST OFTABLES .........................................................................................................................................VIILIST OF FIGURES ......................................................................................................................................VIIILIST OFABBREVIATIONS ............................................................................................................................IX1. CHAPTER1:INTRODUCTION............................................................................................................. 1
1.1 An overview ................................................................................................................................. 11.2 Problem Definition ..................................................................................................................... 11.3 Research Objective ...................................................................................................................... 11.4 Theoretical Framework .............................................................................................................. 1
1.4.1 Model variables .................................................................................................................... 2Dependent variable ............................................................................................................................. 2Independent variables ........................................................................................................................ 21.4.2 Research assumptions ........................................................................................................ 31.4.3
Research limitations ............................................................................................................ 3
1.5 Research questions ...................................................................................................................... 3
1.5.1 Major questions ................................................................................................................... 31.5.2 Minor questions................................................................................................................... 3
1.6 Research Methodology ............................................................................................................... 41.6.1 Research type ....................................................................................................................... 41.6.2 Sampling ............................................................................................................................... 41.6.3 Data analysis method .......................................................................................................... 4
1.7 Thesis Structure ........................................................................................................................... 52 CHAPTER 2 LITERATURE REVIEW 6
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2.2.2 Technology Acceptance Model ....................................................................................... 112.2.3
Unified Theory of Acceptance and Use of Technology ............................................. 12
2.2.4 Is UTAUT suitable and reliable? .................................................................................... 152.2.5 Mallat Use Intention model ............................................................................................. 15
2.3 Previous research & Cases ....................................................................................................... 172.3.1 Mobile Virtual Operators strategy .................................................................................. 172.3.2 Mobile Virtual Operator services acceptance ............................................................... 182.3.3 Gaps in the research ......................................................................................................... 18
2.4 Local case/Business .................................................................................................................. 182.4.1 Market preconditions ....................................................................................................... 182.4.2 Mobile Virtual Operators in Egypt ................................................................................ 19
3. CHAPTER3:THEORETICAL FRAMEWORK AND RESEARCH DESIGN .......................................... 203.1 Introduction ............................................................................................................................... 203.2 Problem definition .................................................................................................................... 203.3 Research objective ..................................................................................................................... 203.4 Theoretical framework ............................................................................................................. 20
3.4.1 Dependent variables ......................................................................................................... 213.4.2 Independent variables ...................................................................................................... 213.4.3 Moderating variables......................................................................................................... 233.4.4 Research assumptions ...................................................................................................... 233.4.5 Research limitations .......................................................................................................... 23
3.5 Research questions .................................................................................................................... 233.5.1 Major questions ................................................................................................................. 233.5.2 Minor questions................................................................................................................. 233.5.3 Hypothesis ......................................................................................................................... 24
3.6 Research methodology ............................................................................................................. 25
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4.2.1 Variables and Constructs data ......................................................................................... 314.3 Inferential analysis ..................................................................................................................... 38
4.3.1 Reliability tests ................................................................................................................... 384.3.2 Internal correlation analysis ............................................................................................. 404.3.1 Variable correlation analysis ............................................................................................ 434.3.2 Moderating variables......................................................................................................... 44
4.4 Discussion and findings ........................................................................................................... 445. CHAPTER5:CONCLUSION,RECOMMENDATION AND FUTUREWORK..................................... 47
5.1 Recommendations ..................................................................................................................... 475.2 Future work ................................................................................................................................ 48
REFERENCES ............................................................................................................................................... 49APPENDIXA:SMES PROFILES.................................................................................................................. 53APPENDIXB:EXPERTS SEMI-STRUCTURED QUESTIONNAIRE............................................................ 54APPENDIXC: CONSOLIDATED EXPERTS INTERVIEW RESPONSE......................................................... 57APPENDIXD:THE QUESTIONAIRE.......................................................................................................... 61APPENDIXE:OPERAIONALIZATION OF MODEL CONSTRUCTS: .......................................................... 65APPENDIXF:MAPPING OF SPSS VARIABLES TO HYPOTHESIS, CONSTRUCTS, AND QUESTIONNAIRE
QUESTIONS .................................................................................................................................................. 67
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LIST OF TABLES
Table 2.1 - Worldwide MVNO examples................................................................................................. 7Table 2.2 - Technology acceptance sample researches ........................................................................... 9Table 2.3 UTAUT variables & constructs definitions ...................................................................... 13Table 3.1 - Questionnaire mapping of Hypotheses-Constructs-Questions ...................................... 27Table 4.1 - Descriptive Statistics for Services Construct ................................................................. 31Table 4.2 - Descriptive Statistics for Services construct .................................................................. 32Table 4.3 - Descriptive Statistics for Perceived usefulness construct ............................................ 32Table 4.4 - Descriptive Statistics for Offers construct ..................................................................... 33Table 4.5 - Descriptive Statistics for Complexity construct ............................................................ 34Table 4.6 - Descriptive Statistics for Network specifics construct ................................................. 35Table 4.7 - Descriptive Statistics for Social Influence construct .................................................... 35Table 4.8 - Used mobile operators .......................................................................................................... 37Table 4.9 - Reliability reference ................................................................................................................ 38Table 4.10 - Reliability measurements..................................................................................................... 39Table 4.11 - Correlations of Performance Expectancy items .............................................................. 40Table 4.12 - Correlations of Effort Expectancy items ......................................................................... 42Table 4.13 - Correlations of Social Influence items .............................................................................. 42Table 4.14 - Variable Correlarion - Spearman Rho............................................................................... 43Table 4.15 - Hypothesis finding ............................................................................................................... 44Table F.1 - Mapping of SPSS variable to questionnaire items ............................................................ 67
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LIST OF FIGURES
Figure 1.1 - Proposed thesis model ........................................................................................................... 2Figure 2.1 - TRA (Fishbein, 1975).......................................................................................................... 10Figure 2.2 - TPB (Ajzen, 1991) ................................................................................................................ 11Figure 2.3 - TAM (Davis, 1989) ............................................................................................................... 12Figure 2.4 - UTAUT (Venkatesh et al., 2003) ........................................................................................ 13Figure 2.5 - Mallat Use Intention model (Mallat et al., 2008) .............................................................. 16Figure 3.1 - Proposed thesis model ......................................................................................................... 21Figure 4.1 - Descriptive Statistics for Gender ................................................................................... 31Figure 4.2 - Descriptive Statistics for Age .............................................................................................. 31Figure 4.3 - Descriptive Statistics for Job fit construct .................................................................... 33Figure 4.4 - Descriptive Statistics for PEOU construct ................................................................... 34Figure 4.5 - Descriptive Statistics for Social factor construct ......................................................... 36Figure 4.6 - Descriptive Statistics for Trust construct...................................................................... 36Figure 4.7 - Descriptive Statistics for Cost construct ....................................................................... 37Figure 4.8 - Use Intention ......................................................................................................................... 38
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LIST OFABBREVIATIONS
ARPU Average Revenue Per User
FMCG Fast Moving Consumer Goods
HLR Home Location Register
ITU International Telecommunications Union
MCIT Ministry of Communications and Information Technology, Egypt
MOTC Ministry Of Transportation and CommunicationsMSC Mobile Switching Center
MVNE Mobile Virtual Network Enabler
MVNO Mobile Virtual Network Operator
NTIA National Telecommunication and Information Administration
PEOU Perceived Ease of UsePU Perceived Usefulness
VAS Value-Added Service
VOIP Voice Over Internet Protocol
SME Subject Matter Expert
TPB Theory of Planned Behavior
TRA Theory of Reasoned Action
UTAUT Unified Theory of Acceptance and Use of Technology
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1.CHAPTER 1: INTRODUCTION
1.1AN OVERVIEW
Mobile Virtual Network Operators (MVNO) is a new business model that enables brand owners
-who have neither telecom experience nor huge investments- to provide mobile services under
their own brand by using the already established mobile operators network infrastructure in the
backend, this model allows such brand owners to utilize their brand power for marketing mobile
services without the need to invest time and funds to build sophisticated telecom networks.
