CHAPTER ONE

1.1   INTRODUCTION

Nigeria has emerged as the fastest growing telecommunication market on the African continent. The telecoms industry has experienced a dramatic increase in telephone lines from about 10,000 new lines per annum between 1960 and 2000, to 1 million new lines per annum in the last three years. With a total of 2.8million connected telephone lines as at June 2003, compared to only 400,000 in 1999, the growth in telecoms service industry is unprecedented (NCC, 2003 vii). As at December, 2004 10million subscribers have been actively connected in Nigeria (The Guardian, 2004).

At the end of 1997, Nigeria had only 0.38 lines per 100 inhabitants (Business Day, S. A, 2002). The low level of supply of telephone lines in previous years was a major hindrance to economic growth and productivity. The sole provider, Nigeria Telecommunications Ltd, was government owned and to get connected, consumers often had to wait 2 - 3 years before supply was affected. When the telephone line was eventually installed, maintaining service was a challenge.

However, the parlous state of the industry began to be addressed in 1992 when the telecommunications industry was opened to liberalization with the establishment of the Nigerian Communications Commission (NCC), a body charged with the direct responsibility of regulating the sector and creating an enabling environment for private sector participation in the

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industry. The legal instrument for this and the subsequent deregulation of the sector was Decree 75 of 1992 (now replaced with the Telecomms Act 2003).

A major landmark was however achieved with the auction of four GSM licenses in January, 2001. Widely adjudged as transparent, fair, competitive and successful, the introduction of GSM has been the catalyst of a fresh wave of investments at a scale never witnessed before. As at the end of 2002, the annual market growth rate is 503% for mobile and 17% for fixed.

The  types  of  telecommunication  services  -available  in  the

Nigerian environment are:

-             Fixed telephony (including voice and data services)

-             Mobile telephony (analog and digital)

-             Internet services (including dial up, wireless, radio and VSAT services)

-             Value added services (including payphones, paging, voicemail, and prepaid calling card services.

The high market growth rate has prompted high rate of new entrants and thus competition. This has necessitated the importance of studies of consumer preferences and disposition towards the telecommunication sector in Nigeria. The import of this study can therefore not be over-emphasised.

1.2   STATEMENT OF THE PROBLEM

The essence of any organisation lies outside the system, (December 1954: 35). In agreement with this, Bello, 1988 also sees an organisation as an open system. The survival of the

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organisation is ensured by its ability to create and maintain customers, (Oni, 1999). This is achieved by the organisation using available resources not only to produce the desired goods and services but also to satisfy the consumers in order to sustain and influence the purchase decision of present and prospective customers. This duty of consumer satisfaction by telecommunication companies in Nigeria have been found to be deficient resulting in many complaints by the subscribers. This constitutes the major problem of this study.

A major challenge and problem faced by the telecommunications service providers in Nigeria is how to influence the purchase behaviour of consumers in favour of the service and brand they offer. Hence a detailed analysis of the consumer needs are needed before attempts are made by providers to satisfy the consumers and translate into purchase actions.

Providers also need to analyse how consumers gather information regarding various alternatives, response to marketing communications and the consumers reasons for purchasing the service.

This study shall attempt to provide solutions to all these consumer analytical dispositions. A solution to these stated problems would elucidate the objectives of this thesis.

1.3   OBJECTIVE OF THE STUDY

Modem marketing calls for more than developing a good product, pricing it attractively, and making it accessible to target customers. Organisations must satisfy and positively influence

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the purchase decisions of their present and prospective customers.

Throughout the life cycle of a product customer relationship towards understanding and satisfaction is of essence. In a perfectly competitive environment, a versatile management use consumer satisfaction to position their products. This satisfaction in the telecommunication industry can come in a number of ways, among which are, customer care, prompt connection, little or no drop calls, value delivery, accessible and affordable recharging, prompt response to complaints and provision of reward to customers, among others.

The main objective of this study is to find out the main factors influencing consumer purchase decision telecommunication services provided by different companies operating in Nigeria. Specifically

The study aim to:

i.            Determine the processes involved in making (a telecommunication service) purchase decision by subscribers in Nigeria.

ii.          Determine the functionality of telecommunication services to subscribers in Nigeria.

iii.        Determine -hour-- consumers gather information regarding various brands of telecommunication services

iv.        Determine where subscribers prefer to purchase telephone lines and recharged cards and;

v.          Determine the post purchase reactions of the telecommunication subscribers in Nigeria.

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1.4   RESEARCH QUESTIONS

Research questions are asked in order to generate sufficient data directed towards attaining the objective of the study. The following questions are:

i.            How do consumer arise purchase a telephone lines?

ii.          How do consumers know about the existence of the brand they use?

iii.        How do consumers assess the quality of the brand they use?

iv.        How do consumers buy the telephone lines and where do they buy the recharged cards?

v.          What are the post purchase behaviour of consumers?

1.5   HYPOTHESIS

By definition, hypothesis is a conjectural or tentative statement concerning the relationship between some variables of interest, usually dependent and independent variables.

Three independent telecommunication service quality characteristics shall be used to test if each has significant effect on consumer purchase decision (dependent variable) if delivered by the service providers.

The three telecommunication service quality characteristics are:

i.            Functionality

ii.          Customer care

iii.        Promotion

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The null hypotheses tested in this can be stated thus: