Table of Contents

Chapter one..............................................................................................................................................................1
1. INTRODUCTION...........................................................................................................................................1
1.1 Background of the study...............................................................................................................................1
1.2 Statement of the Problem..............................................................................................................................3
1.3 Objectives of the study..................................................................................................................................5
1.3.1 General objective...............................................................................................................................................5
1.3.2 Specific Objectives.......................................................................................................................................5
1.4 Research questions........................................................................................................................................5
1.5 Significance of the study...............................................................................................................................5
1.6 Scope of the study.........................................................................................................................................6
Chapter Two.............................................................................................................................................................7
2 Literature Review...........................................................................................................................................7
2.1 INTRODUCTION................................................................................................................................................7
2.1 DEFINITION.......................................................................................................................................................8
2.1.1 ANTECEDENTS....................................................................................................................................11
2.1.2 DEMOGRAPHICS AND CUSTOMER SATISFACTION.......................................................................18
2.2 STATE OF MOBILE TELECOMMUNICATION IN AFRICA.......................................................................20
2.3 STATE OF MOBILE TELECOMMUNICATION IN ETHIOPIA...................................................................21
2.3.1 HISTORICAL OVERVIEW OF ETHIO-TELECOM...............................................................................21
2.3.3 SERVICE....................................................................................................................................................23
Chapter- Three.......................................................................................................................................................31
3 Research Methodology..........................................................................................................................................31
3.1 Research strategy and design..............................................................................................................................31
3.2 Data Source and Type.................................................................................................................................31
3.3 Survey Study Design...................................................................................................................................31
3.3.1 Population...........................................................................................................................................31
3.3.2 Sample Size and Sampling Technique...............................................................................................32
3.4 Data Collection Method..............................................................................................................................33
3.5 Data Processing and Methods of Data Analysis.........................................................................................33
3.6 Organization of the study............................................................................................................................34
3.7 Work plan and budget.................................................................................................................................34
REFERENCE.........................................................................................................................................................35
Chapter one

1. INTRODUCTION

1.1 Background of the study

Organizations both private and public , in today’s dynamic marketplace and market space are
increasingly leaving antiquated marketing philosophies and strategies to the adoption of more
customer-driven initiatives that seek to understand, attract, retain and build intimate long term
relationship with profitable customers (Kotler, 2006; Gronroos,C 1994; Paradise-Tornow, 1991;
Narver and Salter, 1990). This paradigm shift has undauntedly led to the growing interest in
customer relationship management initiatives that aim at ensuring customer identification and
interactions, customization, and personalization that unreservedly lead to customer satisfaction,
retention, and profitability, among other things (Thompson,2004; Gronroos et al., 1996; Xu et al,
2002; Dyche, 2001; Ryals and Knox, 2001; Stone, 200).

Organizations are therefore increasingly more customer-centric and are much interested not just
in acquiring new customers, but more importantly, retaining existing customers. This is perhaps
because it costs more to attract new customers than to retain existing ones. It is believed that the
average business spends six times more to attract new customers than to retain old customers.
Again it is more profitable retaining an old customer who is more likely to re-purchase or re-use
a company’s products/services and recommended them to others.

Consequently, organizations attempt to adopt measures to ascertain customer

satisfaction/dissatisfaction. Some organizations traditionally rely on customer complains to
ascertain customer satisfaction. Many organizations no longer use only customer complains;
rather they adopt rigorous qualitative and quantitative mechanisms to measure customer
satisfaction. In this regard measuring customer satisfaction provides the feedback of how
successful an organization is at providing products and/or services to the satisfaction of
customers at the marketplace and market space. This makes it imperative for organizations to
take pragmatic and reliable steps towards improving the quality of service delivery, managing
customer value and satisfaction more effectively.

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Mobile phone operators provide voice service and value added services including SMS (short
message service), MMS (multimedia message service), ring back tone, call forwarding, call
conference, electronic transaction, and web browsing etc. Besides, voice services proving value
added services are becoming great prospect for mobile phone service providers (Kim.H, 2000).

In Ethiopia mobile phone service introduced in 1991 E.C by 36,000 lines, but now has shown
dramatic change on coverage and in subscribers’ number has scored 61 million lines. (ethio
telecom, 2018).

In Ethiopia, Still there is no any kind of competition in the industry, due to the market monopoly
system of the country. This single organization is continually improving up the quality of its
service delivery, but variety and personalized services to customers’ are under question.

Satisfied customers are the source of all profits and shareholders' value. Customer can choose
from whom they buy, and unless the firm satisfies them at least as well as competitors, sales and
profits was quickly erode. Customer satisfaction should therefore be a prime objective and
measure of the performance of managers (Wilson.R and Colin,G 2005).

2
1.2 Statement of the Problem

According to Pajares F. (2007) Customer satisfaction and customer services are found having
positive relationship. Now a day’s relational marketing is considered very important on the
realization of the fact that customer satisfaction is quite essential for the lasting relationship
between service organization and customer. As in telecommunication service industry a special
care should take place to develop good relationship (Tse and Wilton, 1988, Oliver, 1999).
Customer service is a system of activities that comprises customer support systems, complaint
processing, speed of complaint processing, ease of reporting complaint and friendliness when
reporting complaint (Hanif.M., 2010).

There are many complaints from customers about the service delivery of the mobile
telecommunication network provider, in Ethiopia. Evidently, the growth trend in the mobile
telecom industry in Ethiopia does not provide empirical support for the claim that customers are
satisfied with the service delivery of the mobile telecommunication network in Ethiopia. The
market is feeling that customers are not treated fairly and far away for adequate justice. This kind
of belief in the market is more dangerous for any business in the present day‘s highly cut-throat
competitive business world (Potluri.R. M, 2010).

Most of the organizations in these days have treated customer handling procedure as a strategic
marketing tool. Service providers are frequently exhorted to strive towards a zero defects service;
the ability to get it right first time is thought to offer significant benefits to organizations in terms
of both customer evaluations and costs of delivery (Potluri.R. M, 2010).

Increasing customer satisfaction has been found to lead organization to higher future
profitability. Therefore, Customer services are the opportunities for telecom service providers
that are added to mobile network other than voice services in which contents are either self
produced by service provider or provided through strategic compliance with service provider in
order to create satisfied customers with quality service (Hanif. M, 2010).

Studies conducted to explore factors affecting satisfaction, loyalty and retention in mobile
telecommunications industry include: Gerpott et al. (2001) investigated customer satisfaction,
loyalty and retention in the German mobile telecommunications among 684 respondents and
reported that customer retention cannot be equated with customer loyalty and/or customer

3
satisfaction, rather a two-stage causal link can be assumed in which customer satisfaction drives
customer loyalty which in turn has impacts on customer retention. However, these three factors
are important for superior economic success among telecommunication service providers.

