research report-user perception and factors influencing adoption of converged ict services

7/27/2019 Research Report-User Perception and Factors Influencing Adoption of Converged ICT Services

1/22

P a g e1

xzxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

PERCEPTION OF USERS ABOUT CONVERGED

SERVICES (COMBINED IT, TELECOM & MULTI-

MEDIA SERVICES) & FACTORS AFFECTING ITS

ADOPTION-CASE STUDY OF PAKISTANI MARKET

Fawad Ahmad Khan Niazi

AUIC-12FL-MS-MGT-0048

Submitted to:

Dr. Muhammad Zaheer Akhtar &

Ms. Iffat Choudhry

Abasyn University-Islamabad Campus

April, 2013


2/22

P a g e2

THE RESEARCH PAPER IS THE REQUIREMENT FOR COMPLETION OF

THE COURSE: ADVACED RESEARCH METHODOLOGY IN M.S.

(MANAGEMENT) PROGRAMME, 2012 2013)

Dedication

I dedicate this research paper to my supervisors-Dr. Muhammad Zaheer Akhtar

& Ms. Iffat Choudhry, parents and last but not least, my seniors especially

Mr. Muhammad Shamim, Mr. Noor-ud-Din Baqai, Mr. Mudassar

Hussain & Dr. Syed Ismail Shah- who guide me throughout my life/career

and provide me the opportunity to learn and grow.


3/22

P a g e3

Introduction:

The broadband (high speed internet) has been the information highways in

the knowledge base society and promised great opportunities for the common

people by providing economical and instant access to valuable information

and innovative services in Pakistan. Access and adoption of broadband has

empowered the people of Pakistan but at the same time created challenges

such as digital divide (gap among the have andhave not). This challenge

is of greater important as the socio-economic benefits have been associated

with the adoption of broadband and over the top broadband enabled

innovative/converged service in Pakistan

The efforts of the public and private sector in terms of investment on

Information & Communication Technologies (ICT) infrastructure and

improvement of related policy & legislative framework has considerably

improved geographical coverage of ICT services; however, the adoption &

diffusion of broadband & over the top converged servicesis low in Pakistan

that is causing difficulty in delivery of associated socio-economic benefits to

common people of Pakistan.

This issue is the prime focus of multi-lateral organizations (Ref. United

Nations/UNDPs Millennium Development Goals (MDGs) for 2015

www.undp.org/content/undp/en/home/mdgoverview, WSIS initiatives &

recent ITU/UN technical assistance for broadband plan of Pakistan) as well as

national Government organizations (Ref. fiscal incentives and other initiatives

taken by Ministry of ITs under the Broadband Policy, 2004

www.moitt.gov.pk, regulatory frameworks prepared in line with policies

www.pta.gov.pk; and USF Broadband Programwww.usf.org.pk/Broadband-

Programme.aspxand technical R&D projectswww.nictrdf.org.pk).
http://www.undp.org/content/undp/en/home/mdgoverviewhttp://www.undp.org/content/undp/en/home/mdgoverviewhttp://www.moitt.gov.pk/http://www.moitt.gov.pk/http://www.pta.gov.pk/http://www.pta.gov.pk/http://www.usf.org.pk/Broadband-Programme.aspxhttp://www.usf.org.pk/Broadband-Programme.aspxhttp://www.usf.org.pk/Broadband-Programme.aspxhttp://www.usf.org.pk/Broadband-Programme.aspxhttp://www.nictrdf.org.pk/http://www.nictrdf.org.pk/http://www.nictrdf.org.pk/http://www.nictrdf.org.pk/http://www.usf.org.pk/Broadband-Programme.aspxhttp://www.usf.org.pk/Broadband-Programme.aspxhttp://www.pta.gov.pk/http://www.moitt.gov.pk/http://www.undp.org/content/undp/en/home/mdgoverview


4/22

P a g e4

The Broadband policy of Pakistan is intended to boost the proliferation of

broadband services through measures to bring about reduction in bandwidth

tariffs and other incentives along with simplification in the licensing process

for the provision of data services. The IT policy of Pakistan is aimed at

harnessing the potential of Information Technology as a key contributor to

development of Pakistan and covers all the major areas of IT implementation.