MVNOs have been in operation over the last decade in Europe, Australia, USA and some Asian
countries, in the past four years two Arab countries have experienced the MVNO, there have
been a specific set of conditions in all the countries were MVNOs have succeeded, such
conditions are available in Egypt, thus it is probable that MVNO business will be established
soon in Egypt, in such case will Egyptian customers accept such model? This is the question
behind this thesis.
1.2 PROBLEM DEFINITION
Egypt is nominated from industry prospective to have new mobile virtual network operators, butit not confirmed if there would be customer intention to use them in case they are launched, thus
it is necessary to check if that intention exists prior to establishing such business in Egypt.
1.3 RESEARCH OBJECTIVE
The objective of this research is to check if the mobile customers in Egypt will accept MobileVirtual Network Operators in case they operate in Egypt.
Knowledge about the user intention will be helpful to business firms to decide if to go in to such
business or not, and if yes, to determine the measures to be taken to satisfy their customers
d
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H1
H3
Figure 1.1 - Proposed thesis model
1.4.1 Model variables
Dependent variable
Intention to use MVNO: it is the customer likelihood of subscribing to MVNO
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Effort Expectancy: is defined as the degree of ease associated with the use of the system
Social influence: is defined as the degree to which an individual perceives that importantothers believe he or she should use the new system.
1.4.2 Research assumptions
Assumption 1: There are no regulatory barriers e.g. exclusivity rights for the incumbent Mobile
operators
Assumption 2: Social and economic factors are assumed constant during the survey
Assumption 3: Research is limited to users who already have a prior experience with mobile
usage
1.4.3 Research limitations
Lim1: Limited to Egypt as applied researchLim2: Research is limited to users who already have a mobile line
Lim3: Geographical coverage in Cairo
Lim4:The theoretical framework is limited to the variables included in the model.
1.5 RESEARCH QUESTIONS
1.5.1 Major questions
MjRQ1: Will the Mobile users in Egypt have intention to use MVNO services?
1.5.2 Minor questions
MinRQ1: Does the Performance Expectancy from an MVNO affect the user intention to usean MVNO?
MinRQ2: Does the user Trust in MVNO affect the user intention to use an MVNO?
MinRQ3: Does the Cost associated with MVNO affects user intention to use MVNO?
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MinRQ9: Does the Gender influence the relation between Performance Expectancy and the
user intention to use an MVNO?
MinRQ10: Does the Gender influence the relation between Trust and the user intention to use
an MVNO?
MinRQ11: Does the Gender influence the relation between Effort Expectancy and the user
intention to use an MVNO?
1.6 RESEARCH METHODOLOGY
1.6.1 Research type
Paradigm: quantitative
Purpose: exploratory, descriptive
Logic: deductiveProcess: Quantitative
Outcome: applied
Time horizon: cross-sectional
1.6.2 Sampling
I - Subject Matter Experts interviews:
Population I
Sampling method: Non-Probability Sampling
Sampling Criteria: Judgmental Sampling
Sample Size: 9
II- Questionnaire:
Population II (for the questionnaire)
Sampling method: Non-Probability Sampling
Sampling Criteria: Judgmental Sampling
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statistical methods used are non parametric Correlation analysis (Spearman Rank) and hypothesis
testing when needed.
1.7 THESIS STRUCTURE
The thesis is delivered in five chapters; Chapter 1 is the introduction providing an overview of
the research, problem definition, and research objective. Then, a brief description of the
theoretical framework, its components, research major and minor questions. Finally the research
type, sampling, and data analysis method used in the research are mentioned. Chapter 2 covers
the state of the art, where relevant theories upon which the researcher will base the research is
shown, including the whole literature review supporting the further research discussions and
analysis; so that the reader will be properly oriented to go further into the research. Chapter 3 is
the theoretical framework: it covers the research design, explained briefly in Chapter one, and
will be interpreted in depth including all justification needed for the relevant models factors, and
the resulting questionnaire and interview questions that will be used to collect data required for
the analysis. Chapter 4 includes data collection, data analysis methods, findings, and
interpretations. Finally, Chapter 5 provides the final conclusion and the recommendations based
on the findings and their interpretations and further research areas to be targeted in the future.
Appendices at the end of the documents provide
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2.CHAPTER 2: LITERATURE REVIEW
2.1 INTRODUCTION & INDUSTRY OUTLOOK
2.1.1 MVNO Definition
Mobile Virtual Network Operator (MVNO) is a new business model that started to appear in the
telecom marker in the past decade.According to the International Telecommunication Unions (ITU) definition, MVNO is an entity
that:
Offers mobile services to customers;
Has it own mobile network code;
Issues its own SIM card;
Operates its own MSC and HLR (not mandatory, it may leave this to the MNO;
Does not have its own radio frequency spectrum. (ITU, ca. 1999)
In other less technical words:
The MVNO is a mobile service provider that does not own a licensed Radio spectrum, may not
have the full network infrastructure; it rather rents capacity or buys wholesale minutes from anestablished mobile service provider and markets it under its own brand name independently from
the main/original provider (Criceli, L. et al., 2009)
There is no strict definition for the borderline for the scope of responsibilities and technical
systems split between the MVNO and an MNO, it can vary from a very thin MVNO that
handles only marketing and reselling of minutes ( so called airtime), or an MVNO that gets moreinvolved in operational aspects and owns its customer care billing systems and even its Value-
Added Services platforms like messaging services, up to a fully fledged MVNO that runs its own
billing and customer care, switching and long distance transmission systems. (Guey Lan Fu, 2007)
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complements the MNO marketing weakness, where MVNOs has all the time to manage their
customer relations and demands with no concern on network management issues in the
background. (Guey Lan Fu, 2007)
2.1.2 Scope of the study
This thesis is evaluating the potential user acceptance or intention to adopt MVNO in case such
business model is introduced in Egypt; user acceptance is approached from a new technology
acceptance prospective
The MVNO acceptance in Egypt can be studied from another prospective not covered in this
thesis- which is the brand extension aspect. MVNOs will be non telecom brand owners that go
probably for the first time- into the telecom business domain, the original brand and its
established reputation will naturally affect the new area they are going into.
