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Mobile Virtual Network Operators acceptance in Egypt

By Mohamed Sayed Helmy Supervised by Dr. Saneya El-Galaly

This paper was submitted in partial fulfillment of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)


at

Maastricht School of Management, MsM Maastricht, The Netherlands


Maastricht School of Management P.O. Box 1203 6201 BE Maastricht The Netherlands

April 2011

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The Thesis is displayed at the library of the Regional IT Institute to optimize the added-value to the reader and to leverage his/her knowledge in the subject covered. For further information about the Theses, their contents, value, grade and overall quality you are advised to contact the Academic Degree Programs Manager.

Copyright Maastricht School of Management and Regional IT Institute, 2008. All rights reserved. No part of this Thesis may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise without the prior permission in written of Maastricht School of Management and/or the Regional IT Institute.

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ACKNWOLEDGMENNT
I owe all the gratitude to God for putting me on the MBA road and helping me finish it. The journey was short in time but rich in personal and technical experience, thanks to all my Father and Mother, my Wife and my little Youssef for their love, patience and support before and through the MBA time. Thanks to Dr. Saneya El Galaly, her extra ordinary support, patience and advice enlightened my way and made this thesis possible; I think she is simply the best supervisor. I would like to thank Ashraf Elsafty my research assistant who pushed me when I was late, and simplified the difficult areas for me. Thanks to my friend Khaled Magdy for his support, he is the statistics magician who unlocked the SPSS for me. And finally, warm thanks to all professors teachers and assistants at MSM, whom with their support during the past years, I broadened my spectrum of business knowledge.

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ABSTRACT
Mobile Network Virtual Operator is a recent business model in the telecom industry that enables non telecom players to utilize their brands in the telecom business and resell mobile minutes and mobile services directly to customers, this model has succeeded in North America, Europe and few Asian countries but it is not significantly present in the Gulf and north Africa region, and not in Egypt specifically. Egypt has many factors that facilitate Mobile Virtual Operators inception, so it is expected it starts soon, brand owners and business firms that intend to join the mobile business may not know if customers will have the intention to use mobile services from an absolute non telecom player that might be a media service provider, a retail chain or even a fashion brand; Objective of this research is to find out if the Egyptian customers would accept Mobile Virtual Operators concept. The research uses a model based on constructs from the Unified Theory of Acceptance and Use of Technology (Venkatesh, 2003) that were adapted for the research topic and local market, and complemented with components from another use intention model (Mallat, 2008) such as cost and trust. This study shows that there are specific factors that affect the customers intention to use the Mobile Virtual Operator such as: innovative services and offers, effort expectations, trust and switching cost. The outcome of this research means that new virtual operators shall consider offering innovative services, high quality voice communications, attractive offers; they shall also consider that users trust in their brand will strengthen their intention to use, and compensate customers for the cost of switching from their current mobile operator, last but not least virtual operator shall provide an extraordinary customer care service as it might be a key differentiator against other operators.

Keywords: Egypt, MVNO, MVNO acceptance, Mobile Virtual Operator, Mobile Virtual Network Operator, UTAUT, Mallat

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TABLE OF CONTENT
ACKNWOLEDGMENNT ................................................................................................................................ II ABSTRACT .....................................................................................................................................................III TABLE OF CONTENT ...................................................................................................................................IV LIST OF TABLES ......................................................................................................................................... VII LIST OF FIGURES ...................................................................................................................................... VIII LIST OF ABBREVIATIONS ............................................................................................................................IX 1. CHAPTER 1: INTRODUCTION ............................................................................................................. 1 1.1 1.2 1.3 1.4 An overview ................................................................................................................................. 1 Problem Definition ..................................................................................................................... 1 Research Objective...................................................................................................................... 1 Theoretical Framework .............................................................................................................. 1 Model variables.................................................................................................................... 2

1.4.1

Dependent variable ............................................................................................................................. 2 Independent variables ........................................................................................................................ 2 1.4.2 1.4.3 1.5 1.5.1 1.5.2 1.6 1.6.1 1.6.2 1.6.3 1.7 2. Research assumptions ........................................................................................................ 3 Research limitations ............................................................................................................ 3 Major questions ................................................................................................................... 3 Minor questions................................................................................................................... 3 Research type ....................................................................................................................... 4 Sampling ............................................................................................................................... 4 Data analysis method.......................................................................................................... 4

Research questions ...................................................................................................................... 3

Research Methodology ............................................................................................................... 4

Thesis Structure ........................................................................................................................... 5

CHAPTER 2: LITERATURE REVIEW .................................................................................................... 6 2.1 Introduction & industry outlook............................................................................................... 6 MVNO Definition .............................................................................................................. 6 Scope of the study............................................................................................................... 7 Significance of the research ............................................................................................... 7 Mobile Virtual Operators overview worldwide .............................................................. 7 Mobile Virtual Operators strategies ................................................................................. 8 Theory of Reasoned Action & Theory of Planned Behavior ..................................... 10 iv 2.1.1 2.1.2 2.1.3 2.1.4 2.1.5 2.2 2.2.1