Previous studies on mobile telecommunication services measured services quality by call quality,
pricing structure, mobile devices, value-added services, convenience in procedures, and customer
support (Gerpott et al., 2001). Customers determine satisfaction level of any purchased service
by the perceptions of quality received. Customer satisfaction assessment captures service quality
and in this study, to measure service quality of mobile telecommunication services, different
mobile service attributes will used to assess customer satisfaction.

Therefore the researcher is motivated to know and understand the level of customer satisfaction
because currently mobile phone is one of the critical instrument and issue to everyone. This
study is forced by the need to empirically measure customer satisfaction with service delivery of
Ethio telecom mobile service in east Addis Abeba zone. The condition of customer satisfaction
with service delivered by ethio-telecom is not as such satisfactory and very limited. So, the
researcher will assess and evaluate the cause of customer dissatisfaction and things that make
customers complain every time in the following problems:-

 The price of service charge specially voice per minutes and data per mega byte

 Poor quality of mobile network

 Poor service delivery to customers

 Weak after sales service to customers

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 1.3 Objectives of the study

1.3.1 General objective

The general objective of this study is to investigate and assess telecom marketing strategies towards
customer satisfaction, and its problems in the telecom industry in Ethiopia drawing on practical
evidence from surveyed customers.

1.3.2 Specific Objectives

The specific objectives of the research are:

 To identify the impact of marketing strategies on the performance of telecom service the
areas.

 To assess customers’ response to the implementation of marketing strategies on the status

of Ethio telecom service delivery to customers and after sales service.

 To assess pricing determines customer satisfaction.

 To investigate the problems that hampers not to remove or minimize the key challenges
on the quality of mobile network.

1.4 Research questions

1. What are the impacts of marketing strategies on the performance of telecom service?
2. What are the customers’ response to the implementation of marketing strategies on the
quality of mobile network
3. Does pricing determine customer satisfaction?
4. What are the problems that hamper not to remove or minimize the key challenges on the
quality of mobile network?
1.5 Significance of the study

The results of this study will expect to be taken up by Ethio-telecom to understand its Customer
Relationship Management in terms of satisfaction and strategic marketing management
performance. Also, it will help to provide important information for decision makers of Ethio-
telecom. Therefore, the findings of this study specifically significant for the following reasons.

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  The result of this study will provide valuable inputs and directions to Ethio- telecom to
combine its marketing strategy, organizational efficiency, and customer knowledge
management.
 It will also help Ethio- telecom to identify the needs of its customers in delivering
advanced technologies to improve the quality of their services.
 The result of this study will help the community to have a world class service quality and
to have good customer satisfaction.
 The result of this study will help the country by exploiting maximum revenue from its
resource as it is government organization and monopoly in the country.
 The result of this study will help Ethio-telecom to achieve company level strategy with
respect to price.
1.6 Scope of the study

Even if broader research that encompasses all Ethio telecom branches would give a more holistic
view on the study; this study will delimited on the geographic area in East Addis Abeba
geographically. Conceptually, the study will confined to assess mobile network quality, service
charge price, after sales service, procedures for new service provisioning, and service delivery
for customers towards customer satisfaction and finally towards telecom marketing strategy is
the focuses of this study. Methodologically the study will use mixed type of research method and
data will collected from customers living in East Addis Abeba Zone. And this research will cover
timely 2018.

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 Chapter Two
2 Literature Review

2.1 INTRODUCTION

Mobile telecommunication refers to the exchange of information ideas and thoughts through the
medium of a mobile phone, telephone or wireless network. According to the world international
property organization, a mobile communication system/network refers generally to any
telecommunications system which enables wireless communications when users are moving
within the service area of the system. Until the invention of modern technology, the use of
semaphore, flags, heliograph, relay runners; riders and criers, smoke signals, drum, and light
signals; message- carrying pigeons, and even the postal system were the traditional long-distance
communication media.

Customer satisfaction, as a construct, has been fundamental to marketing for over three decades.
As early as 1960, Keith (1960) defined marketing as “satisfying the needs and desires of the
consumer”. Hunt (1982) reported that by the 1970s, interest in customer satisfaction had increase
to such an extent that over 500 studies were published. This trend continued and by 1992,
Peterson and Wilson estimated the amount of academic and trade articles on customer
satisfaction to be over 15,000.
Several studies have shown that it costs about five times to gain a new customer as it does to
keep an existing customer (Naumann, 1995) and these results into more interest in customer
relationships. Thus, several companies are adopting customer satisfaction as their operational
goal with a carefully designed framework. Hill and Alexander (2000) wrote in their book that
“companies now have big investment in database marketing, relationship management and
customer planning to move closer to their customers”. Jones and Sasser (1995) wrote that
“achieving customer satisfaction is the main goal for most service firms today”.
Increasing customer satisfaction has been shown to directly affect companies’ market share,
which leads to improved profits, positive recommendation, lower marketing expenditures
(Reichheld, 1996; Heskett et al., 1997), and greatly impact the corporate image and survival
(Pizam and Ellis, 1999).

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2.1 DEFINITION
Parker and Mathew (2001) expressed that there are two basic definitional approaches of the
concept of customer satisfaction. The first approach defines satisfaction as a process and the
second approach defines satisfaction as an outcome of a consumption experience. These two
approaches are complementary, as often one depends on the other.
Customer satisfaction as a process is defined as an evaluation between what was received and
what was expected (Oliver, 1977, 1981; Olson and Dover, 1979; Tse and Wilton, 1988),
emphasizing the perceptual, evaluative and psychological processes that contribute to customer
satisfaction (Vavra, 1997, p. 4).

Parker and Mathews (2001) however noted that the process of satisfaction definitions
concentrates on the antecedents to satisfaction rather than satisfaction itself.
Satisfaction as a process is the most widely adopted description of customer satisfaction and a lot
of research efforts have been directed at understanding the process approach of satisfaction
evaluations (Parker and Mathews, 2001). This approach has its origin in the discrepancy theory
(Porter, 1961), which argued that satisfaction is determined by the perception of a difference
between some standard and actual performance.
Cardozo (1965); and Howard and Sheth (1969) developed the contrast theory, which showed that
consumers would exaggerate any contrasts between expectations and product evaluations.

Olshavsky and Miller (1972); and Olson and Dover (1979) developed the assimilation theory,
which means that perceived quality is directly increasing with expectations. Assimilation effects
occur when the difference between expectations and quality is too small to be perceived.

Anderson (1973) further developed this theory into assimilation-contrast theory, which means if
the discrepancy is too large to be assimilated then the contrast effects occur. The assimilation-
contrast effects occur when the difference between expectations and quality is too large to be
perceived and this difference is exaggerated by consumers.