2.1.3 Significance of the research
For a business owner or investor, it would be necessary to check and validate the existence of
customer acceptance of that new business model in any target country before launching such
business
2.1.4 Mobile Virtual Operators overview worldwide
MVNOs have started to operate since 2000 in the US, Europe, Australia and some Asian
countries, there have been many brands that went into the MVNO business some of them
succeeded and many failed to continue, it can be noticed that only two countries have launched
MVNOs in the Arab region since 2005
Examples of these MVNOs are listed in Table 2.1. (Telecom Paper website, 2009)
Table 2.1 - Worldwide MVNO examples
MVNO Original brand Countries operating in Target
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Auchan, Super market chain France, Italy
Aldi Super market chain Germany
Sainsbury Telecom Super market chain UK
Tesco Super market chain Ireland, UK
Samatel Solely an MVNO Oman
Reference (Telecom Paper website, 2009)
2.1.5 Mobile Virtual Operators strategies
MVNOs were expected to be the hanging fruit in the Telecom market, high expectations were
marketed by industry specialist and visionaries, especially in markets that have reached a high
level maturity and are saturated or over saturated (Shea, 2005; Kelly, 2006)
To the contrary of these optimistic expectations, MVNO failure stories have started to unfold
here and there, of course the MVNO strategy plays a major role in determining its destiny
MVNO strategies differ according to the market environment, the MVNO brand and the
company vision. Some MNOs prefer to take the easy way and use a cost leadership strategy in
which they buy minutes from the MNO at wholesale rates and resell it to subscribers at a
discounted price, they lower their operating and marketing expenses, usually by offering no value-
added services and little or no options, this model usually targets ethnic groups offering themlower rates for calling their home countries, economy of scale is the only way to make profit
from this strategy i.e. acquisition of significant market share which is not typically easy against the
big operators who have much better financial capabilities and can launch aggressive marketing
campaigns and sustain temporarily losses even for long period in a price war to close down those
small MVNO competitors.Some other MVNOs follow a product differentiation strategy, in which they address a niche
market segment thats willing to pay for specially tailored services that no one else has in the
market (Kumar et al, 2010), example of these MVNO target specific niches are mentioned in
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Business practice proved that the product differentiation strategy and brand utilization give better
chances to sustain the business compared to cost leadership strategy.
2.2THEORIES DEFINED
The objective of this thesis is to assess if the mobile users in Egypt will have the intention to use
mobile services from MVNOs, considering that MVNO will offer new services and advanced
features this literature review will focus on researches and theories related to technology
acceptance, user intention and adoption of new technologies.
Several theories have been developed to study the acceptance, adoption and diffusion of new
technologies;
Theory of Reasoned Action (Fishbein and Ajzen, 1975)
Theory of Planned Behavior (Ajzen, 1991)
Technology Acceptance Model (Davis, 1989)
Unified Theory of Acceptance and Use of Technology (Venkatesh et al., 2003)
Such theories were deployed to examine the acceptance and adoption for mobile services,
examples:
Table 2.2 - Technology acceptance sample researches
Author Year Topic/ Field Applied theoriesFan et al. 2005 Speech interface an
enhancer to the
Acceptance of mobile
Commerce
applications
TAM, and other
factors available in the
literature
Luaren
and Lin
2005 Mobile Banking TPB, TAM, other
factors in theliterature
Marchewka J. T. et al 2007 Educational course
management software
UTAUT
Mallat et 2008 Mobile TAM
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2.2.1 Theory of Reasoned Action & Theory of Planned Behavior
The Theory of Reason Action (Ajzen, 1975) proposes that persons behavior towards a specific
issue depends on three main constructs:
1) Persons behavioral intention, that primarily depends on
2) Persons attitude towards the behavior, and
3) Subjective norms relevant to that specific behavior
Evaluative
aspect of beliefs
about
consequence
Intention
To Use
Actual
Behavior
Normative belief
about what
others expect
Attitude towards
the Behavior
Motivation to
comply with
normative beliefs
Subjective
Norms
Beliefs about
consequences of
engaging in the
behavior
Figure 2.1 - TRA (Fishbein, 1975)
The TRA theory was enhanced later on by its author yielding the Theory of Planned Behavior(Ajzen, 1991), the additional element in the TPB is the perceived behavioral control that affects
the intention and affects directly the behavior itself.
Either of these theories TRA & TPB measure the intention as an intermediate dependent variable,
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Figure 2.2 - TPB (Ajzen, 1991)
2.2.2 Technology Acceptance Model
The Technology Acceptance Model was developed by Davis in 1989 attempting to predict how
much the end user accepts a new technology, TAM is one of the famous models dealing with
technology acceptance; it is considered an adaptation of the theory of reasoned action.
The two main constructs in the TAM are Perceived Usefulness (PU) and Perceived Ease Of Use(PEOU), perceived usefulness represents the degree to which the user feels that using a
particular service/system would enhance his/her job performance, while perceived ease of use
represents the degree to which the user feels that using a particular service/system would be with
minimal effort (Davis, 1989)
The TAM has evolved to the TAM2 by adding the subjective Norms as a new variableaffecting individuals acceptance of technology, it was proven that subjective norms has a
significant effect on the individuals use intention (Venkatesh and Davis, 2000)
Considering the amount of new services and features that an MVNO will be offering as indicated
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Figure 2.3 - TAM (Davis, 1989)
2.2.3 Unified Theory of Acceptance and Use of Technology
The UTAUT (Venkatesh et al., 2003) was an attempt to construct a single model combined from
the available technology acceptance models at the time of its development; it considered the
conceptual and empirical similarities; and inherited the core constructs and the moderating
variables from these models and theories:
Theory of reasoned action
Theory of planned behavior
Technology acceptance model
Motivational model
Technology acceptance model combined with the theory of planned behavior
Model of PC utilization
Innovation diffusion theory
Social cognitive theoryThe UTAUT model proposes three direct determinants of intention to use:
Performance expectancy
Effort expectancy
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Gender
Age
UTAUT model is depicted in Figure 2.4
Figure 2.4 - UTAUT (Venkatesh et al., 2003)
UTAUT constructs are listed in Table 2.3
Table 2.3 UTAUT variables & constructs definitions
Construct DefinitionPerformance ExpectationsPerceivedU f l
The degree to which a person believes that using a particular system wouldh hi h j b f
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understand and use.Ease of Use The degree to which using an innovation is perceived as being difficult to
use.Social InfluenceSubjective Norm The persons perception that most people who are important to him think
he should or should not perform the behavior in question.Social Factors The individuals internalization of the reference groups subjective culture,
and specific interpersonal agreements that the individual has made withothers, in specific social situations
Image The degree to which use of an innovation is perceived to enhance onesimage or status in ones social system.
