Customer Experience, Loyalty, and Churn in Bundled Telecommunications Services

Abstract

The telecommunications industry is highly competitive, as operators engage in fierce attacks, especially in bundled services, to acquire new customers originating high churn rate. The objective of this paper is to gain a comprehensive understanding of the factors influencing the switching of operators for bundled services among telecom operators. The paper includes a quantitative study with 3,004 customers utilizing bundled services from a Portuguese telecom operator. Employing covariance-based structural equation modeling and logit regression, the research shows that internet service, television service, and the service provided by the contact center exert the greatest impact on loyalty to the operator. In contrast, landline service has an insignificant effect, while loyalty has a negative influence on customer churn. This study offers telecommunications managers insights for identifying the main factors to retain customers and curbing customer defection. Additionally, it provides a framework for assessing customer experience within bundled telecom services, which is useful for researchers, managers and marketing practitioners alike.