The guiding principle of the policies is that the government shall be the

facilitator and enabler to encourage the private sector to drive the

development in the IT and Telecommunication sectors.

Private sector service providers (IT & Telecom operators and System

Integrators) are also striving for promotion of internet/broadband for its

adoption in Pakistan. Studies have been conducted worldwide to ascertain the

relationship between the adoption of the broadband/ICT services and socio-

economic uplift of society as well as the reason of low adoption rate in

Pakistan; however, the researchers did not found Pakistan specific research

with the focus on the following critical questions:

What is the perception of internet/broadband users about the availableconverged services utilization and their preferred choices in terms of

services, content, technology and service provider; and

What are the key determinants affecting their choice to adopt/continueto use the converged services.

The current study attempts to answer the above given questions that also

constitutes the scope of the research with the following objectives:

Objective-I: To understand the perception of broadband users (existingand potential users of the innovative services) about the converged

services;


5/22

P a g e5

Objective-II: To understand the choices of broadband users in terms ofdifferent parameters that can be further explored by the researchers.

Objective-III: Identification and testing of degree of influence the keyvariables have on customers buying intention/adoption of converged

services.

The overall objective of the study is to help all stakeholders in improvement of

relevant policies and business plan for sector development, gender

mainstreaming, youth empowerment, skill development and creation of job

opportunities.

Conceptual Model

Converged Services in Pakistan - Representative Service-Triple Play Service(TPS-Internet, telephone & IPTV/video)

Relationship among Perception of potential/current users, key determinantsof adoption and their choices are proposed to be themes for future studies.


6/22

P a g e6

The service providers/operators are providing the converged services

through different strategies (acquisition of banks-EasyPaisa, MobiCash etc.

and revenue sharing agreements/strategic alliances with multimedia services

providers e.g. Mobile TV etc.).

As depicted in the conceptual model, the triple play service (TPS) has been

taken as the representative service of such converged services. Triple Play

Service (TPS) is one of the converged services available in Pakistan that is

currently being provided by telecom operators over the high speed internet

i.e. broadband. TPS is combined/bundled package of telephone, internet and

other internet enabled value added services such as Internet protocol (IP)

based TV i.e. IPTV.

The research questions were primarily focused on following inter-related

aspects of focused segment and converged services value chain:

Questions related to Objective-I & II:

o How the consumers are using internet/broadband which is the mediumon which TPS are to be delivered;

o What are the consumers perception about the available converged servicesto know about the aspects like utilization trends; and

o What are their preferred choices in terms of service, content, technologyand service provider; and

Questions related to Objective-III: Factors affecting the broadband users

buying intention/adoption of converged services:

o What are the key determinants/factors affecting their intention tobuy/adopt or continue to use the converged services?

Keeping in view the initial study and general discussion with the broadband

operators, hypothesis were made to test the influence of the identified key

determinants-Independent Variable on the Decisions to continue/adopt


7/22

P a g e7

prescribed in the theoretical framework. The relationship between the key

factors of customers buying intention/adoption is tested whereas, the

relationship among all the parameters in value chain (i.e. objective-I, II & III)

would be the themes for future studies. For the purpose of this study,

following hypothesis are tested:

Hypothesis-I: Satisfaction with the broadband service provider, giving confidence to

buy more services from the same operator has significant influence on broadband

users buying intention/adoption of the TPS;

Hypothesis-II: Free or discounted initial package for test & trial (Trial-ability) has

significant influence on broadband users buying intention/adoption of the TPS;

Hypothesis-III: Assurance of being charged fairly (knowledge of overall monthly

package of add-on/bundled services in comparison to separate individual subscription)

has significant influence on broadband users buying intention/adoption of the TPS;

Hypothesis-IV: 24 hours Customer Service to mitigate the perceived risk that failure

of internet service will disrupt all services for quite a long time has significant

influence on broadband users buying intention/adoption of the TPS;

Hypothesis-V: Minimum interdependency of bundled services i.e. arrangementsmade by operators to mitigate the risk of failure of one service may cause failure of all

services has significant influence on broadband users buying intention/adoption of

the TPS;

Hypothesis-VI: Up-front package price i.e. initial installation/equipment cost has

significant influence on broadband users buying intention/adoption of the TPS;

Hypothesis-VII: Quality of Service (QoS) of telephone, video and internet when

combined as TPS has significant influence on broadband users buyingintention/adoption of the TPS;

