Antecedents of international mobile Internet tariff type preferences : an empirical study of roaming customers

International roaming (IR) makes it possible to conveniently use mobile communication services (MCS) such as MI access abroad without switching providers, devices or subscriber identity module (SIM) cards. To increase the intensity of competition in the intra-European Union market for IR services, customers will be enabled to buy IR voice and MI access services separately from their existing domestic MCS, as of July, 2014. Specifically, for separated international MI services providers can choose from three different charge types (use-dependent, flat and combination of flat and use-dependent). The purpose of this paper is to empirically examine customer preferences regarding these tariff types for separated international MI services.

Six research questions concerning antecedents of tariff type preferences for separated international MI access services are derived from a literature review. They are empirically addressed by analyzing survey responses obtained for a sample of 496 German-speaking MCS users.

Customers who actively seek for IR price information, consider IR services to be useful, exhibit high use intensities of MI services, do not restrict their MI usage when travelling abroad and tend to prefer flat rates to other pricing schemes. In contrast to these rather “active users”, customers favoring strictly use-dependent tariff plans exhibit significantly lower IR price information seeking efforts and comparatively low use intensities of MI services. Pricing schemes with MI allowances are especially liked by customers who are well-informed regarding and satisfied with IR prices, report above average use intensities of MI services, restrict their MI use abroad, are more likely to switch providers and use MCS mainly for job-related purposes.

The study is based on a German-speaking sample, which deviates from the German adult population. Additionally, the analysis is limited to stated instead of behaviorally revealed preferences for cross-border MI tariff types. Price thresholds influencing whether a cross-border MI tariff is entered into a consumer’s relevant set of offerings are not examined.

The research suggests that mobile network operators are well-advised to offer a clearly structured menu of a limited number of tariffs directed to the three profiled customer segments. Notwithstanding the advantages of such a set of rate plans, international MI tariff schemes with a data volume allowance appear to be generally beneficial both from a provider and an end-customer perspective.

To date, little is known about customer preferences concerning the three rate plan categories and on antecedents of such preferences in the field of MI access abroad. The present study takes a first step to narrowing this knowledge gap.