Theories defined .......................................................................................................................... 9

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2.2.2 2.2.3 2.2.4 2.2.5 2.3 2.3.1 2.3.2 2.3.3 2.4 2.4.1 2.4.2 3. 3.1 3.2 3.3 3.4

Technology Acceptance Model....................................................................................... 11 Unified Theory of Acceptance and Use of Technology ............................................. 12 Is UTAUT suitable and reliable? .................................................................................... 15 Mallat Use Intention model ............................................................................................. 15 Mobile Virtual Operators strategy .................................................................................. 17 Mobile Virtual Operator services acceptance ............................................................... 18 Gaps in the research ......................................................................................................... 18 Market preconditions ....................................................................................................... 18 Mobile Virtual Operators in Egypt ................................................................................ 19

Previous research & Cases ....................................................................................................... 17

Local case/Business .................................................................................................................. 18

CHAPTER 3: THEORETICAL FRAMEWORK AND RESEARCH DESIGN .......................................... 20 Introduction ............................................................................................................................... 20 Problem definition .................................................................................................................... 20 Research objective ..................................................................................................................... 20 Theoretical framework ............................................................................................................. 20 Dependent variables ......................................................................................................... 21 Independent variables ...................................................................................................... 21 Moderating variables......................................................................................................... 23 Research assumptions ...................................................................................................... 23 Research limitations .......................................................................................................... 23 Major questions ................................................................................................................. 23 Minor questions................................................................................................................. 23 Hypothesis ......................................................................................................................... 24 Research type ..................................................................................................................... 25 Data collection instrument and source .......................................................................... 26 Sampling methods............................................................................................................. 27 Data analysis methods ...................................................................................................... 28

3.4.1 3.4.2 3.4.3 3.4.4 3.4.5 3.5 3.5.1 3.5.2 3.5.3 3.6 3.6.1 3.6.2 3.6.3 3.6.4 4.

Research questions .................................................................................................................... 23

Research methodology ............................................................................................................. 25

CHAPTER 4: DATA ANALYSIS, FINDING AND DISCUSSION.......................................................... 30 4.1 4.2 Experts Interview ...................................................................................................................... 30 Descriptive analysis ................................................................................................................... 30 Demographic data ............................................................................................................. 30

4.2.1

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4.2.1 4.3 4.3.1 4.3.2 4.3.1 4.3.2 4.4 5. 5.1 5.2

Variables and Constructs data ......................................................................................... 31 Reliability tests ................................................................................................................... 38 Internal correlation analysis ............................................................................................. 40 Variable correlation analysis ............................................................................................ 43 Moderating variables......................................................................................................... 44

Inferential analysis ..................................................................................................................... 38

Discussion and findings ........................................................................................................... 44 Recommendations ..................................................................................................................... 47 Future work ................................................................................................................................ 48

CHAPTER 5: CONCLUSION, RECOMMENDATION AND FUTURE WORK ..................................... 47

REFERENCES ............................................................................................................................................... 49 APPENDIX A: SMES PROFILES.................................................................................................................. 53 APPENDIX B: EXPERTS SEMI- STRUCTURED QUESTIONNAIRE ............................................................ 54 APPENDIX C: CONSOLIDATED EXPERTS INTERVIEW RESPONSE ......................................................... 57 APPENDIX D: THE QUESTIONAIRE.......................................................................................................... 61 APPENDIX E: OPERAIONALIZATION OF MODEL CONSTRUCTS: .......................................................... 65 APPENDIX F: MAPPING OF SPSS VARIABLES TO HYPOTHESIS, CONSTRUCTS, AND QUESTIONNAIRE
QUESTIONS .................................................................................................................................................. 67

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LIST OF TABLES
Table 2.1 - Worldwide MVNO examples................................................................................................. 7 Table 2.2 - Technology acceptance sample researches........................................................................... 9 Table 2.3 UTAUT variables & constructs definitions ...................................................................... 13 Table 3.1 - Questionnaire mapping of Hypotheses-Constructs-Questions ...................................... 27 Table 4.1 - Descriptive Statistics for Services Construct ................................................................. 31 Table 4.2 - Descriptive Statistics for Services construct .................................................................. 32 Table 4.3 - Descriptive Statistics for Perceived usefulness construct ............................................ 32 Table 4.4 - Descriptive Statistics for Offers construct ..................................................................... 33 Table 4.5 - Descriptive Statistics for Complexity construct ............................................................ 34 Table 4.6 - Descriptive Statistics for Network specifics construct ................................................. 35 Table 4.7 - Descriptive Statistics for Social Influence construct .................................................... 35 Table 4.8 - Used mobile operators .......................................................................................................... 37 Table 4.9 - Reliability reference................................................................................................................ 38 Table 4.10 - Reliability measurements..................................................................................................... 39 Table 4.11 - Correlations of Performance Expectancy items.............................................................. 40 Table 4.12 - Correlations of Effort Expectancy items ......................................................................... 42 Table 4.13 - Correlations of Social Influence items .............................................................................. 42 Table 4.14 - Variable Correlarion - Spearman Rho............................................................................... 43 Table 4.15 - Hypothesis finding ............................................................................................................... 44 Table F.1 - Mapping of SPSS variable to questionnaire items ............................................................ 67