Hypothesis-VIII: Ability to extend the service at multiple points with security&

privacy of data and information has significant influence on broadband users buying

intention/adoption of the TPS;


8/22

P a g e8

In other words, for anyoperator offering/willing to offer Triple Play Services

(TPS) i.e. bundled/converged services to its existing or potential customers in

Pakistan;Ifthe consumer have the perception that operator has the capability to fulfill

the promised customer satisfaction, trial-ability of service, fair charging ofservices, 24 hours customer support, quality of Service (QoS), Extendibility at

multiple points in vicinity with security & privacy of information, un-interrupted

/minimally interdependent bundled services at economical initial

installation/equipment cost; then it will serve as key determinant of their decision to

adopt/continue to use the TPS i.e. converged services in Pakistan.

Theoretical Model:

This study will help all stakeholders of the converged services value chain inbetter understanding of the market situation for refinement in policies,

regulations and current diversification strategies of the content

producers/publishers and telephone, internet & TV service providers in

Pakistan.

Hypothesis I to VIII

Key Determinants/Factor

significant influence

Broadbandusers' intention

tobuy/adopt/cont

inue to use theTPS


9/22

P a g e9

Methodology of Research:

This is a cross sectional study to ascertain the key determinants/factors that

has significant influence on buying intention/adoption of TPS/Converged

services provided over broadband in Pakistan. The quantitative approach and

survey through the questionnaire is adopted for data collection.

Respondents:

The respondents were selected randomly from the post graduate level

students of different universities as well as professionals (decision makers in

the family), falling in the age bracket of 20-35 years from the twin cities of

Rawalpindi and Islamabad.

The total 70 questionnaires were disseminated and 50 people responded back

with response rate of 70%. After initial review, total 45 responses were

selected and 5 were rejected as they were not filled properly. It is imperative

to mention that researcher may take this study further by studying

relationship among the objective I, II & III or by simply increasing the

respondents from twin cities as well as from other cities of all provinces.

The limitation in collection of desired quality of data was that questionnaires

were neither got filled with assistance to the researcher nor interviews were

conducted to provide immediate clarification on the queries that has resultedin considerable percentage of reply in the category of No Idea/No

Response. The objective of independent responses collection was to eliminate

the element of researchers biasness in data collections stage.


10/22

P a g e10

Data Analysis:

SPSS software is used to enter the data in a structured way and descriptive

analysis (ratios and charts) of the data is being done along with the regression

and correlation testing; however, interested researcher may apply other data

analysis techniques for further interpretations and inferences.

Future Implications:

The result of this study may be used by the service providers for strategy

making to tap the opportunities in the market.

Review of Literature:

A similar study was conducted in the Korea when the IPTV services were

launched and IPTV services were taken as representative of innovative

converged services. The objective was to understand the diffusion of IPTV

service by combining the adoption-diffusion model and use-diffusion model

of innovation. Non-users of IPTV were surveyed using the adoption-diffusion

model to get the idea about the factors influencing their intention to subscribe

to the IPTV service; whereas, the users of IPTV were surveyed using the use-

diffusion model to know about the factors influencing their satisfaction level

and intention to continue using the service. During the study, it was observed

that trial-ability, household innovativeness, perceived risk were

determinants of the user satisfaction and perceived ease-of-use was

mediating factor. Whereas, in the use-diffusion model, complementarities and

communication were shown as determinant of users satisfaction. They found

that consumers intention to re-use IPTV was strongly influenced by its

relative advantage and perceived risks. (Motohashi K, Lee Deog, Sawang Yeong

& Kim Seung, Innovative converged service and its adoption, use and diffusion: a

holistic approach to diffusion of innovations, combining adoption-diffusion and use-


11/22

P a g e11

diffusion paradigms,Journal of Business Economics and Management, Vol 13(2):

308-333, 2012).

The focus of the researcher in this study is to develop and test hypothesis inthe context of the findings of the study in Korea and researchers own

observations and to test them in the environment of Pakistan while knowing

about the customer. The key determinants/hypothesis are identified that

presumably have strong influence in building perception of relative

advantage or mitigation of risks; and hence, have significant positive

influence on the intention to buy/adopt or continue to use TPS-Converged

services in Pakistan.