According to Parker and Mathews (2001), the most popular descendant of the discrepancy
theories is the expectation disconfirmation theory (Oliver, 1977, 1981), which stated that the
result of customers’ perceptions of the difference between their perceptions of performance and
their expectations of performance. Positive disconfirmation leads to increased satisfaction, with

8
negative disconfirmation having the opposite effect. Yi (1990) expressed that customers buy
products or services with pre-purchase expectations about anticipated performance, once the
bought product or service has been used, outcomes are compared against expectations. If the
outcome matches expectations, the result is confirmation. When there are differences between
expectations and outcomes, disconfirmation occurs. Positive disconfirmation occurs when
product or service performance exceeds expectations. Therefore, satisfaction is caused by
positive disconfirmation or confirmation of customer expectations, and dissatisfaction is the
negative disconfirmation of customer expectations (Yi, 1990).

While several studies support the disconfirmation paradigm, others do not. For instance,
Churchill and Surprenant (1982) found that neither disconfirmation nor expectations had any
effect on customer satisfaction with durable products.

Weiner (1980, and 1985); and Folkes (1984) proposed the attribution theory, which stated that
when a customer purchases a product or service, if the consumption is below expectation, the
customer is convinced that the supplier causes the dissatisfaction. The complaining customer is
focused on restoring justice and the satisfaction outcome is driven by perceived fairness of the
outcome of complaining.

Westbrook and Reilly (1983) proposed the value-percept theory, which defines satisfaction as an
emotional response caused by a cognitive-evaluative process, which is the comparison of the
product or service to one's values rather than an expectation. So, satisfaction is a discrepancy
between the observed and the desired.

Fisk and Young (1985); Swan and Oliver (1985) proposed the equity theory, which stated that
individuals compare their input and output ratios with those of others and feel equitable treated.
Equity judgement is based on two steps; first, the customer compares the outcome to the input
and secondly, performs a relative comparison of the outcome to the other party.
Pizam and Ellis (1999) reported that there are two additional distinct theories of customer
satisfaction apart from the seven aforementioned ones and these include:

9
1. Comparison-level

2. Generalized negativity; and

The outcome approach of the customer satisfaction is defined as the end-state satisfaction
resulting from the experience of consumption. This post- consumption state can be an outcome
that occurs without comparing expectations (Oliver, 1996); or may be a cognitive state of
reward, an emotional response that may occur as the result of comparing expected and actual
performance or a comparison of rewards and costs to the anticipated consequences (Vavra, 1997,
p. 4).

Furthermore, Parker and Mathews (2001) expressed that attention has been focused on the nature
of satisfaction of the outcome approach which include:

1. Emotion - Satisfaction is viewed as the surprise element of product or service purchase and or
consumption experiences (Oliver, 1981), or is an effective response to a specific consumption
experience (Westbrook and Reilly, 1983). This acknowledges the input of comparative cognitive
processes but goes further by stating that these may be just one of the determinants of the
affective “state” satisfaction (Park and Mathews, 2001).

2. Fulfillment –The theories of motivation state that people are driven by the desire to satisfy
their needs (Maslow, 1943) or by their behaviour aimed at achieving the relevant goals (Vroom,
1964). However, satisfaction can be either way viewed as the end-point in the motivational
process. Thus “consumer satisfaction can be seen as the consumer's fulfillment response” (Rust
and Oliver, 1994, p. 4).

3. State – Oliver (1989) expressed that there are four framework of satisfaction, which relates to
reinforcement and arousal. “Satisfaction-as-pleasure” results from positive reinforcement, where
the product or service is adding to an aroused resting state, and “satisfaction-as-relief” results
from negative reinforcement .In relation to arousal, low arousal fulfillment is defined as
“satisfaction-as contentment”, a result of the product or service performing adequately in an
ongoing passive sense. High arousal satisfaction is defined as “satisfaction as either positive
(delight) or negative surprise” which could be a shock (Rust and Oliver, 1994).

10
The other customer satisfaction definitions include: Satisfaction is “the cognitive state of the
buyer about the appropriateness or inappropriateness of the reward received in exchange for the
service experienced (Howard and Seth, 1969, pp. 145); the evaluation of emotions (Hunt, 1977,
p. 460); the favorability of the individual's subjective evaluation (Westbrook, 1980, p. 49); a
positive outcome from the outlay of scarce resources (Bearden and Teel, 1983a, p. 21); an
overall customer attitude towards a service provider (Levesque and McDougall, 1996, pp.14); is
a judgment that a product or service feature, or the product or service itself, provided (or is
providing) a pleasurable level of consumption-related fulfillment, included levels of under- or
over fulfillment (Oliver,1997, p. 13); is an experience-based assessment made by the customer of
how far his own expectations about the individual characteristics or the overall functionality of
the services obtained from the provider have been fulfilled (Homburg and Bruhn, 1998); the
fulfillment of some need, goal or desire (Oliver, 1999); an emotional reaction to the difference
between what customers anticipate and what they receive (Zineldin, 2000); is based on a
customer’s estimated experience of the extent to which a provider’s services fulfill his or her
expectations (Gerpott et al. 2001)”.

For this study, customer satisfaction definition used is that of Homburg and Bruhn (1998) which
is “an experience-based assessment made by the customer of how far his own expectations about
the individual characteristics or the overall functionality of the services obtained from the
provider have been fulfilled”.

The relevance of this definition to this study is that it indicates that customers assess the mobile
services based on experience of use and the rating is done in accordance with the mobile services
attributes. In this study, customer satisfaction with the Nigerian mobile services were evaluated
based on customers experience of network quality, billing, validity period and customer care
support.

2.1.1 ANTECEDENTS
Taylor and Baker (1994) and Rust and Oliver (1994) identified several factors that precede
customer satisfaction and suggested that these factors strongly influence the extent of customer
satisfaction. Some of these antecedents include:

11
2.1.1.1 CLEAR UNDERSTANDING OF CUSTOMER NEEDS AND EXPECTATIONS
The achievement of a strong customer satisfaction is closely related to the understanding
customer needs and expectations (William and Bertsch, 1992). According to the Kano Model
(2001), customer needs can be divided into:

 Basic needs – obvious needs of customers and if not met, he is dissatisfied, however
meeting this needs may not be enough for customer satisfaction. Its satisfaction results in
“must be quality”.
 Expected needs – these are important needs that customers are fully aware of and
satisfaction is expected in every purchase; their satisfaction creates “expected quality”.
 Excitement needs – these are unconscious and unspoken needs of customers. By
identifying and satisfying such needs, companies washave added large value to customers
and can win loyal customers. This satisfaction creates “attractive quality”.
Studies that supported the notion that expectations precede satisfaction include: Anderson,
Fornell and Lehmann (1994), who conducted investigation on Swedish firms and reported that
there is a positive and significant relationship between expectations and customer satisfaction.
They describe expectation as an accumulation of information about quality from the outside
sources (e.g. advertising, word of mouth and general media) and past experiences. Cadotte,
Woodruff, and Jenkins (1987) conducted investigation on food restaurant and reported that
expectation is significantly correlated with satisfaction. Additionally, expectation is a pre-
purchase choice process and form a part of evaluation standards of conceptualizing satisfaction
process. Churchill and Suprenant (1982) conducted investigation on durable good (video disc
player) and non-durable goods (hybrid plant). For the hybrid plant study, expectation is reported
to have a direct impact on satisfaction. Oliver (1981) conducted investigation on retail stores and
reported that expectation has direct influence on satisfaction. However, there are other research
works that disagree with this finding, examples include: Churchill and Suprenant (1982) in their
investigation on video disc player, reported expectation to have no impact on satisfaction. Spreng
and Olvshavsky (1993) conducted investigation on cameras and reported that there is no
significant relationship between these two variables.