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LIST OF FIGURES
Figure 1.1 - Proposed thesis model ........................................................................................................... 2 Figure 2.1 - TRA (Fishbein, 1975).......................................................................................................... 10 Figure 2.2 - TPB (Ajzen, 1991) ................................................................................................................ 11 Figure 2.3 - TAM (Davis, 1989) ............................................................................................................... 12 Figure 2.4 - UTAUT (Venkatesh et al., 2003)........................................................................................ 13 Figure 2.5 - Mallat Use Intention model (Mallat et al., 2008).............................................................. 16 Figure 3.1 - Proposed thesis model ......................................................................................................... 21 Figure 4.1 - Descriptive Statistics for Gender ................................................................................... 31 Figure 4.2 - Descriptive Statistics for Age .............................................................................................. 31 Figure 4.3 - Descriptive Statistics for Job fit construct .................................................................... 33 Figure 4.4 - Descriptive Statistics for PEOU construct ................................................................... 34 Figure 4.5 - Descriptive Statistics for Social factor construct ......................................................... 36 Figure 4.6 - Descriptive Statistics for Trust construct...................................................................... 36 Figure 4.7 - Descriptive Statistics for Cost construct ....................................................................... 37 Figure 4.8 - Use Intention......................................................................................................................... 38

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LIST OF ABBREVIATIONS
ARPU FMCG HLR ITU MCIT MOTC MSC MVNE MVNO NTIA PEOU PU VAS VOIP SME TPB TRA UTAUT Average Revenue Per User Fast Moving Consumer Goods Home Location Register International Telecommunications Union Ministry of Communications and Information Technology, Egypt Ministry Of Transportation and Communications Mobile Switching Center Mobile Virtual Network Enabler Mobile Virtual Network Operator National Telecommunication and Information Administration Perceived Ease of Use Perceived Usefulness Value-Added Service Voice Over Internet Protocol Subject Matter Expert Theory of Planned Behavior Theory of Reasoned Action Unified Theory of Acceptance and Use of Technology

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1. CHAPTER 1: INTRODUCTION
1.1 AN OVERVIEW
Mobile Virtual Network Operators (MVNO) is a new business model that enables brand owners -who have neither telecom experience nor huge investments- to provide mobile services under their own brand by using the already established mobile operators network infrastructure in the backend, this model allows such brand owners to utilize their brand power for marketing mobile services without the need to invest time and funds to build sophisticated telecom networks. MVNOs have been in operation over the last decade in Europe, Australia, USA and some Asian countries, in the past four years two Arab countries have experienced the MVNO, there have been a specific set of conditions in all the countries were MVNOs have succeeded, such conditions are available in Egypt, thus it is probable that MVNO business will be established soon in Egypt, in such case will Egyptian customers accept such model? This is the question behind this thesis.

1.2 PROBLEM DEFINITION


Egypt is nominated from industry prospective to have new mobile virtual network operators, but it not confirmed if there would be customer intention to use them in case they are launched, thus it is necessary to check if that intention exists prior to establishing such business in Egypt.

1.3 RESEARCH OBJECTIVE


The objective of this research is to check if the mobile customers in Egypt will accept Mobile Virtual Network Operators in case they operate in Egypt. Knowledge about the user intention will be helpful to business firms to decide if to go in to such business or not, and if yes, to determine the measures to be taken to satisfy their customers needs.

1.4 THEORETICAL FRAMEWORK


The proposed model in this thesis is based on the UTAUT model (Venkatesh, 2003) that was complemented with some components from another technology acceptance model (Mallat, 2008); proposed model is indicated in Figure 1.1 - Proposed thesis model.

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H1

Figure 1.1 - Proposed thesis model

1.4.1 Model variables Dependent variable Intention to use MVNO: it is the customer likelihood of subscribing to MVNO

Independent variables Performance Expectancy: defined as the degree to which an individual believes that using the system will help him or her to attain gains in job performance. It consists of five constructs: Perceived Usefulness, Job Fit, Services, Network Specifics, Offers Trust: Defined as The user confidence to surrender their own personal data to a remote party, trusting that such data will not be misused Cost: Defined as the degree to which an individual believes that switching service providers would incur certain cost to him or her (Shin et al, 2008). Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011. 2

Effort Expectancy: is defined as the degree of ease associated with the use of the system Social influence: is defined as the degree to which an individual perceives that important others believe he or she should use the new system.

1.4.2 Research assumptions Assumption 1: There are no regulatory barriers e.g. exclusivity rights for the incumbent Mobile operators Assumption 2: Social and economic factors are assumed constant during the survey Assumption 3: Research is limited to users who already have a prior experience with mobile usage 1.4.3 Research limitations Lim1: Limited to Egypt as applied research Lim2: Research is limited to users who already have a mobile line Lim3: Geographical coverage in Cairo Lim4: The theoretical framework is limited to the variables included in the model.