Results and Discussions:

PART-I: Knowledge about the consumer usage patterns:

o How the consumers are using internet/broadband which is the mediumon which TPS are to be delivered;

o What are the consumers perception about the available converged servicesto know about the aspects like utilization trends; and what are their

preferred choices in terms of service, content, technology and service

provider; The results are as under:

i) Knowledge about TPS/IPTV and source of information:The results show that most of the respondents (60%) were those who had the

knowledge about the TPS/IPTV services. Regarding the source of information

following is the response:

Newspaper TV Commercial Friend Other

8% 56% 33% 3%


12/22

P a g e12

In view of above, it is anticipated that most useful media to target the

potential customer is TV Commercial (56% respondents quoted source) for

greater reach and coverage of target market segment.

ii) Will you Recommend IPTV service?Strongly

RecommendRecommend

NeitherRecommend Nor

DiscourageDiscourage

StronglyDiscourage

7% 60% 33% 0% 0%

The respondent had no disliking and hence it is observed that the services

being evaluated are not in clash with the norms and culture so there are bright

chances of adoption by all strata of the society in short and long run.

iii) a) Likeness to buy/continue to use IPTV service from existing B.B.Service Provider & Preferred Display Device:

Yes No TV Mobile Computer No Response

38% 62% 44% 13% 9% 33%

b) Existing Telecom Service ProviderPTCL Wateen Nayatel Witribe Qubee Others

Broadband ServiceProvider (% Share)

67% 4% 4% 16% 4% 4%

The majority of respondent (62%) were not likely to buy TPS in the current

scenario; however, the persons with intensions to buy (38%) also represents

huge potential. Moreover, 44% respondents still prefer to use TV as the

display/access device; hence, there is huge potential of smart TV devices. The

other important aspect is that mobile devices are getting popular than

computers/laptops and hence showing positive trend towards future all

mobile stage and peoplesincreasing need of consumption on the move in

busy life style.


13/22

P a g e13

iv) Level of satisfaction in terms of quality of existing BroadbandService:

Excellent GoodNeitherGood

nor BadAverage Poor No Idea

9% 58% 4% 24% 2% 2%

This information was gathered to get the idea whether there is any link

between the satisfaction with the quality of current services provided by the

operator to possibilities of further innovative/add in services. However, there

seems no strong positive relationship exists as 67% respondent ranked quality

of existing broadband service as Excellent (9%) and Good(58%); whereas, only

38% showed likeliness of buying TPS.

v) a) Respondents Family Information:-Family Composition: Based on 45 Respondents dataNumber ofpersons in agegroups

5 to 10 11 to 20 21 to 30 31 to 40 41 & Above Total

No. of males ineach age bracket 7 24 41 17 24 113

No. of females ineach age bracket

14 19 31 14 32 110

Total people in agebrackets

21 43 72 31 56 223

In percentageterms of all people

9% 19% 32% 14% 25%

Following are the findings related to the family composition of the

respondents that can be further explored by increasing the number of

respondents hailing from all provinces:

~50% of population are below 30 years age [Huge future market] ~32% are in the age group of 21-30 years [Decision makers]


14/22

P a g e14

~19% are in teen-age [Education, Sports, Multimedia & Entertainmentmay be key content to be aggregated by the service providers]

~9% are children [Kids education, Competitions and entertainmentmarket]

~39% are above 40 years of age with specific needs and demand ofcontrols [Potential Market of customized devices like one-click

shortcuts for applications, user-interfaces with big font sizes and other

services suitable for persons with disabilities associated with old

age/short-sightedness or parenting etc].

b) Respondents/Family experience of using Broadband and Averagetime spent over internet:

On average the respondents were using broadband since ~4 years andused to spend ~5 hours daily over internet.

c) Respondents/Family Income (Rs):10-20K 21-40K 41-60K 61-80K 81K & Above

2% 20% 20% 22% 36%

~78% respondents falls in the range of 40K Rs and above category that

showed that in Rawalpindi/Islamabad, there a real demand to be

exploited by the service providers.

d) Other Useful Information:Average Monthly Bill 500-1K 1001-1.5K 1501-2k 2001-2.5K 2501-above

%age terms (users in billing range) 27% 31% 22% 4% 11%

Internet Speed 2MB

%age terms (users in billing range) 7% 44% 24% 24%

Download Capacity LimitedUnlimite

dNo

Resp

%age terms (Limited/Unlimited) 22% 71% 7%


15/22

P a g e15

The people dont like restrictions like limit on downloading or speed. The

speed and data download is increasing so do the possibilities of usage of

innovative converged services in Pakistan.

e) Usage of Value Added ServicesYes No No Resp

13% 71% 16%

Only 13% were found to be using some value added services as

converged/bundled TPS services that shows that market is still in its

nascent stage.

