Determinants of demand for the choice of mobile telephone service providers in Kiambu District

Abstract

The major objective of the study was to identify which factors affect demand for the choice of different mobile telephone providers and their tariffs in Kiambu District. Though the demand is noted to on the increase, the price and income among other factors theoretically determine the different choices of tariffs; their influence on demand for the different tariffs has not been theoretically established in Kenya. Hence, the study therefore sets out to highlight some of these factors that lead to choice providers and a tariff regime. To achieve the objectives of the study, cross sectional primary data was collected using questionnaires from a sample of 100 respondents. Both descriptive and regression results were given. For the multinomial econometric analysis of the data, only 90 respondents were used because some of respondents gave incomplete data.

Due to the discrete nature of the demand for the choice of various providers and tariff regime, multinomial logit model was adopted to capture the demand for various choices.

The descriptive results revealed lack of consistency on ownership of the mobile telephones across the income divide. An important observation in that respondents chose various provider and tariff regimes in reference to whether they had congestion and they were cheap.

The regression results showed that price of respective mobile telephone service providers calls and convenience were the most significant determinants. The price was found to be negatively related to the choice of a provider and choice of a tariff regime. The study revealed that mobile telephone and landline telephones are compliments rather than substitutes