1.5 RESEARCH QUESTIONS


1.5.1 Major questions MjRQ1: Will the Mobile users in Egypt have intention to use MVNO services? 1.5.2 Minor questions MinRQ1: Does the Performance Expectancy from an MVNO affect the user intention to use an MVNO? MinRQ2: Does the user Trust in MVNO affect the user intention to use an MVNO? MinRQ3: Does the Cost associated with MVNO affects user intention to use MVNO? MinRQ4: Does the mobile user Effort Expectancy affect their intention to use MVNO? MinRQ5: Does the Social influence affect the mobile user intention to use MVNO? MinRQ6: Does the Age influence the relation between Performance Expectancy and the user intention to use an MVNO? MinRQ7: Does the Age influence the relation between Trust and the user intention to use an MVNO? MinRQ8: Does the Age influence the relation between Effort Expectancy and the user intention to use an MVNO?

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MinRQ9: Does the Gender influence the relation between Performance Expectancy and the user intention to use an MVNO? MinRQ10: Does the Gender influence the relation between Trust and the user intention to use an MVNO? MinRQ11: Does the Gender influence the relation between Effort Expectancy and the user intention to use an MVNO?

1.6 RESEARCH METHODOLOGY


1.6.1 Research type Paradigm: quantitative Purpose: exploratory, descriptive Logic: deductive Process: Quantitative Outcome: applied Time horizon: cross-sectional 1.6.2 Sampling I - Subject Matter Experts interviews: Population I Sampling method: Sampling Criteria: Sample Size: II- Questionnaire: Population II (for the questionnaire) Sampling method: Sampling Criteria: Sample Size: Non-Probability Sampling Judgmental Sampling 96 Non-Probability Sampling Judgmental Sampling 9

1.6.3 Data analysis method Experts semi-structured interviews were analyzed to validate and enhance the model being proposed in this thesis. In order to answer the research questions, questionnaire results were analyzed quantitatively, after collecting responses, a descriptive and inferential analysis were made for the results. The

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statistical methods used are non parametric Correlation analysis (Spearman Rank) and hypothesis testing when needed.

1.7 THESIS STRUCTURE


The thesis is delivered in five chapters; Chapter 1 is the introduction providing an overview of the research, problem definition, and research objective. Then, a brief description of the theoretical framework, its components, research major and minor questions. Finally the research type, sampling, and data analysis method used in the research are mentioned. Chapter 2 covers the state of the art, where relevant theories upon which the researcher will base the research is shown, including the whole literature review supporting the further research discussions and analysis; so that the reader will be properly oriented to go further into the research. Chapter 3 is the theoretical framework: it covers the research design, explained briefly in Chapter one, and will be interpreted in depth including all justification needed for the relevant models factors, and the resulting questionnaire and interview questions that will be used to collect data required for the analysis. Chapter 4 includes data collection, data analysis methods, findings, and interpretations. Finally, Chapter 5 provides the final conclusion and the recommendations based on the findings and their interpretations and further research areas to be targeted in the future. Appendices at the end of the documents provide

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2. CHAPTER 2: LITERATURE REVIEW


2.1 INTRODUCTION & INDUSTRY OUTLOOK
2.1.1 MVNO Definition Mobile Virtual Network Operator (MVNO) is a new business model that started to appear in the telecom marker in the past decade. According to the International Telecommunication Unions (ITU) definition, MVNO is an entity that: Offers mobile services to customers; Has it own mobile network code; Issues its own SIM card; Operates its own MSC and HLR (not mandatory, it may leave this to the MNO; Does not have its own radio frequency spectrum. (ITU, ca. 1999)

In other less technical words: The MVNO is a mobile service provider that does not own a licensed Radio spectrum, may not have the full network infrastructure; it rather rents capacity or buys wholesale minutes from an established mobile service provider and markets it under its own brand name independently from the main/original provider (Criceli, L. et al., 2009) There is no strict definition for the borderline for the scope of responsibilities and technical systems split between the MVNO and an MNO, it can vary from a very thin MVNO that handles only marketing and reselling of minutes ( so called airtime), or an MVNO that gets more involved in operational aspects and owns its customer care billing systems and even its ValueAdded Services platforms like messaging services, up to a fully fledged MVNO that runs its own billing and customer care, switching and long distance transmission systems. (Guey Lan Fu, 2007) Some other MVNO hire a third party company called Mobile Virtual Network Enables (MVNE) that owns and operates all the business support systems such as billing and customer care, VAS platforms, and carries all the technical interactions with the MNO and leaves the MVNO free to concentrate and innovate in satisfying their customers demands. Mobile Network operators usually require massive volume manpower and efforts to build and operate their network systems, these efforts and investments are immense to the degree that sometimes an operator focus is more on the network management and business operation side more than on the marketing side, which led in some cases to the emergence of MVNOs that