With this aforementioned literature, it is noted that customers purchase services based on their
needs and have expectations that the purchased services wasmeet their needs. Customers in turn

12
assess the service performance in accordance to how well it meets their expectations. Although,
customer expectation is not a focus of this study, however satisfaction measurement is useful to
understand customer expectations (since most times assessment is done by customers based on
past experiences and future beliefs of service performance).

2.1.1.2 PERCEIVED VALUE

Perceived value is defined as “the results or benefits customers receive in relation to total costs
(which include the price paid plus other costs associated with the purchase) or the consumers'
overall assessment of what is received relative to what is given” (Holbrook,1994 and Zeithaml,
1988).

Additionally, Zeithaml (1988) found out that customers who perceive that they receive value for
money are more satisfied than customers who do not perceive they receive value for money.

Several studies have shown that perceived value is significant determinant of customer
satisfaction (Anderson et al. (1994); Ravald and Gronroos (1996); and McDougall and Levesque,
2000). Turel and Serenko (2006) in their investigation of mobile services in Canada suggested
that the degree of perceived value is a key factor affecting customer satisfaction.

Past research studies suggested that there are four features, which are key drivers of the customer
value of cellular services: network quality, price, customer care, and personal benefits (Booz,
Allen & Hamilton, 1995, Danaher & Rust, 1996; Bolton, 1998; Gerpott, 1998; Wilfert, 1999).

 The network quality refers to excellent indoor and outdoor coverage, voice clarity, and no
connection breakdowns.
 Price refers to what is paid to obtain access to use the network.
 Customer care refers to the quality of the information exchanged between customer and
supplier or network provider in response to enquiries and other activities initiated by the
network provider, for example presentation of invoices.
 Personal benefits refer to the level of perception of the benefits of mobile
communications services by individual customers.
It is apparent from this review that one of the factors customers use to determine satisfaction
level is the benefits received from a product or service in comparism with what is spent.
Perceived value is not a focus of this study (however customer satisfaction evaluation captures

13
perceived value; the assessment shows what consumer’s value in the service received). The
suggested mobile services attributes (features) were used to assess customer satisfaction in this
study.

2.1.1.3 SERVICE QUALITY

Another factor that contributes to satisfaction is service quality. Service quality is defined as
“the difference between customer expectations and perceptions of service” or “as the
customers’ satisfaction or dissatisfaction formed by their experience of purchase and use of the
service” (Gronroos, 1984 and Parasuraman et al.1988).

Oliver (1993) reported that service quality is a casual antecedent of customer satisfaction, due to
the fact that service quality is viewed at transactional level and satisfaction is viewed to be an
attitude. Dabholkar et al. (1996) and Zeithaml et al. (1996) reported that the service quality
divisions are related to overall service quality and or customer satisfaction. Fornell et al., (1996)
expressed that satisfaction is a consequence of service quality. Hurley and Estelami (1998)
argued that there is causal relationship between service quality and satisfaction, and that the
perceptions of service quality affect the feelings of satisfaction.

There are various classifications of the components of service quality in marketing science.
Gronroos (1984) stated that “in service environments, customer satisfaction were built on a
combination of two kinds of quality aspects; technical and functional”. Technical quality or
quality of the output corresponds to traditional quality of control in manufacturing. It is a matter
of properly producing the core benefit of the service. Functional quality or process quality is the
way the service is delivered. It is the process in which a customer is a participant and co-
producer, and in which the relationship between service provider and customer plays an
important role (Wiele et al., 2002).

Technical quality is related to what customer gets (transaction satisfaction); functional quality is
related to how the customer gets the result of the interaction (relationship satisfaction).

Lewis (1987) suggested that service quality can be classified as essential and subsidiary.
Essential refers to the service offered and subsidiary includes factors such as accessibility,
convenience of location, availability, timing and flexibility, as well as interactions with the
service provider and other customers.

14
The classification can also be the core (contractual) of the service, and the relational (customer-
employee relationship) of the service. The core or the outcome quality, which refers to what is
delivered and the relational or process quality, which refers to how it is delivered are the basic
elements for most services. (Grönroos, 1985; McDougall and Levesque, 1992; Parasuraman et
al., 1991b; Dabholkar et al., 1996).

McDougall and Levesque (2000) in their direct approach investigation on four service firms
(dentist clinic, automobile shop, restaurant, and haircut salon) demonstrated that both core and
relational service quality classes have significant impact on customer satisfaction. Heskett et al.
(1997) conducted studies on several service firms, such as airline, restaurants, etc and reported
that service quality, solely defined as relational quality, has consistent effect on satisfaction and
is regarded as key factor in delivering customer satisfaction.

Parasuraman et al. (1988) identified five dimensions of service quality (SERVQUAL) that must
be present in any service delivery. SERVQUAL helps to identify clearly the impact of quality
dimensions on the development of customer perceptions and the resulting customer satisfaction.
SERVQUAL include:

 Reliability - the ability to perform the promised services dependably and accurately.
 Responsiveness - the willingness to help customers and provide prompt service.
 Assurance - the knowledge and courtesy of employees as well as their ability to convey
trust and confidence.
 Empathy - the provision of caring, individualized attention to customers, and
 Tangibles - the appearance of physical facilities, equipment, personnel and
communication materials.
The model conceptualizes service quality as a gap between customer's expectations (E) and the
perception of the service providers' performance (P). According to Parasuraman et al. (1985),
“service quality should be measured by subtracting customer's perception scores from customer
expectation scores (Q = P - E)”. The greater the positive score mark means the greater the
positive amount of service quality or the greater the negative score mark, the greater the negative
amount of the service quality.

15
Zeithaml et al. (1990) proposed a comprehensive perception of quality assessment and claimed
that they are other factors apart from the dimensions of Parasuraman et al. (1988):

 Access – how easy it is to come into contact with the supplier. This is where position,
opening hours, supplier availability, and other technical facilities belong.
 Communication – the ability to communicate in an understandable way that is natural to
customer.
 Credibility – referring to being able to trust the supplier
 Courtesy – refers to the supplier’s behaviour, e.g. politeness and kindness
Parasuraman et al. (1988), assurance dimension is a combination of the credibility and courtesy
dimensions of Zeithaml et al. (1990).