Facilitating ConditionsPerceived BehavioralControl
Reflects perceptions of internal and external constraints on behavior andencompasses self efficacy, resource facilitating conditions, and technologyfacilitating conditions.
Facilitating Conditions Objective factors in the environment that observers agree make an act easyto do,including the provision of computer support
Compatibility The degree to which an innovation is perceived as being consistent with
existing values, needs, and experiences of potential adopters
Effect of moderating variables:
According to UTAUT: Age, gender, and experience were found to have effect on the strength of
the relationship effort performance expectancy and behavioral intention; age and gender
contribution was much significant than experience moderator that was found to be non
significant moderator.
All moderating variables were found to be non significant in affecting the relationship between
social influence and behavioral intention
Thus in this research the moderating variables will be limited only to age and gender
The UTAUT model does not consider the cost, trust and risk as independent variables affecting
intention or usage behavior
The UTAUT was developed in an organizational environment, Venkatesh study examined four
population groups of individuals that worked in four different organizations; some researchers
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2.2.4 Is UTAUT suitable and reliable?
The UTAUT was used extensively in measurement of usage intention for new technologies;
UTUAT was used successfully in studying the adoption of mobile services (Carlsson C., 2006;
Marchewka J. T. et al, 2007); it was used specifically in studying MVNO acceptance by (Dong-
Hee Shin, 2010) who proved that the model is valid for this research topic in the US market.
The UTAUT was proven to be usable across different cultures in North America, East Europe,
West Europe, Asia, and Middle East; and it can survive translation and being ported to different
languages Arabic, English, French, Malay, Czech, Dutch, and Greek (Oshlyansky L. et al., 2007);
thus it would be safe to use the UTAUT model in this research in Egypt
The UTAUT has been proven to valid, reliable and suitable for studying technology adoption in
many researches (Anderson, J. et al., 2004; Lin, K., 2005; Rosen, P., 2005)
2.2.5 Mallat Use Intention modelAnother model consolidation attempt was done by Mallat et al. (2008, pp.5765) to build a model
based on the constructs of two theories in the information systems adoption literature: TAM and
IDT, The result was the following model depicted in Figure 2.5. This model was used to study
the adoption of mobile ticketing in public transport in Finland, components of this model are:
Compared to UTAUT, this model accommodates few extra variables: Cost, Trust, Risk, Usecontext and mobility which are relevant to the mobile service context (Mallat et al., 2008).
This model have been used to examine the mobile ticketing adoption in Finland Mallat, 2008)
and also in an another research in Iran (Babaee N., 2010), in which the prior experience was the
most effective factor in the use intention, and afterwards came risk, perceived usefulness, ease of
use, trust, use context, and mobility at lower level of importance, then at last came the attitude,social influence, compatibility and cost.
Cost
Despite the cost is not a common construct in the technology acceptance research area, it was
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or service provider on the other side (Pavlou, 2003; Mallat et al., 2008). Moreover, the user has to
surrender personal sensitive information such as his/her home address, phone number(s), and
credit card number (Grabner-Krauter and Kaluscha, 2003).
Trust in other parties is announced to be a set of persons beliefs or perceptions about the trusted
party characteristics that indicate trustees behavior, such beliefs include evaluation of the trusted
partys capabilities, benevolence and integrity (Bhattacherjee A., 2002)
The following limitations have to be noted regarding this model:
Only the direct relationships between the eleven variables and the use intention, while the
interdependencies between all the eleven variables were not hypothesized nor tested
The whole model was used only in the mobile ticketing field
2.3PREVIOUS RESEARCH & CASES
Many theories and models were used to study diffusion and acceptance of new brands and/ornew technologies in various conditions, in quest for finding a model to answer the question of
this research, previous work is reviewed in this chapter.
2.3.1 Mobile Virtual Operators strategy
MVNO is one of methods to increase competition in the telecom market and accordingly boost
its economy, according to Taiwan Ministry of Telecommunications, every one Dollar invested in
the telecommunication field results in an overall multiple effect of 2.89 Dollar increase in the
GDP (Taiwan MOTC, 2007)
Important factors are recommended to be considered for the success of an MVNO, and actually
to telecommunication business in general:
Social aspect: more communication facilities available to everyone will help reducing the digital
divide, digital divide is the gap that exists between people in different geographical or economical
conditions in a having access to national information and resources (US NTIA, 1999)
E i li h l i di ifi i f l dd d i h i h i
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2.3.2 Mobile Virtual Operator services acceptance
One research done by Dong-Hee Shin in 2010 focuses on the customer acceptance for services
provided by the MVNO, not actually focusing on the technical aspects of these services or the
success factors of MVNO but rather on the end user acceptance for MVNO itself.
In that research, UTAUT model was applied to measure the use intention and the use behavior in
the US market, it is worth mentioning that the MVNO industry is one of the first and biggest
MVNO markets in the world (TeleGeography, 2008).
As the most relevant research paper to this thesis, it is worth to demonstrate its conclusion,
Dong-Hee Shin results show that perceived usefulness and perceived ease of use are the two
main variables affecting user intention, and then comes the switching cost in the next level
affecting the intention; the results show as well that actual usefulness and actual ease of use are as
important as the perceived features (Dong-Hee Shin, 2010)
2.3.3 Gaps in the research
As presented so far, many researchers have studies the MVNO from different aspects such as:
Competition and relation MVNO & MNO (Criceli, L. et al., 2009; Chyan Yang et al, 2005),
MVNO Success factors (Guey Lan Fu, 2007), regulatory rules, entry barriers and marketing
strategy recommendation (Kumar, 2010).However, Very few researches were found analyzing the customer acceptance for the MVNO, up
to the researchers accessible libraries and databases, one recent research was found that tried to
study MVNO business from customer acceptance prospective (Dong-Hee Shin, 2010)
2.4LOCAL CASE/BUSINESS
2.4.1 Market preconditions
In most of the markets where MVNO business has been established and sustained, the following
factors were identified:
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Many untapped customer segments.
Appearance of market failure symptoms due to lack of competition and collusion among
service providers.
First MVNO entrants acquired a decent market share compared to late entrants and
copiers.
Typically, two or three MVNOs are dominating this segment
MVNO are not directly competing with MNO in the same service portfolio, they rather
offer services that complement them (Kumar, 2010).
2.4.2 Mobile Virtual Operators in Egypt
In Egypt, ethnic MVNO is not feasible marketing strategy due to unavailability of significant
ethnic niches that can be exclusively addressed in separate ghettos or communities, in contrast to
other immigration countries like Canada or Australia that receives around 250,000 persons yearly
from 200 countries (CIC Canada, 2010)
However, With reference to the preconditions mentioned in section 2.4.1, Egypt is in a good
position to start the MVNO business for the following reasons:
Economy of scale, the high population is a potential for high number of subscriber
Segmentation, availability of different customer segments and
Very high penetration (91%) (MCIT, 2011)
Three incumbent mobile operators
Advanced regulatory body (currently studying the issue)
No MVNOs established yet
Good growth rate of GDP
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3.CHAPTER 3: THEORETICAL FRAMEWORK AND
RESEARCH DESIGN
3.1 INTRODUCTION
MVNO business model have succeeded in Europe, Australia, USA and some Asian countries,
typically in countries of high mobile penetration rate and other specific conditions (refer to
section 2.4.1), some Arab countries and specifically Egypt has many of the preconditions to have
such business model. Nevertheless, almost none of the Arab countries have an established
MVNO business except Oman and Bahrain.