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complements the MNO marketing weakness, where MVNOs has all the time to manage their customer relations and demands with no concern on network management issues in the background. (Guey Lan Fu, 2007) 2.1.2 Scope of the study This thesis is evaluating the potential user acceptance or intention to adopt MVNO in case such business model is introduced in Egypt; user acceptance is approached from a new technology acceptance prospective The MVNO acceptance in Egypt can be studied from another prospective not covered in this thesis- which is the brand extension aspect. MVNOs will be non telecom brand owners that go probably for the first time- into the telecom business domain, the original brand and its established reputation will naturally affect the new area they are going into. 2.1.3 Significance of the research For a business owner or investor, it would be necessary to check and validate the existence of customer acceptance of that new business model in any target country before launching such business 2.1.4 Mobile Virtual Operators overview worldwide MVNOs have started to operate since 2000 in the US, Europe, Australia and some Asian countries, there have been many brands that went into the MVNO business some of them succeeded and many failed to continue, it can be noticed that only two countries have launched MVNOs in the Arab region since 2005 Examples of these MVNOs are listed in Table 2.1. (Telecom Paper website, 2009)
Table 2.1 - Worldwide MVNO examples

MVNO Virgin mobile

Original brand business Media store

Countries operating in Australia, Bahrain, Canada France, India, Qatar, Singapore, UK, USA

Target segment Youth

ESPN Disney Mobile 7-Eleven

entertainment satellite network entertainment Super market chain

USA USA Canada, Australia, USA

Sports fans Children

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Auchan, Aldi Sainsbury Telecom Tesco Samatel

Super market chain Super market chain Super market chain Super market chain Solely an MVNO

France, Italy Germany UK Ireland, UK Oman

Reference (Telecom Paper website, 2009) 2.1.5 Mobile Virtual Operators strategies MVNOs were expected to be the hanging fruit in the Telecom market, high expectations were marketed by industry specialist and visionaries, especially in markets that have reached a high level maturity and are saturated or over saturated (Shea, 2005; Kelly, 2006) To the contrary of these optimistic expectations, MVNO failure stories have started to unfold here and there, of course the MVNO strategy plays a major role in determining its destiny MVNO strategies differ according to the market environment, the MVNO brand and the company vision. Some MNOs prefer to take the easy way and use a cost leadership strategy in which they buy minutes from the MNO at wholesale rates and resell it to subscribers at a discounted price, they lower their operating and marketing expenses, usually by offering no valueadded services and little or no options, this model usually targets ethnic groups offering them lower rates for calling their home countries, economy of scale is the only way to make profit from this strategy i.e. acquisition of significant market share which is not typically easy against the big operators who have much better financial capabilities and can launch aggressive marketing campaigns and sustain temporarily losses even for long period in a price war to close down those small MVNO competitors. Some other MVNOs follow a product differentiation strategy, in which they address a niche market segment thats willing to pay for specially tailored services that no one else has in the market (Kumar et al, 2010), example of these MVNO target specific niches are mentioned in Table 2.1 - Worldwide MVNO examples like Virgin, ESPN, Disney. Some of the MVNOs have positioned themselves to address a specific market segment such as: Prepaid users (price sensitive) Ethnic groups Youth Family (Kids and oldies) Charity Machine to Machine (for remote management like fleet management) 8

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Business practice proved that the product differentiation strategy and brand utilization give better chances to sustain the business compared to cost leadership strategy.

2.2 THEORIES DEFINED


The objective of this thesis is to assess if the mobile users in Egypt will have the intention to use mobile services from MVNOs, considering that MVNO will offer new services and advanced features this literature review will focus on researches and theories related to technology acceptance, user intention and adoption of new technologies. Several theories have been developed to study the acceptance, adoption and diffusion of new technologies; Theory of Reasoned Action (Fishbein and Ajzen, 1975) Theory of Planned Behavior (Ajzen, 1991) Technology Acceptance Model (Davis, 1989) Unified Theory of Acceptance and Use of Technology (Venkatesh et al., 2003) Such theories were deployed to examine the acceptance and adoption for mobile services, examples:
Table 2.2 - Technology acceptance sample researches

Author
Fan et al.

Year 2005

Topic/ Field
Speech interface an enhancer to the Acceptance of mobile Commerce applications Mobile Banking

Applied theories
TAM, and other factors available in the literature

Luaren and Lin Marchewka J. T. et al

2005

TPB, TAM, other factors in the literature


UTAUT

2007

Educational course management software

Mallat et al.