Pizam and Ellis (1999) stated that the gap that may exist between the customers' expected and
perceived service quality is a vital determinant of customer satisfaction or dissatisfaction, and not
just only a measure of the quality of the service.

Previous studies on mobile telecommunication services, measured services quality by call

quality, pricing structure, mobile devices, value-added services, convenience in procedures, and
customer support (Kim, 2000; Gerpott et al., 2001; Lee, Lee, & Freick, 2001).

Customers determine satisfaction level of any purchased service by the perceptions of quality
received. Therefore, customer satisfaction assessment captures service quality and in this study,
the previous factors used to measure service quality (call quality, billing, customer support, etc)
of mobile telecoms were used to assess customer satisfaction.

2.1.1.4 INTERNAL SATISFACTION

Research works have shown the importance and the link of internal (employee) satisfaction to
the external (customer) satisfaction. Hill and Alexander (2000) stated that there is a positive
relationship between employee satisfaction and customer satisfaction and this is achieved in
companies that practice employee motivation and loyalty. They reported that “employees that
are more motivated to achieve customer satisfaction tend to be more flexible in their approach to
their work, make fewer mistakes and use more initiative”. Fečiková (2004) conducted studies on
the index method for customer satisfaction measurement with chairs in Slovakia and reported

16
that the satisfaction of internal customers is one of the basic factors to satisfy the external
customer. Thus, she suggested that employee motivation and loyalty can be achieved through:

 Daily leadership – Top management officials motivate others through their performance.
 Top management communicates their expectations to the employees.
 Development of competencies – feedback on employees performance, work efforts,
opportunity for development and improvement of competencies.
 Corporation and employee retention, and
 Good working conditions

2.1.1.5 COMPLAINT MANAGEMENT

Albrecht and Zemke (1985) found that of the customers who register complaints, between 54%
and 70% was do business again with the company if their complaints are resolved. This figure
increases to 95% if the customer feels that the complaint was resolved promptly. Customers who
have complained to a company and had their complaints satisfactorily resolved tell an average of
five people about the good treatment they received. Hart, et al., 1990, reported that when the
service provider accepts responsibility and resolves the problem when customers complain, the
customer becomes “bonded” to the company.

McNeale (1994) found out that about 5% of the dissatisfied customers actually complain to the
appropriate companies but easily tell their friends, colleagues and acquaintances about their
experiences. Thus, companies ought to be aware or routinely investigate how well or badly their
customers are treated. Ovenden (1995) in his book about studies conducted on several
companies in the UK, such as wholesaler, manufacturers, etc, argued that companies need to be
aware how well or badly its customers are treated and that customers rarely complain and when
they do, it might be too late to keep such customers.

Levesque and McDougall (1996) in their case study on retail banking found out that if a service
problem or customer complaint is ill or not properly handled, it has a substantial impact on the
customer’s attitude towards the service provider. However, the study did not support the notion
that good customer complaint management leads to increased customer satisfaction. They
reported that “at best, satisfactory problem recovery leads to the same level of customer
satisfaction as if a problem had not occurred”.

17
Nyer (2000) expressed that encouraging customers to complain increased their satisfaction and
especially the most dissatisfied customers and stated that “the more a customer complains the
greater the increases in satisfaction”.

Johnston (2001) reported that complaint management, not only results into increased customer
satisfaction, but also leads to operational improvement and improved financial performance.

Other suggested antecedents of customer satisfaction include: disconfirmation paradigm (Yi,

1990, and Szymanski and Henard, 2001); performance (Cadotte, et al., 1988, and Bolton and
Drew, 1991); affects (Westbrook and Oliver, 1991 and Mano and Oliver, 1993); and equity
(Oliver, 1993 and 1997).

2.1.2 DEMOGRAPHICS AND CUSTOMER SATISFACTION

The social identity theory proposed that attitudes are moderated by demographic, situational,
environmental, and psychosocial factors (Haslam et al., 1993; Jackson et al., 1996; Platow et al.,
1997). According to the social psychological theories, consumers’ evaluations are moderated, or
in some cases mediated, by personal feelings of equity in the exchange, disconfirmation between
desires and outcomes, individual preferences, social comparisons, and other complex
phenomena. These theories strongly suggest that differences in these phenomena among
consumers influence their attitudes (Williams et al., 1998).

Several empirical findings that have shown the relationship between demographic variables and
satisfaction include:

Bryant et al. (1996) conducted a study on 400 companies using the American Customer
Satisfaction Index (ACSI) and demonstrated that there is significant relationship and consistent
differences in the levels of satisfaction among demographic groups: Sex – positively related to
satisfaction and female customers are more satisfied than the male customers. Female of all ages
are more satisfied than the male. Women are more involved with the process of purchase and
possibly use the mobile phone more for relational purposes (social network device) while men
use it for functional purposes (businesses, sales, etc). Age – positively related to satisfaction but
the relationship is not a straight line. Satisfaction increases with age. The major increase in
satisfaction is seen within the age 55 and over. Income – the higher the income, the lower the
satisfaction level. Location (type of area) – positively related to satisfaction. Customers living

18
within metropolitan areas (central city and suburban areas) are less satisfied than those customers
in non-metropolitan areas.

Palvia and Palvia (1999) found out that age is a significant determinant of satisfaction with
information technology industry. Oyewole (2001) in his research on customer satisfaction with
airline services reported also that gender, occupation, education, and marital status have
significant influence on customer satisfaction, while age and household income had no
significant influence. Homburg and Giering (2001) conducted a study on German car
manufacturers using LISREL notation and demonstrated that it is important to study
demographic variables as determinants of customer behaviours. The results of their study
showed that gender has significant moderating effect on satisfaction- loyalty relationship.
Women are satisfied with sales process while men are satisfied with the impact of the product.
Age showed a positive moderating effect and income had moderating influence with high
income showing weaker effect and low income, high effect. Jessie and Sheila (2001) in their
empirical work on patients’ assessment of satisfaction and quality using factor analysis and
regression, reported that age, beneficiary group, location, rank, service affiliation, education,
marital status, race, gender, health status and number of visits (socio-demographic variables)
have minimal influence on satisfaction.

Lightner (2003) in his study on online experience using regression expressed that age is an
important factor in determining satisfaction levels and technology perceptions. VanAmburg
(2004) conducted a study on 200 companies using the American Customer Satisfaction Index
(ACSI) and demonstrated that age has a significant effect on satisfaction. Younger age groups
are less satisfied than older age groups across all products and services industries.