E-Security E-Learning IPTV

17% 17% 67%

Among the people who were using the converged/value added services;

IPTV was ranked 1 while e-learning and e-security were the other services.

f) Family Members Earning Money On-line:Yes No

9% 91%

It was assumed that people would have been earning on-line, especially theyoung male and females to see the uptake; however, respondent feedback did

not show the desired result. Rather, it is clear that 91% people are not earning

money on-line.

vi) Consumer Preferences:Choice of Latest Technologies at a relatively higher cost (3G SIM- Latest

Technology /3G Adoption Prospects)

Eager to buyat any cost

Rank

WillConsider

whenavailable Rank

Will neverbuy

Expensive3G SIM Rank

NoIdea/Other

Rank

29% 2 51% 1 7% 4 13% 3


16/22

P a g e16

Most of the respondents are either ready to consider (51%) or in some cases

adopt (29%) new technologies like 3G (mobile broadband).

vii) Users Currently experiencing or Willing to useConverged/Bundled Services

ParameterCurrent

lyUsing

Willingto Use

NoIdea

NoResponse

Rankin

termsof

currentusage

Rank interms of

willingnessto use

Research &Education

93% 9% 0% 2%1 3

On-lineBusiness/work

89% 18% 20% 11%2 2

Entertainment 62% 18% 7% 13% 3 2

Games 51% 18% 22% 18% 4 2

Socializing(facebook etc.)

42% 2% 0% 4%5 4

BankingTransaction

36% 24% 27% 13%6 1

Scheduling doctor

appointment22% 24% 44% 16%

7 1

Other (Skype -Group study,Lectures, learninghow to repairthings etc.)

13% 9% 0% 69% 8 3

The results shows that research and education, on-line business/work

(facilitative assignments, as 91% are not earning directly) and entertainment

are top three in current usage ranking; whereas, in terms of potential services

to be bundled are as under:-

1st) e-banking & e-health;

2nd) e-commerce, on-line games & entertainment; and


17/22

P a g e17

3rd) Research & distance learning as well as Skype/YouTube type

portals for useful information gathering.

Operator should preferably focus on e-health and e-banking services through

commonly used devices such as TV& Laptops/Mobiles over broadband.

viii) Preference of Local Language interface/content:Yes No

58% 42%

Parameter

Intl'

Movie /Drama

Kids

Education &Competition

VideoGames

LocationBased

Services

usingsame

TV/MobileServices

UserInterface/

Applicationfor Elders /People withDisabilities

Others

In terms ofpercentage ofrespondents

51% 47% 16% 40% 44% 13%

Ranking(in terms ofusers choice

of content) 1 2 5 4 3 6

Respondents were asked to choose as many as they like to see in local

language interface/content; therefore, the table showed the %age of the

respondent showing preference/likeness to use the content/language,

preferably purposefully developed content/interface for meeting the local

community demand/needs.

Here, very interesting results have found as you may notice that international

movies/dramas, that mostly would be just dubbing, have 1st ranking, then

comes 2nd) Kids education and competition, 3rd) User-Interface/Applications

for the elders or persons with disabilities and 4 th) location/closed group based

interactive services using the same TV/Mobile devices.


18/22

P a g e18

This is also eminent from the popularity of Turkish dramas in current days in

Pakistan and for the rest of services; operators should come up with new

offerings to tap the market potential in other areas especially for people in the

old age or living with sort of disabilities as well as those interested in location

based services.

ix) Preferred Service Provider:1st

Choice

furtherranking of

brands

2ndChoice

3rdChoice

No Response

Mobileoperators

Brand

51% optMobile

Operatoras 1st

Choice

1. Mobilink2. Telenor3. Ufone4. Warid5. Zong

4% optMobile

Operatoras 2ndChoice

2% optMobile

Operatoras 3rdChoice

42%

As a matter of first choice 51% respondents like to use the converged services

from the brand of mobile operators; however, it is important that 42% people

did not respond to question properly and hence, the results may need

re-validation after re-phrasing the question or supervised interview session.