2008

Mobile ticketing

TAM, Diffusion of Innovation ,other factors in the literature TAM, and other factors available in the literature

Sang Hyun Oh et al

2009

Adoption of virtual stores

In the following sections a brief overview will be given about some of the theories relevant to this thesis topic, and will explore why it could be or could not be deployed in this thesis

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2.2.1 Theory of Reasoned Action & Theory of Planned Behavior The Theory of Reason Action (Ajzen, 1975) proposes that persons behavior towards a specific issue depends on three main constructs: 1) Persons behavioral intention, that primarily depends on 2) Persons attitude towards the behavior, and 3) Subjective norms relevant to that specific behavior
Beliefs about consequences of engaging in the behavior Normative belief about what others expect Attitude towards the Behavior

Intention To Use Evaluative aspect of beliefs about consequence Motivation to comply with normative beliefs

Actual Behavior

Subjective Norms

Figure 2.1 - TRA (Fishbein, 1975)

The TRA theory was enhanced later on by its author yielding the Theory of Planned Behavior (Ajzen, 1991), the additional element in the TPB is the perceived behavioral control that affects the intention and affects directly the behavior itself. Either of these theories TRA & TPB measure the intention as an intermediate dependent variable, both theories were used to study/assess the intention for new technology, for example IT usage and mobile commerce. Some studies proved that the TPB is more complete compared to the TRA (Chow and Chan, 2008, Cheng et al., 2006), for example, zer et al (2011, pp.50-58) proved that the TPB is superior to the TRA in measuring accountants intention for IT usage. However, it was found that in some cases there might be a gap between the predicted intention and actual behavior when applying the TRA or TPB, such matter was proven for the topic of predicting knowledge sharing intentions (Kuo and Young, 2008).

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Figure 2.2 - TPB (Ajzen, 1991)

2.2.2 Technology Acceptance Model The Technology Acceptance Model was developed by Davis in 1989 attempting to predict how much the end user accepts a new technology, TAM is one of the famous models dealing with technology acceptance; it is considered an adaptation of the theory of reasoned action. The two main constructs in the TAM are Perceived Usefulness (PU) and Perceived Ease Of Use (PEOU), perceived usefulness represents the degree to which the user feels that using a particular service/system would enhance his/her job performance, while perceived ease of use represents the degree to which the user feels that using a particular service/system would be with minimal effort (Davis, 1989) The TAM has evolved to the TAM2 by adding the subjective Norms as a new variable affecting individuals acceptance of technology, it was proven that subjective norms has a significant effect on the individuals use intention (Venkatesh and Davis, 2000) Considering the amount of new services and features that an MVNO will be offering as indicated in section 2.10, user acceptance for MVNO can be treated as an acceptance of new technology The TAM was used in mobile commerce research area, e.g. physicians acceptance of mobile medical information (Han, 2004) and acceptance of handheld internet devices (Bruner, 2005) Some researchers consider the TAM incomplete, lacking the ability to account for social Influence and unable to explain user intentions as concluded by (Shepers et al, 2007), the technology being considered for testing itself could have a significant moderating effect on the user behavior

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Figure 2.3 - TAM (Davis, 1989)

2.2.3 Unified Theory of Acceptance and Use of Technology The UTAUT (Venkatesh et al., 2003) was an attempt to construct a single model combined from the available technology acceptance models at the time of its development; it considered the conceptual and empirical similarities; and inherited the core constructs and the moderating variables from these models and theories: Theory of reasoned action Theory of planned behavior Technology acceptance model Motivational model Technology acceptance model combined with the theory of planned behavior Model of PC utilization Innovation diffusion theory Social cognitive theory

The UTAUT model proposes three direct determinants of intention to use: Performance expectancy Effort expectancy Social influence

And two direct determinants of usage behavior Behavioral intention Facilitating conditions

And these moderating variables: Experience Voluntariness

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Gender Age

UTAUT model is depicted in Figure 2.4

Figure 2.4 - UTAUT (Venkatesh et al., 2003)

UTAUT constructs are listed in Table 2.3


Table 2.3 UTAUT variables & constructs definitions Construct Performance Expectations Perceived Usefulness Extrinsic Motivation Definition The degree to which a person believes that using a particular system would enhance his or her job performance. The perception that users will want to perform an activity because it is perceived to be instrumental in achieving valued outcomes that are distinct from the activity itself, such as improved job performance, pay, or promotions How the capabilities of a system enhance an individuals job performance. The degree to which using an innovation is perceived as being better than using its precursor. Outcome expectations relate to the consequences of the behavior. The degree to which a person believes that using a system would be free of effort. The degree to which a system is perceived as relatively difficult to

Job-fit Relative Advantage Expectations Effort Expectancy Perceived Ease of Use Complexity

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Ease of Use Social Influence Subjective Norm Social Factors Image Facilitating Conditions Perceived Behavioral Control Facilitating Conditions Compatibility

understand and use. The degree to which using an innovation is perceived as being difficult to use. The persons perception that most people who are important to him think he should or should not perform the behavior in question. The individuals internalization of the reference groups subjective culture, and specific interpersonal agreements that the individual has made with others, in specific social situations The degree to which use of an innovation is perceived to enhance ones image or status in ones social system. Reflects perceptions of internal and external constraints on behavior and encompasses self efficacy, resource facilitating conditions, and technology facilitating conditions. Objective factors in the environment that observers agree make an act easy to do, including the provision of computer support The degree to which an innovation is perceived as being consistent with existing values, needs, and experiences of potential adopters