Venn and Fone (2005) conducted a study on patient satisfaction with general practitioner
services in Wales using logistic regression and reported that satisfaction varied with age, gender,
employment status, and marital status. The results obtained indicated that higher satisfaction is
significantly related with increasing age, female gender, unemployed (those at home, disabled
and retired), and married patients. However, unemployed - students and those seeking work,
reported lower satisfaction.

19
Turel and Serenko (2006) in their study on customer satisfaction with mobile services in Canada
using ACSI, reported that age has a significant influence on customer satisfaction and lower
satisfaction level is found among young adults.

2.2 STATE OF MOBILE TELECOMMUNICATION IN AFRICA

According to ICT indicators 2008 report, when the first mobile networks were launched in
Africa two decades ago, few imagined that mobile phones would become Africa’s
communications device of choice. In 1990, only six countries had networks and there were less
than 15,000 subscribers. It took six years to surpass one million mobile subscribers. The 100
million barriers was shattered nine years later in 2005 and at the beginning of 2008, there were
over a quarter of a billion mobile subscribers on the continent. Mobile penetration has risen from
two in 2000 to over a fourth of the population today. Mobile subscribers are also now more
evenly distributed. In 2000, South Africa accounted for over half of all Africa’s mobile
subscribers, but by 2007, only 16 percent of mobile subscribers were located in South Africa.
Nevertheless, today there is still considerable variation in mobile penetration among African
countries. While the average number of mobile subscribers per 100 inhabitants was 27 in 2007,
this ranges from close to 90 in Gabon, the Seychelles and South Africa to less than two in Eritrea
and Ethiopia. Although wealth is one key explanatory factor, the degree of competition in the
mobile sector also impacts mobile penetration. Most countries where mobile performance is poor
relative to per capita income have limited competition. For example, Eritrea and Ethiopia have
the lowest mobile penetration on the continent and only one mobile operator each. This is in
sharp contrast with Liberia, which is emerging from civil war and has a lower per capita income
than Eritrea or Ethiopia. With four mobile operators, Liberia has a mobile penetration more than
six times greater than that of Eritrea or Ethiopia. Other similar examples exist, across a range of
countries of different income levels. Take Equatorial Guinea, whose petroleum-based economy
results in the second-highest per capita income in the region. Yet Equatorial Guinea has only one
mobile operator and its penetration is half that of South Africa, where per capita income is one
third less, but three facilities-based mobile operators are active.
There are significant differences among Sub-Saharan African (SSA) countries in penetration of
key telecom services. Five countries, for example, including Mauritius,

20
Botswana, South Africa, Gabon, and Seychelles had the biggest penetration rates (in the range of
74 to 89 per 100 inhabitants) in terms of mobile subscription in 2007. In
Contrast, about 13 countries had less than 10 mobile subscribers per 100 inhabitants for the same
year, For example, Eritrea and Ethiopia have the lowest mobile penetration on the continent and
only one mobile operator each. This is in sharp contrast with Liberia, which is emerging from
civil war and has a lower per capita income than Eritrea or Ethiopia. With four mobile operators,
Liberia has a mobile penetration more than six times greater than that of Eritrea or Ethiopia
(African telecommunication/ICT indicators, 2008). Therefore, Customer services are the
opportunities for telecom service providers that are added to mobile network other than voice
services in which contents are either self produced by service provider or provided through
strategic compliance with service provider in order to create satisfied customers with quality
service (Hanif. M, 2010).

2.3 STATE OF MOBILE TELECOMMUNICATION IN ETHIOPIA

2.3.1 HISTORICAL OVERVIEW OF ETHIO-TELECOM

The introduction of telecommunication services in Ethiopia dates back to 1884, seventeen years
after the invention of telephone technology in the world. It was Minilik II, the King of Ethiopia,
who introduced telephone technology to the country around 1884, with the installation of 477km.
long telephone and telegram lines from Harar to Addis Ababa. Ethiopian Telecommunications
Corporation (ETC) is the oldest public telecommunications operator (PTO) in Africa. In Ethiopia
mobile phone service introduced in 1991 E.C by 36,000 lines, but now has shown dramatic
change on coverage and in subscribers’ number has scored 18 million lines. And also, currently
ethio-telecom has the potential to provide 23 million lines (ethiotelecom, 2012).

It is a state owned enterprise and the sole telecom service provider in the country. The
telecommunication services in Ethiopia have made rapid stride both in quality and quantity.
However, the users at large are on question with quality and quantity of the services made
available to them. The process of technological sophistication has gained the momentum but the
users are yet to get the quality and quantity of service (Tele Negarit, 2007). The poor sector
management coupled with the lack of capital has resulted in Ethopia having one of the lowest
teledensities in the sub-Saharan region of a mere 0.5%. This is expected to increase to 1% of the
population when the seventh development program is finished. Distribution of

21
telecommunication services is highly skewed with 90% of telephones found in the urban areas
and 50% in Addis Ababa alone. Addis Ababa has 4% of the population.

In terms of institutional development, only one operator, state-owned Ethiopia

Telecommunications Corporation (ETC), which was formed in October 1996 through
Proclamation 10/1996, still serves the market. ETC holds monopolies across all major services
including fixed line, mobile cellular, data, VSAT, and internet. Although the government has
taken a liberalizing stance in principle since 1996, no new operators have established themselves
in Ethiopia since then. Recently the government launched a crackdown on alleged ‘illegal’ cyber
café operators citing that only the incumbent ETC may operate such a service. However, the
government was considering licensing another cellular operator in 2000. Privatization of ETC is
also not planned. Digitization of switches stands at 12%, much lower than most countries in the
region (Ethiotelecom, 2012).

ETC provides national and international telecommunications services, using communication

media of satellite, optical fiber, microwave, multiple access radius, very small aperture, ultra
high frequency and very high frequency. Currently, it provides the following major types of
service packages such as landline and wireless fixed, mobile, internet and data services for its
government, business, and private and other non-government organizations which are locally and
internationally.

This is an exciting time for telecommunications development, since new technologies are
revolutionizing the services worldwide. These fundamental and rapid changes being experienced
by telecommunication markets throughout the world are brought about among other factors
primarily by the technological developments and by competition oriented reform policies. This
creates different expectation on customers' perception towards the product or service of the
company. In these days globalize and borderless market, responsiveness, quality and productivity
are essential for the survival and growth of any organization. These factors depend mainly on the
attraction and retention of customers. Customer satisfaction significantly affects company
performance and survival. Thus customer orientation is the main focus for any successful
business organization to be successful in the market place (Samuel E. ,2006).

22
Through Proclamation 49/96 and 47/99, the government established a regulator, Ethiopia
Telecommunications Agency (ETA) to manage the sector.