MVNOs are sometimes perceived as inferior in quality to the MNOs due to their brand names
that are not associated with the telecom industry, actually in most cases MVNOs offer new
services or specially designed services to target niche customer segments, while in fact, an
MVNO uses the very same radio network infra structure of an MNO
Thus it is probable to have customer negative perceptions or even rejection to MVNOs in case
they decide to operate in Egypt, accordingly, this thesis will try to explore if the Egyptian
customer will have intention to use the MVNO.
3.2PROBLEM DEFINITION
Egypt telecommunication market is well prepared and qualified from industrial point of view to
have new mobile virtual network operators, however it is not confirmed yet if consumers will
accepts such new model of mobile operators
Thus it is necessary to check if there would mobile users acceptance for MVNO prior toestablishing such business in Egypt.
3.3RESEARCH OBJECTIVE
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the model was enriched by variables from Mallat model that has been supported by the SME
recommendations.
The proposed model for this Thesis is depicted in figure Figure 3.1 - Proposed thesis model:
H1
H3
Figure 3.1 - Proposed thesis model
3.4.1 Dependent variables
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Defined as: The degree to which a person believes that using a particular system would enhance
his or her live. (Venkatesh 2003)
Job FitDefined as: How the capabilities of a system enhance an individuals job performance.
(Venkatesh 2003)
Services
The MVNO provides innovative services that meet the mobile users needs
Network SpecificsThis construct relates to the network related attributes of the MVNO
Offers
This construct relates to the commercial offers provided by the MVNO
VAR (X2): Trust
Defined as: The user confidence to surrender their own personal data to a remote party, trusting
that such data will not be misused
VAR (X3): Cost
Defined as: The degree to which an individual believes that switching service providers would
incur certain cost to him or her (Shin et al, 2008).
VAR (X4): Effort Expectancy
Defined as the degree of ease associated with the use of the system (Venkatesh 2003), it consists
of two constructs
Perceived Ease of Use
Defined as: The degree to which a person believes that using a system would be free of effort.
(Venkatesh 2003)
Complexity
Defined as: The degree to which a system is perceived as relatively difficult to understand and use.
(Venkatesh 2003)
VAR (X5) S i l i fl
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Defined as: The degree to which use of an innovation is perceived to enhance ones image or
status in ones social system. (Venkatesh 2003)
3.4.3 Moderating variables
VAR (M1): Age
VAR (M2): Gender
3.4.4 Research assumptions
Assumption 1: There are no regulatory barriers e.g. exclusivity rights for the incumbent Mobile
operators
Assumption 2: Social and economic factors are assumed constant during the survey
Assumption 3: Research is limited to users who already have a prior experience with mobile
usage
3.4.5 Research limitations
Lim1: Limited to Egypt as applied research
Lim2: Research is limited to users who already have a mobile line
Lim3: Geographical coverage in Cairo
Lim4:The theoretical framework is limited to the variables included in the model.
3.5RESEARCH QUESTIONS
3.5.1 Major questions
MjRQ1: Will the Mobile users in Egypt have intention to use MVNO services?
3.5.2 Minor questions
MinRQ1: Does the Performance Expectancy from an MVNO affect the user intention to use
an MVNO?
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MinRQ8: Does theAge influence the relation between Effort Expectancy and the user
intention to use an MVNO?
MinRQ9: Does the Gender influence the relation between Performance Expectancy and the
user intention to use an MVNO?
MinRQ10: Does the Gender influence the relation between Trust and the user intention to use
an MVNO?
MinRQ11: Does the Gender influence the relation between Effort Expectancy and the user
intention to use an MVNO?
3.5.3 Hypothesis
H1o: There is no relationship between the user Performance expectancy from the MVNO and
the user intention to use its service
H1a:There is a positive relationship between the user Performance expectancy from theMVNO and the user intention to use its service
H2o:There is no relationship between the user Trust in the MVNO and the user intention to
use its service
H2a: There is a positive relationship between the user Trust in the MVNO and the user
intention to use its service
H3o: There is no relationship between the Cost associated with switching to MVNO and the
user intention to use its service
H3a: There is a negative relationship between the Cost associated with switching to MVNO and
the user intention to use its service
H4o: There is no relationship between the Effort Expected by the mobile user and the user
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H6o: TheAge has noinfluence on the relation between Performance Expectancy and the user
intention to use an MVNO
H6a: TheAge does influence on the relation between Performance Expectancy and the user
intention to use an MVNO
H7o: TheAge has noinfluence on the relation between Trust and the user intention to use an
MVNO
H7a: TheAge does influence on the relation between Trust and the user intention to use an
MVNO
H8o: TheAge has noinfluence on the relation between Effort Expectancy and the user
intention to use an MVNO
H8a: TheAge does influence on the relation between Effort Expectancy and the user intentionto use an MVNO
H9o: The Gender has noinfluence on the relation between Performance Expectancy and the
user intention to use an MVNO
H9a: The Gender does influence on the relation between Performance Expectancy and theuser intention to use an MVNO
H10o: The Gender has noinfluence on the relation between Trust and the user intention to use
an MVNO
H10a: The Gender does influence on the relation between Trust and the user intention to use
an MVNO
H11o: The Gender has noinfluence on the relation between Effort Expectancy and the user
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The logic of this thesis is deductive, as the proposed model was built using established theories
i.e. UTAUT and factors from Mallat
The used process is Quantitative and the outcome is applied, the findings is a set of
recommendations for telecommunication business entities and investors
Time horizon of this thesis is a cross-sectional study
3.6.2 Data collection instrument and source
I - Experts interviews:Interviews were conducted with Subject Matter Experts (SME) to investigate the following issues:
Check that Egypt is a good candidate for MVNO business since such business model is
not present in Egypt yet.
Check that the UTAUT model components are suitable for the Egyptian environment,
Mobile market and the MVNO topic Explore if any additional variables or items need to be considered in the study for
MVNO acceptance in the market.
Collect the items corresponding to constructs that might influence the customer intention
to use an MVNO
The SME interview questionnaire is detailed in Appendix B: Experts Semi- Structuredquestionnaire.