Effect of moderating variables: According to UTAUT: Age, gender, and experience were found to have effect on the strength of the relationship effort performance expectancy and behavioral intention; age and gender contribution was much significant than experience moderator that was found to be non significant moderator. All moderating variables were found to be non significant in affecting the relationship between social influence and behavioral intention Thus in this research the moderating variables will be limited only to age and gender The UTAUT model does not consider the cost, trust and risk as independent variables affecting intention or usage behavior The UTAUT was developed in an organizational environment, Venkatesh study examined four population groups of individuals that worked in four different organizations; some researchers challenged the concern that UTAUT might not be usable in non organizational contexts such as services and technologies usable by the public (Marchewka J. T. et al, 2007). However, it was verified if UTAUT can be in used non organizational contexts, some reservations were observed when used to explain the acceptance of mobile services: Performance expectancy & effort expectancy are main determinants of the behavioral intention but social influence could not be used as such. It is also important to differentiate between mobile technology and mobile services, what matter really are the services provided by the technology not the technology itself (Carlsson C., 2006) Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011. 14

2.2.4 Is UTAUT suitable and reliable? The UTAUT was used extensively in measurement of usage intention for new technologies; UTUAT was used successfully in studying the adoption of mobile services (Carlsson C., 2006; Marchewka J. T. et al, 2007); it was used specifically in studying MVNO acceptance by (DongHee Shin, 2010) who proved that the model is valid for this research topic in the US market. The UTAUT was proven to be usable across different cultures in North America, East Europe, West Europe, Asia, and Middle East; and it can survive translation and being ported to different languages Arabic, English, French, Malay, Czech, Dutch, and Greek (Oshlyansky L. et al., 2007); thus it would be safe to use the UTAUT model in this research in Egypt The UTAUT has been proven to valid, reliable and suitable for studying technology adoption in many researches (Anderson, J. et al., 2004; Lin, K., 2005; Rosen, P., 2005) 2.2.5 Mallat Use Intention model Another model consolidation attempt was done by Mallat et al. (2008, pp.5765) to build a model based on the constructs of two theories in the information systems adoption literature: TAM and IDT, The result was the following model depicted in Figure 2.5. This model was used to study the adoption of mobile ticketing in public transport in Finland, components of this model are: Compared to UTAUT, this model accommodates few extra variables: Cost, Trust, Risk, Use context and mobility which are relevant to the mobile service context (Mallat et al., 2008). This model have been used to examine the mobile ticketing adoption in Finland Mallat, 2008) and also in an another research in Iran (Babaee N., 2010), in which the prior experience was the most effective factor in the use intention, and afterwards came risk, perceived usefulness, ease of use, trust, use context, and mobility at lower level of importance, then at last came the attitude, social influence, compatibility and cost. Cost Despite the cost is not a common construct in the technology acceptance research area, it was used in few researches in the mobile commerce field (Wu and Wang, 2005; Kim et al., 2004) Actually, it proved to have the least effect on intention to use (Mallat N., 2008; Babaee N., 2010). Cost is defined as the switching cost from other alternative (Shin et al, 2008).

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Figure 2.5 - Mallat Use Intention model (Mallat et al., 2008)

Trust Trust is considered an important determinant in electronic and mobile applications like mobile commerce due to the physical separation between buyer or service user on one side and the seller Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011. 16

or service provider on the other side (Pavlou, 2003; Mallat et al., 2008). Moreover, the user has to surrender personal sensitive information such as his/her home address, phone number(s), and credit card number (Grabner-Krauter and Kaluscha, 2003). Trust in other parties is announced to be a set of persons beliefs or perceptions about the trusted party characteristics that indicate trustees behavior, such beliefs include evaluation of the trusted partys capabilities, benevolence and integrity (Bhattacherjee A., 2002) The following limitations have to be noted regarding this model: Only the direct relationships between the eleven variables and the use intention, while the interdependencies between all the eleven variables were not hypothesized nor tested The whole model was used only in the mobile ticketing field

2.3 PREVIOUS RESEARCH & CASES


Many theories and models were used to study diffusion and acceptance of new brands and/or new technologies in various conditions, in quest for finding a model to answer the question of this research, previous work is reviewed in this chapter. 2.3.1 Mobile Virtual Operators strategy MVNO is one of methods to increase competition in the telecom market and accordingly boost its economy, according to Taiwan Ministry of Telecommunications, every one Dollar invested in the telecommunication field results in an overall multiple effect of 2.89 Dollar increase in the GDP (Taiwan MOTC, 2007) Important factors are recommended to be considered for the success of an MVNO, and actually to telecommunication business in general: Social aspect: more communication facilities available to everyone will help reducing the digital divide, digital divide is the gap that exists between people in different geographical or economical conditions in a having access to national information and resources (US NTIA, 1999) Economic aspect: literacy helps in diversification of value-added services, hence increase their global competitiveness which helps the economy Customer: aspect: The MVNO strategy should focus on satisfying the customer diversified needs via a broad range of products and services (Guey Lan Fu, 2007). Kumar & Sagar (2010) studied the historical experience of different MVNO business models in various countries; one of their conclusions was that: MVNOs are advised to deploy a product differentiation strategy rather than discount or a low price strategy (Kumar, 2010)