2.3.2 Regulatory environment

Telecommunications services were separated from posts and became an autonomous entity under
the Ministry of Transport and Communications by the enactment of Telecommunication
Proclamation No. 131 of 1952. Through this proclamation, a telecommunication entity that
regulates and operates telecommunication services, called the Ethiopian Telecommunication
Board, was established.

The name “Ethiopian Telecommunication Board” was later changed to Ethiopian

Telecommunication Authority, without any change to the entities functions. The Ethiopian
Telecommunication Authority was working as an operator and regulator until the promulgation
of Proclamation No. 49/1996 that established a separate federal telecommunication regulatory
entity called Ethiopian Telecommunication Agency (ETA).

2.3.3 SERVICE
Service has been variously defined by many authors including the following;

 '' A service is the non-material equivalent of a goods. A service provision is an economic

activity that does not result in ownership, and this is what differentiates it form providing
physical goods. It is claimed to be a process that creates benefits by facilitating either a
changes in customers, a change in their physical possessions, materials/services''
Wikipedia, the free encyclopedia Retrieved on 25th December 2012;
 '' Services- broadly defined as acts, deeds, performances, of efforts- have different
characteristics' from goods defined as articles, devices, materials, objects of the things''
( C.Lovelock 2005).
 Services refer to '' economic activities offered by one party to another, most commonly
employing time-based performances to bring about desired results in recipients
themselves or in objects or other assets for which purchasers have responsibility''
( Lovelock and Wirtz 2007).

23
  ''A service is any act or performance that one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Its production may or may
not be tied to a physical product'' Kotler and keller (2006).

2.3.3.1 Customer Services

Customer service is a system of activities that comprises customer support systems, complaint
processing, speed of complaint processing, ease of reporting complaint and friendliness when
reporting complaint (Hanif. M et,.al 2010). Customer services are the opportunities for telecom
service providers that are added to mobile network other than voice services in which contents
are either self produced by service provider or provided through strategic compliance with
service provider. The improved customer services are the focal point of the telecom service
providers for social as well as for economic reasons. From a social point of view, services should
be available to the customers on reasonable terms. As far as economic factor is concerned,
services should satisfy the needs of the customers (Turel and Serenko, 2006). For developing
satisfaction among customers, the telecom service providers need to be extra careful for the
customer services they provide. The study of Ahn Han and Lee (2006) shows that when the
customers, do not get their complaints considered properly, they start looking for other brands. It
happens because either the customer service centers do not handle the complaints or the
customers are not able to address them properly. Sometimes, telecom service providers take
considerably longer time to resolve the problems like network coverage or call quality, the
customers do not wait for long and hence they lose satisfaction with that particular brand (Ahn,
Han and Lee, 2006). Furthermore, the friendly attitude and courteous behavior of the service
workers at service firms leaves a positive impression on the customer which lead towards
customer satisfaction. On the other hand, if a telecom service provider lacks in providing
services (call drops) to its customers it experiences customer churn. Many scholars argued that
service provider should provide customer oriented services in order to heighten up customer
satisfaction.

2.3.3.2 Significance and drivers of service quality

Delivering excellent service quality is widely recognized as a critical business requirement.
Which is essential to corporate dynamic marketplace and marketspace, organization no longer
compete only on cost but more importantly on service quality. In a competitive marketplace

24
where businesses compete for customers, delivering quality service is seen as a key differentiator
and has increasingly become a key element of business strategy (Kotler, 2006).

On the drivers of service quality, the most widely used model is the service-profit chain (SPC),
first proposed by Heskett et al. (1994). It provides one of the most powerful and widely
supported perspectives on the issues overall, the SPC sees organizational internal features as
driver of employee satisfaction, which drivers service quality which is also identified as an
antecedent of customer satisfaction which in turn drives customer loyalty and retention that
eventually leads to profitability and growth.

2.3.3.3 Service quality models

Many different models have been developed to explain and measure service quality in different
setting of business operation. The focus of this thesis is not measuring service quality, but the
need to review literature on service quality models since customer satisfaction has strong relation
from the dimensions of service quality.

2.3.3.3.1 Technical and functional quality model (Gronroos 1994)

Christian Gronroos developed a service quality model that has three components of service
quality, namely; technical quality; functional quality; and image. He maintains that the customer
evaluations of perceived performance of service against his/her perceived service quality result
in a measure of service quality.
Perceived service Perceived service
Expected service
quality

Image

Technical quality Functional quality

What? How?

Source; Gronroos (1984) Figure 2.2 Gronroos model of service quality

25
Technical quality is the quality of what a consumer actually receives as a result of his/her
interaction with the service firm and is important to his/her evaluation of the quality of service.

1. Functional quality is how he/she gets the technical outcome. This is important to his/her
views of service he/she received.
2. Image, which could be referred to as reputational quality, is very important to service
firms and this can be expected to build up mainly by technical and functional quality of
service including the other factors (tradition, ideology, word-of-mouth, pricing and public
relation).

2.3.3.3.2 GAP model (Parasuraman et al 1985)

The GAP model was proposed by Parasuraman, kotler and keller, 2006. The model presupposes
that service quality is the differences between expectation and performance relating to quality
dimensions. These differences are referred to as gaps.

The gaps model conceptualizes five gaps which are;

1. Gap between consumer expectation and management perception -Management does not
always correctly perceive what customers want (not identifying what customers expect).
Example, Hospital administrators may think that patients want better food, but patients
may be more concerned with nurse responsiveness.
2. Gap between management perception and service-quality specification - Management
might correctly perceive customers' wants but not set a performance standard
(inappropriate service quality standard). Example, Hospital administrators may tell the
nurses to give "fast" service without specifying it in minutes.
3. Gap between service-quality specifications and service delivery - Personnel might be
poorly trained, or incapable of or unwilling to meet the standard; or they may be held to
conflicting standards (poor delivery of service quality) such as taking time to listen to
customers and serving them fast.
4. Gap between service delivery and external communications - Consumer expectations are
affected by statements made by company representatives and ads (promises mismatch
delivery). Example, if a hospital brochure shows a beautiful room, but the patient arrives
and finds the room to be cheap and tacky looking, external communications have
distorted the customer's expectations.

26
 5. Gap between perceived service and expected service - This gap occurs when the
consumer misperceives the service quality. Example, the physician may keep visiting the
patient to show care, but the patient may interpret this as an indication that something
really is wrong. This gap depends on size and direction of the four gaps associated with
the delivery of service quality on the marketer's side.

Based on this, the SERVQUAL instrument was developed; it initially consisted of ten
dimensions (Parasuraman et al 1988). The ten were later refined into five dimensions; reliability,
responsiveness, tangibles, assurance (communication, competence, credibility, courtesy, and
security) and empathy which capture access and understanding or knowing the customers.