II- Questionnaire:
A self administered questionnaire was used in this thesis; the questionnaire was launched and
administered on the Internet to
The respondents were targeted through e-mail chains to friends, relatives and co-workers andsocial networks
A first pilot questionnaire was sent to 5 persons; individual comments were collected from them
via e-mails or phone calls regarding unclear questions or typing corrections, enhancements were
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Table 3.1 indicates the mapping allocation of questionnaire questions to each Hypothesis and
construct
Table 3.1 - Questionnaire mapping of Hypotheses-Constructs-Questions
Research
QuestionHypothesis
Model
Variables
Construct Questionnaire
questions
MinRQ1 H1 Performance Expectancy Services 1-12
MinRQ1 H1 Performance Expectancy Perceived
Usefulness
13-14
MinRQ1 H1 Performance Expectancy Job fit 15
MinRQ4 H4 Trust Perceived Easeof Use
16
Performance Expectancy Network specific 17-20MinRQ3 H3 Performance Expectancy Offers 21-22
MinRQ4 H4 Trust 23MinRQ4 H4 Effort Expectancy Complexity 24-26
MinRQ5 H5 Image 27-28
MinRQ5 H5 Social Influence Social factor 29
MinRQ3 H3 Cost Cost 30
MjRQ1 Behavioural Intention 31
3.6.3 Sampling methods
I - Subject Matter Experts interviews
Population I
Sampling method: Non-Probability Sampling
Sampling Criteria: Judgmental Sampling
Sample Size: 9
Th f ll i i i d f l i h SME
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The interviews were done by the researcher himself according to planned meetings with the
SMEs at their convenience, SME were offered the choice to mention their names or to stay
anonymous in the thesis document.
The interviews were semi-structured, they were guided by the main constructs of the UTAUT i.e.
performance expectancy, effort expectancy, and social influence.
Interviews lasted from 30 to 45 minutes, ended with grateful thanks from the researchers
II- Questionnaire
Population II (for the questionnaire)
Sampling method: Non-Probability Sampling
Sampling Criteria: Judgmental Sampling
Sample Size: 96
The target population for this thesis satisfies the following criterion:Egyptian or foreigner, resident in Cairo, has internet access, own a mobile line, and above 14
years of age.
17.8 Million People are residents in Greater Cairo area (Maps of World, 2010; Wikipedia, 2010).
32.7% of Egypt population is below 14 years old (CIA fact book, 2011), this leaves 67.3% above
14 years old.Mobile penetration in Egypt is 91% (MICT, 2011), Actually the real mobile penetration might be
a bit less than 91% due to the multi SIM phenomena whereby some persons owns more than one
SIM card (mobile line) from different operators which leads to some inflation in the penetration
rates, this penetration ratio will be adjusted by -10% which is the minimum over inflation in the
middle east mobile markets, so it will be assumed as 81%.
Nationality: Egyptian or resident foreigner
Has Internet access, Internet penetration is around 29% in Cairo (MICT, 2011),
Population = 17.8 * 0.81 * 0.67 * 0.29 = 2.8 Million
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considered according the majority response i.e. answer was obtained more than 4 times. Answers
for the open ended questions were summarized, only the items that were mentioned by at least
half of the sample were listed in the summary.
II - Questionnaire
The software to be used for data analysis is SPSS V15, applying descriptive and inferential
analysis techniques, questions in the questionnaire are using a 5-point Likert-scale (1 = strongly
agree, 5 = strongly disagree) is used (Parasuraman, 1991),
Descriptive Analysis
Cronbachs alpha will be used for reliability tests within each variable
Also, some descriptive techniques will be used such as frequency tables, histograms and ranking
tables for mean values to describe the responses collected and the meaning of such
Inferential Analysis
Non-parametric tests will be used to test the model hypothesis and answer the research questions,such as Spearman rank association, hypothesis testing, based on the type of variables used in the
questionnaire (ordinal variables).
Spearman rank association was used to judge whether each variable constructs are
correlated.
Hypothesis testing will be used for variables that contains only one itemThe probability (sig.) will be compared to a 5% significance level.
Table 3.1: Data Requirement Table
Variable Type ariables Hypothesis Source Type Scale
INDEP X1 Performance Expectancy H1 Primary Quantitative Ordinal
INDEP X2 Trust H2 Primary Quantitative OrdinalINDEP X3 Cost H3 Primary Quantitative Ordinal
INDEP X4 Effort Expectancy H4 Primary Quantitative Ordinal
INDEP X5 Social influence H5 Primary Quantitative Ordinal
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4.CHAPTER 4: DATA ANALYSIS, FINDING AND
DISCUSSION
The first phase of data analysis was preliminary investigations to verify or enrich the proposed
model via semi-structured interview with subject matter experts
In the second phase the questionnaire was done to measure the customers intention to use
MVNO.
The survey was launched through the Internet with invitations via e-mails and social networking
channels starting from March 14th 2011 till April 4th 2011; the collected feedback was from 197
respondents; only three responses had invalid response.
4.1 EXPERTS INTERVIEW
SMEs defined the items to be measured under each construct of the UTAUT model, and
recommended that constructs: Extrinsic Motivation and Outcome Expectations are not relevant
to the thesis topic or the Egyptian market, and advised to replace the Relative Advantage
construct by three constructs: Services, Network specifics, Offers and proposed two new
variables: Cost and Trust.
For detailed expert interview feedback, refer to Appendix C: consolidated Experts interview
response Appendix C: consolidated Experts interview response
4.2DESCRIPTIVE ANALYSIS
4.2.1 Demographic data
More males (169) than females (25) have participated in the study (see Figure 4.1) Ages are
ranged along four groups: none of the respondents was below 20, 104 respondents belong to (20
to 35) group, 88 belong to (35 to 50) group and only 2 belong to (above 50) group (see
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Figure 4.1 - Descriptive Statistics for Gender
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Table 4.2 - Descriptive Statistics for Services construct
MeanTraffic information service 1.70Cheap voice calls over the Internet 1.72Broadband (Internet & Data) 1.78Bills payment 1.81Family offers 1.86Customer care 1.93
Advertisement SMS blocking 1.98
Roaming services 2.01Mobile Handsets 2.19Personal assistance service 2.22Personalized information service 2.24Events service 2.36
Valid N (listwise)
According to Table 4.1, the items that scored higher than in the Services construct are (in
descending order):
Traffic information service that tells me about crowded or closed roads
Cheap voice calls over the Internet (like Skype)
Broadband (Internet & Data)
Payment for bills from my mobile, example: Electricity, Water bills
Family offers (one package for all family lines with free family calls
Customer care solves my problems quickly with no hassle
Protection against unwanted advertisement SMS
2) The Perceived Usefulness construct:Table 4.3 - Descriptive Statistics for Perceived usefulness construct
Mean
I think that the MVNO services can be useful 1.98I believe that the MVNO services are useful enough to make me willing 2.30
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Figure 4.3 - Descriptive Statistics for Job fit construct
According to frequency chart in Figure 4.3; the majority of the respondents believe that the
MVNO services will fit/meet their lifestyle requirements so that they will be willing to use it.
4) The Offers construct:Table 4.4 - Descriptive Statistics for Offers construct
Mean
MVNO Offers me to gain points on its loyalty card every time I refill mymobile
1.79
MVNO gives bundled offers on their original brand products 1.92According to Table 4.4 the respondents; both types of offers affect the respondents intention to
use the MVNO services. But the offer to gain points on the respondents loyalty card has a
higher effect than that of the bundled offers on their original brand products.