Other preferred brands were the brands of TV/Media companies (GEO,

Duniya etc.) and Manufacturers brand (Nokia, Sony etc.)

PART-II: Factors affecting the broadband users buying intention/adoption

of converged services: What are the key determinants/factors affecting their

intention to buy/adopt or continue to use the converged services?


19/22

P a g e19

Level of Significance/Influence

Parameters-Keydeterminants

VeryHigh

High Medium Low Very LowNo

Response

Initial installation cost 16% 29% 38% 7% 7% 4%

Minimum inter-dependance ofbundled services

22% 31% 27% 9% 2% 9%

Knowing exact overallmonthly packageprices - Assurance ofbeing charged fairlyfor add on services

24% 33% 24% 4% 4% 9%

Ability to extendservices at multiplepoints with security &

privacy

27% 24% 33% 7% 4% 4%

Satisfaction withCurrent BB Operatorgiving confidence tobuy more innovativeservices from sameoperator

33% 24% 29% 4% 2% 7%

Free or discountedinitial package for testand trial

38% 31% 18% 7% 2% 4%

Quality of Service(QoS)

38% 24% 29% 2% 2% 4%

24 Hours CustomerService

40% 27% 16% 4% 7% 7%

This table shows the level of significant/influence that respondents thought

the given factors/parameters have on their buying intentions/decision to

adopt/continue to use. The ranking of the above parameters may be done in

several ways.


20/22

P a g e20

i) Ranking in terms of Highest Priority Given by Respondents:

Parameter

Ranking in terms ofHighest Priority

Given byRespondents

AInitial installation cost

7th

(Weak PositiveInfluence)

BMinimum inter-dependence of bundled services

6th


CKnowing exact overall monthly package prices -

Assurance of being charged fairly for add on services

5th

(Weak Positive

Influence)D

Ability to extend services at multiple points withsecurity & privacy

4th


ESatisfaction with Current BB Operator giving

confidence to buy more innovative services from sameoperator

3rd(Strong Positive

Influence)

FFree or discounted initial package for test and trial

2nd(Very Strong

Positive Influence)G

Quality of Service (QoS)2nd

(Very StrongPositive Influence)

H24 Hours Customer Service

1st(Very Strong

Positive Influence)

All the above factors contributes to the decision making but the Parameter E,

F, G & H are very strong positive influence on the potential customer. This is

further corroborated by putting the data into the statistical tool (SPSS). The

results using SPSS are attached at Annex-I


21/22

P a g e21

Conclusion:

In view of above results and discussion, it is observed that:

1)Ifthe consumer have the perception that operator has the capability to fulfillthe promised customer satisfaction, trial-ability of service, 24 hours

customer support, quality of Service (QoS); then it will have strong

positive influence on and serve as key determinant and have significant

influence on broadband users buying intention/adoption of the TPS i.e.

converged services in Pakistan.

2)Ifthe consumer have the perception that operator has the capability to fulfillthe promised fair charging of services,Extendibility at multiple points in

vicinity with security & privacy of information, un-interrupted /minimally

interdependent bundled services at economical initial installation/equipment

cost; then it will have relatively weak positive influence and have

relatively less significant influence on broadband users buying

intention/adoption of the TPS i.e. converged services in Pakistan.

The importance of the trial-ability, established earlier, has been supported

with this study as well. This shows that broadband users wants to move

ahead and adopt the value added services in the form of bundled services but

are bit cautious due to fear of technology or cost of experiencing/trial the

service. The operators should offer some time-bound package and training to

give them feeler with training to help user in his first flight.

The operators/service providers should concentrate on all the given aspects to

establish themselves as market leader; however, respondents are demanding

more efforts on the part of service providers to provide efficient 24-hour

customer service, QoS-Speed, Downloading capacity & throughput and


22/22

P a g e22

User-Experience and likely to buy interactive as well as location based

services from the companies with recognized brands.

research report-user perception and factors influencing adoption of converged ict services

Documents