27
 Word of mouth Personal needs Past experience
communication

Expected service

GAP 5

CONSUMER Perceived service

MARKETER GAP 4
Service delivery (including pre External
GAP 1 and post contacts) communicatio
ns to the
GAP 3 consumer

Translation of perceptions into

service quality specifications

GAP 2

Management perceptions of
the consumer expectations

Source; Parasuraman et al. (1985)

Figure 2.3 The Gap Model of service quality

28
Finally, the relevance of this sub-section for this study is to:

 Better understanding that customer’s access service performance based on their past
experiences, benefits received, service quality and how well queries and complaints are
treated. Thus, customer satisfaction with the mobile services in East Addis Abeba will
assesses based on network quality, service price, procedure in new service provisioning,
after sales service, and service delivery for customer and the following hypothesis are
assume:
 East Addis Abeba customers are satisfied with the mobile telecoms industry
 There is a strong relationship between network quality and customer satisfaction
 There is a strong relationship between service charge price and customer
satisfaction
 There is a strong relationship between after sales service and customer
satisfaction
 There is a strong relationship between procedure in new service provisioning and
customer satisfaction
 There is a strong relationship between network quality and customer satisfaction

29
Figure 2.4 Conceptual framwork (Developed for the study)

30
 Chapter- Three

3 Research Methodology
This section focuses on the research techniques to be employed in this study. It consists of data
type and source, sample size and sampling techniques, data collection instruments, and method
of data analysis.

3.1 Research strategy and design

To investigate the objectives of the study survey research design were implemented. This is
because survey research design helps in collecting data from members of a population and the
researcher was designed with cross sectional survey design for East Addis Abeba mobile service
customers. I plan survey research design, to analyze the collected data the researcher plan to use
a survey method because it used to see the opinion of customers about a specific mobile
telephone service and combined the use of both qualitative and quantitative techniques. This type
of research design is developing based on the purpose of the study. It also being use a mixed
research strategy to collect the necessary data from the selected respondents using judgmental
sampling technique, because, the research will focused on both qualitative and quantitative type
of data.
3.2 Data Source and Type

Since the researcher will relay on both qualitative and quantitative type of data in order to answer
the researches questions and to arrive at concrete conclusions. The researcher will use both
primary and secondary source of data. Primary data will collect via questionnaire from the
selected areas namely; around megenagna. The questionnaire which will develop for the
respondents focusing to identify customer satisfaction and telecom marketing strategy,
Secondary data will gathered from studies done before, like journal, articles, Internet/ libraries,
Ethio telecom intranet, books and other references that are related to the topic.

3.3 Survey Study Design

3.3.1 Population

In research methodology, defining a sample is a sort of efficiency which shown the accuracy of
data collection. Therefore, being a precise for sample and population is an integral part of

31
research design. Population is defined as audience aim for the collection of information sought
by the researcher for the particular problem, (Nguyen.D and Maiya. J, 2011; Malhotra & Birks,
2007). However due to their vague nature individual data collection is impossible to done with
all of them so on the base of target population, a sample size is extracted to represent the
population. Thus, a sample is selected as to exemplify the whole population in a small and
limited number making sure that right respondents has selected depending upon age group,
demographics, gender or many others for accuracy of survey. Therefore the target population for
this study is comprised of 61 million subscribers or customers who are individual users. Out of
the 61 million subscribers in Ethiopia, among this 1.5 million are the research sample frame and
a sample size of 500 respondents selected from East Addis Abeba sites including based on one
accepted formula.

3.3.2 Sample Size and Sampling Technique

As cited by Muhammed, (2011) an important decision that has to be taken while adopting a
sampling technique is about the size of the sample. Appropriate sample size depends on various
factors relating to the subject under investigation like the time aspect, the cost aspect, the degree
of accuracy desired, etc (Gupta and Gupta, 2002). If sample is too small, it might be difficult to
achieve the objectives of analysis. But if it is too large, it may result in resource wastage when
dealing with the sample. Sample error will arise because of not studying the whole population.
Whenever sampling, it is usual to miss some helpful information about the population (Kothari,
1990). The higher the desired precision or the level of confidence, the larger will be the sample
(Browen and Starr, 1983).
To make the study more of accurate and viable, determination of appropriate number of sample
size is important for the researcher. The researcher plan to use yaro yamani formula to decide the
sample size. The calculation is like below
n= N/(1+(Ne2 )) =1500000/(1+1500000*0.0025)= 400
As a result, the researcher proposes 500 respondents with reserve of 100 to strong the
representativeness of the sample.

32
3.4 Data Collection Method

For this study, both primary and secondary data will used. Primary data will gathered via a
questionnaire and secondary data will gathered from studies done before, like journal, articles,
Internet/ libraries, Ethio telecom intranet, books and other references that are related to the topic.
Both open ended and close ended questionnaire will distribute to the sample respondents. The
questionnaire contained open-ended questions that allow the respondents to express their
opinions on various issues that have been presented in narrative analysis technique. The
researcher will distribute the questionnaire to the customers of Ethio telecom mobile service in
East Addis Abeba zone . The questions will structure which requires less effort to complete and
easy for analysis. The questionnaire will developed only in English. The data collection and
questionnaire distribution activity will implemented by the researcher and enumerators will not
hire.
The following procedure will pursued to administer questionnaire to respondents. First, the
researcher approach potential respondents to ask their cooperation in filling the questionnaire and
explained the purpose of collecting data, how the questionnaire will be filled and the
confidentiality of to be obtained information. Then, the questionnaires will distribute and
respondents will ask to furnish information honestly and return the filled up questionnaire.
3.5 Data Processing and Methods of Data Analysis

This section deals with data processing procedure such as editing, coding, classification and
tabulation of the collected data. The process and procedure of assigning numerical or other
symbols come at this part to reduce responses into a limited number of groups/ classes. After
this, the processes of classification of large volume of raw data into classes or groups on the
basis of common characteristics will apply. Finally, the researcher plan to use tabulation to
summarize the raw data which will gather from the respondents.
The researcher used a statistical package for social science (SPSS) version for analysis of data.
The collected data will code and entered in to SPSS for analysis. The researcher was used a
descriptive statistics technique to analyze the quantitative data which will collected from the
respondents. This method of data analysis refers to the use of percentages, frequencies. In
addition to this, collected data’s will analyzed and expressed in tables

33
3.6 Organization of the study

The study generally will include five chapters among this the first three are already stated. In the
chapter one this study the topics like introduction, statement of the problem, research objectives,
research questions, significance of the research and scope of the research are included. In chapter
two this study review of related literature stated and in third chapter research design and
methodologies are briefly expressed. The last two chapters are not done and the chapter four will
be the analysis of different data that gain from different data source. The last chapter will include
findings, conclusions and recommendations of the study.
3.7 Work plan and budget

Item cost remark

Stationeries (pen, paper, ..) 5000
Operational (writing…) 4500
Travel 900
Communication 1000
Unexpected 3000
Total 14400

34
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