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Figure 4.4 - Descriptive Statistics for PEOU construct
According to Figure 4.4, the respondents answers to whether or not they would use MVNO
new services even if they seem more difficult to use compared to traditional mobile services are
scattered. This indicates that this factor doesnt determine the respondents intention to use the
MVNO services alone if it actually affects the respondents intentions.
2) The Complexity construct:
Table 4.5 - Descriptive Statistics for Complexity constructMean
I would use MVNO if I can Subscribe or unsubscribe from MVNO services and offers insimple and easy steps
1.92
I would move my subscription to an MVNO if I can keep my current mobile number 1.97
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Table 4.6 - Descriptive Statistics for Network specifics construct
Mean
StatisticNetwork coverage 1.55High quality voice 1.63Call continuity (call never drops) 1.82Name of MNO behind the MVNO 2.28
Valid N (listwise)
According to Table 4.6 - Descriptive Statistics for Network specifics construct
Respondents agree more to these three items: Network coverage, Voice call quality and call
continuity rather than actual mobile operator that provides the network
It is interesting to note that for the item V22: I dont care about which network is behind the
MVNO, the mean was very close to the score 3 (Neutral), this means that users will not really
care which mobile operator is in the backend behind the MVNO brand
The Social Influence variable:1) The Image construct:
Table 4.7 - Descriptive Statistics for Social Influence construct
Mean
I would use MVNO if it seems to be an exclusive / VIP brand 2.53I would use MVNO if it seems to be an ordinary brand 3.02
According Table 4.7; the image doesnt play that much of a role in affecting the respondents
intention to use the MVNO services. This is clear from the mean of the answers which exceeds 2
in both cases indicating that the majority of the respondents didnt agree that they would use the
MVNO services due to its image whether it was exclusive or ordinary.2) The Social Factor construct:
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Figure 4.5 - Descriptive Statistics for Social factor construct
According to the frequency chart in Figure 4.5; the social factor (i.e. I would choose the MVNO
that my friends use) has no effect on the respondents intention to use the MVNO services.
The Trust variable:
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According to Figure 4.6, the majority of the respondents dont accept for the MVNO to
share/distribute their personal data to other parties.
The Cost variable:According to Figure 4.7, the majority of the respondents agree that the low cost of changing
from another network and join MVNO plays an important role in their intention to use the
MVNO services.
Figure 4.7 - Descriptive Statistics for Cost construct
The network Im using now isAccording to Error! Not a valid bookmark self-reference., The 194 respondents responded
that they have 242 mobile lines i.e. the mobile penetration is inflated due to the multi SIM
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User intention:According to figure Error! Reference source not found., majority of users show intention touse MVNO service
Figure 4.8 - Use Intention
4.3INFERENTIAL ANALYSIS
The following was assumed while doing the analysis:If r (correlation Coefficient) is 0.1 to 0.3 OR -0.1 to -0.3 then r = small correlation.
If r (correlation Coefficient) is 0.3 to 0.5 OR -0.3 to -0.5, then r = moderate correlation.
If r (correlation Coefficient) is 0.5 and above OR -0.5 and below then r = strong correlation.
The used significant value () is assumed to be 0.05
4.3.1 Reliability tests
Reliability tests were run on the level of the main variables (each main variable consists of several
questions belonging to different constructs) and on the overall data. The total number of
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0.7 > 0.5 Moderate reliability
Below 0.5 Low reliability
The results of the reliability analysis are as follows:
Table 4.10 - Reliability measurements
VariableNumber
Variable name Numberof items
Cronbach'sAlpha
Reliability
X1 Performance Expectancy 21 0.892 High reliability
X2 Effort Expectancy 4 0.613 Moderate reliability
X3 Social Influence 3 0.766 High reliability
X1, X2, X3,X4, X5
Overall reliability 30 0.904 Excellent reliability
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The X2 Effort Expectancy variable:
This variable consists of 4 different items categorized under 2 constructs:
Table 4.12 - Correlations of Effort Expectancy items
X4 - PEOU V28 V29 V30
Spearman's rho X4 - PEOU Correlation Coefficient 1.000 .118 .137 .238**
Sig. (2-tailed) . .101 .058 .001
N 194 194 194 194
V28 Correlation Coefficient .118 1.000 .488** .339**Sig. (2-tailed) .101 . .000 .000
N 194 194 194 194
V29 Correlation Coefficient .137 .488** 1.000 .378**
Sig. (2-tailed) .058 .000 . .000
N 194 194 194 194V30 Correlation Coefficient .238** .339** .378** 1.000
Sig. (2-tailed) .001 .000 .000 .
N 194 194 194 194
According to Table 4.12 - Correlations of Effort Expectancy items, the item X4 - PEOU :
Using the MVNO services even if they are more difficult than the regular service has no
statistically significant correlation with any of the other 3 items except with the item I would
use MVNO if it offers self-service channels like Web self service.
On the other hand the other three items has statistically significant correlation relationshipsbetween each other
Therefore it could be concluded that the variable Effort Expectancy has only 3 items out of 4
that affect the respondents intention to use the MVNO service.
The X3 Social Influence variable:
This variable consists of 3 different items categorized under 2 constructs:
Table 4.13 - Correlations of Social Influence items
V32 V33X5 - Socialfactor
S ' h V32 C l i C ffi i 1 000 009 174
A di h T bl 4 13 C l i f S i l I fl i h i I ld
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According to the Table 4.13 - Correlations of Social Influence items, the item I would use
MVNO if it seems to be an exclusive / VIP brand has no significant correlation with any of the
2 other factors.
Therefore it could be concluded that the variable Social Influence has only 2 factors that affect
the respondents intention to use the MVNO service.
The item V33 I would use MVNO if it seems to be an ordinary brand is highly significant with
the social factor construct with a medium correlation.
Translating this into business point of view, it can be inferred that an exclusive brand is not amust to succeed, this is good news for ordinary brands like supermarket chains, sport clubs, etc.
they should not worry too much about being excluded from the mobile market, majority of users
accepts to have an ordinary brand with a confirmed medium correlation with their friends
selection of MVNO they use what their friends or close social circle use.
This means that social networking should play a role in marketing and increasing the subscriberbase of an MVNO.
4.3.1Variable correlation analysis
Table 4.14 - Variable Correlarion - Spearman Rho
X1 PERF EXP X2 TRUST X3 COST X4 EFRT EXP X5 SOCL INF
Y - Intention Corr. Coef. .767(**) .120(*) -.277(**) .594(**) .298(**)
Sig. (1-tailed) .000 .048 .000 .000 .000
N 194 194 194 194 194
** Correlation is significant at the 0.01 level (1-tailed).* Correlation is significant at the 0.05 level (1-tailed).
According to Table 4.14 the followings is observed:
Performance Expectancy:
A statistically significant positive strong correlation is clearly pointed out between independent
variable X1: Performance Expectancy and dependent variable Y: Customer Intention: r (194) =
0.767, P
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A statistically significant positive strong correlation between independent variable X4: Effort
Expectancy and dependent variable Y: Customer Intention: r (194) = 0.594, P
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The analysis proved that all the model independent variables affect the user intention to use
MVNO. The factors ranking according to their correlation with the intention is as follows (in
descending order:
Performance expectancy
Effort expectancy
Social Influence
Cost
Trust
In a bit more detailed presentation, the factors that affect the respondents intention to use an
MVNO are listed as follows:
The Performance Expectancy:
Services: (only highest ranking items are listed)
Traffic information service that tells me about crowded or closed roads
Cheap voice calls over the Internet (like Skype)
Broadband (Internet & Data)
Payment for bills from my mobile, example: Electricity, Water bills
Family offers
Customer care solves my problems quickly with no hassle
Protection against unwanted advertisement SMS
Job fit:
MVNO services fits the customer lifestyle requirements
Network specific: (only highest ranking items are listed)
Voice calls are crystal clear, no noise, and no echo
Voice calls never drops
Network coverage is excellent inside buildings
The Social Influence:
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The Social Influence :
Image:
MVNO considered as an exclusive brand
Social Factor:
Customers may use the same operator that their friends use
The Cost: The incurred by the user in order to switch from current mobile service to MVNO.
The Trust: The user trust in the MVNO that his/her personal data are not leaked.
5 CHAPTER 5: CONCLUSION RECOMMENDATION AND
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5.CHAPTER 5: CONCLUSION, RECOMMENDATION AND
FUTURE WORK
An MNVO planning to establish business in Egypt should carefully consider its strategy and not
only concentrate on cost leadership but better follow a differentiation and provide a variety of
new services to its subscribers.
Despite of the fact that Egypt is a developing country and price is a dominant factor in customer
decision but it is not recommended for a new MVNO to use cost leadership strategy, accordingto recommendations of previous researches, the proper strategy for an MVNO is to differentiate
itself from MNOs by offer new and innovative services and to target niche or untapped market
segments (Kumar, 2010)
The finding of this research confirms the positive relationship between the proposed factors and
the user intention to use an MVNO; such factors are:
Innovative services: (Traffic information services, Bills payment, VOIP, Family offer
packs, advertisement SMS blocking)
Network/Voice quality
Offers (bundled with its original brand business)
Trust (specifically regarding personal data) Switching cost
Social influence
Complexity (or simplicity) of procedures required to subscribe to MVNO service
5.1 RECOMMENDATIONS
A new MVNO in Egypt is advised to:
Provide new and innovative services
Pro ide attracti e offers not necessaril straight price c ts b t more of b ndles ith its
Consider social groups while doing marketing as users tend to consider which MVNO
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s d s g ps w d g g s s s d s d w VN
that their friends or persons in their close circle are choosing
In some cases a mobile operator might have a good quality network but due to bad customer care
or weak marketing they do not have the first brand name in the market, this would be a perfect
partner fit between the MNO and MVNO in which the MVNO tries to do perfect marketing to
sell service in a high quality network.
5.2FUTURE WORK
A possible future work is to validate the Age, and Gender as moderating variables for this
model in Egypt, in addition to possibly new moderating variables, such study shall
consider a larger sample size to be able to statistically verify the outcome.
Study the effect of people awareness of innovative mobile services (in case it was
provided by classical service providers) the level of adoption of MVNO mobile service,
i.e. in case MVNO provides new services that was never provided by established MNO,
will it be accepted in the market?
Study the effect of social networking on marketing efficiency and growth potential of
MVNO
Study the MVNO acceptance from the brand extension prospective and the affect of the
original brand on the user intention to subscribe to the MVNO
Study the customer acceptance for MVNO as brand extension aspect and the effect of
the original brand on its new MVNO business
Another area that worth being explored is the MVNO effect on the original brand itself,
will it strengthen the original brand by being diversified or will it damage the original
brand due the competition with big mobile operators that in any case will stay bigger than
any MVNO scale
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APPENDIX A: SMES PROFILES
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APPENDIX A: SMES PROFILES
Hesham Moafi, Regulatory Affairs Officer, Orascom Telecom HoldingAshraf Sahab, Marketing Development Senior Manager, Orascom Telecom Holding
Mohammed El-Ammawi, Market Development & Strategy Director, Orascom Telecom Holding
Mostafa Khalil, Head of Revenue Management, Etisalat
Anonymous, Wholesale Department, Vodafone
Sherif Amin, Product and Services Director, EtisalatAhmed El-Noamani, Network Operation Senior Manager, Orascom Telecom Holding
Hesham Kamel, Solution Engineering Senior Manager, Orascom Telecom Holding
Amr El-Deeb, Project Senior manager, Orascom Telecom Holding
APPENDIX B: EXPERTS SEMI STRUCTURED
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APPENDIX B: EXPERTS SEMI- STRUCTURED
QUESTIONNAIRE
Hello,
Let me first give you a brief introduction about my thesis topic,
MVNO (Mobile Virtual Network Operator) is a new market approach in the Mobile business is
to have non telecom companies (like: Carrefour hyper market, Hilton hotels, Showtime satellite
network, Awlad Ragab supermarket, and RadioShack) selling mobile service using their own
brand, this approach is called Mobile Virtual Network Operator (MVNO);
This target of my thesis is to measure the consumer acceptance of a future MVNO, if an MVNO
is going to open up in Egypt
Part A:
Q1. First, if you are aware about the MVNO business model, please tell me your thoughts about
applying such approach in Egypt.
Answers:
Part B:
Q3. Ill mention some categories that are proposed by theories to affect the customer intention
to use something new like the MVNO; according to your knowledge about the Egyptian market,
please mention if they could be valid YES?NO?
And mention as well the items that might fit within each category?
YES NO
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Comments:
Job fit:
Extrinsic Motivation
YES NOComments:
Outcome ExpectationsYES NO
Comments:
Relative advantage:
YES NO
Comments:
Complexity
YES NO
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Subjective normYES NO
Comments:
Image
YES NO
Comments:
Social factors
YES NO
Comments:
Do you have other items to add that may influence the customer intention to subscribe to
MVNO?
Comments:
APPENDIX C: CONSOLIDATED EXPERTS INTERVIEW
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N C: CONSO S N V W
RESPONSEHello,
Let me first give you a brief introduction about my thesis topic,
MVNO (Mobile Virtual Network Operator) is a new market approach in the Mobile business is
to have non telecom companies (like: Carrefour hyper market, Hilton hotels, Showtime satellite
network, Awlad Ragab supermarket, and RadioShack) selling mobile service using their own
brand, this approach is called Mobile Virtual Network Operator (MVNO);
This target of my thesis is to measure the consumer acceptance of a future MVNO, if an MVNO
is going to open up in Egypt
Part A:
Q1. First, if you are aware about the MVNO business model, please tell me your thoughts about
apply
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