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2.3.2 Mobile Virtual Operator services acceptance One research done by Dong-Hee Shin in 2010 focuses on the customer acceptance for services provided by the MVNO, not actually focusing on the technical aspects of these services or the success factors of MVNO but rather on the end user acceptance for MVNO itself. In that research, UTAUT model was applied to measure the use intention and the use behavior in the US market, it is worth mentioning that the MVNO industry is one of the first and biggest MVNO markets in the world (TeleGeography, 2008). As the most relevant research paper to this thesis, it is worth to demonstrate its conclusion, Dong-Hee Shin results show that perceived usefulness and perceived ease of use are the two main variables affecting user intention, and then comes the switching cost in the next level affecting the intention; the results show as well that actual usefulness and actual ease of use are as important as the perceived features (Dong-Hee Shin, 2010) 2.3.3 Gaps in the research As presented so far, many researchers have studies the MVNO from different aspects such as: Competition and relation MVNO & MNO (Criceli, L. et al., 2009; Chyan Yang et al, 2005), MVNO Success factors (Guey Lan Fu, 2007), regulatory rules, entry barriers and marketing strategy recommendation (Kumar, 2010). However, Very few researches were found analyzing the customer acceptance for the MVNO, up to the researchers accessible libraries and databases, one recent research was found that tried to study MVNO business from customer acceptance prospective (Dong-Hee Shin, 2010)

2.4 LOCAL CASE/BUSINESS


2.4.1 Market preconditions In most of the markets where MVNO business has been established and sustained, the following factors were identified: Moderate number of mobile network operators i.e. three to five. Availability of spectrum capacity with MNO leasing out to MVNO. Mature market, i.e. the operators shares are becoming stable, with slow increase High penetration, significant percentage of the countrys population are subscribed to mobile service, the market is so saturated that it is difficult for the MNOs to increase their market share. Potential for reduction in ARPU levels.

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Many untapped customer segments. Appearance of market failure symptoms due to lack of competition and collusion among service providers. First MVNO entrants acquired a decent market share compared to late entrants and copiers. Typically, two or three MVNOs are dominating this segment MVNO are not directly competing with MNO in the same service portfolio, they rather offer services that complement them (Kumar, 2010).

2.4.2 Mobile Virtual Operators in Egypt In Egypt, ethnic MVNO is not feasible marketing strategy due to unavailability of significant ethnic niches that can be exclusively addressed in separate ghettos or communities, in contrast to other immigration countries like Canada or Australia that receives around 250,000 persons yearly from 200 countries (CIC Canada, 2010) However, With reference to the preconditions mentioned in section 2.4.1, Egypt is in a good position to start the MVNO business for the following reasons: Economy of scale, the high population is a potential for high number of subscriber Segmentation, availability of different customer segments and Very high penetration (91%) (MCIT, 2011) Three incumbent mobile operators Advanced regulatory body (currently studying the issue) No MVNOs established yet Good growth rate of GDP

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3. CHAPTER 3: THEORETICAL FRAMEWORK AND RESEARCH DESIGN


3.1 INTRODUCTION
MVNO business model have succeeded in Europe, Australia, USA and some Asian countries, typically in countries of high mobile penetration rate and other specific conditions (refer to section 2.4.1), some Arab countries and specifically Egypt has many of the preconditions to have such business model. Nevertheless, almost none of the Arab countries have an established MVNO business except Oman and Bahrain. MVNOs are sometimes perceived as inferior in quality to the MNOs due to their brand names that are not associated with the telecom industry, actually in most cases MVNOs offer new services or specially designed services to target niche customer segments, while in fact, an MVNO uses the very same radio network infra structure of an MNO Thus it is probable to have customer negative perceptions or even rejection to MVNOs in case they decide to operate in Egypt, accordingly, this thesis will try to explore if the Egyptian customer will have intention to use the MVNO.

3.2 PROBLEM DEFINITION


Egypt telecommunication market is well prepared and qualified from industrial point of view to have new mobile virtual network operators, however it is not confirmed yet if consumers will accepts such new model of mobile operators Thus it is necessary to check if there would mobile users acceptance for MVNO prior to establishing such business in Egypt.

3.3 RESEARCH OBJECTIVE


The objective of this research is to check if the mobile customers in Egypt will accept new Mobile Virtual Network Operators

3.4 THEORETICAL FRAMEWORK


The model used in this thesis is based on the outcome of preliminary interviews done with SMEs The proposed model is based partially on the UTAUT; the whole UTAUT model will not be deployed, only to the behavioral intention to use will be measured while the use behavior will not be measured since there is no MVNO in the market yet. In addition to UTAUT constructs,

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the model was enriched by variables from Mallat model that has been supported by the SME recommendations. The proposed model for this Thesis is depicted in figure Figure 3.1 - Proposed thesis model:

H1

Figure 3.1 - Proposed thesis model

3.4.1 Dependent variables VAR (Y): User Intention Intention to use MVNO is defined as the customer likelihood of using MVNO 3.4.2 Independent variables VAR (X1): Performance Expectancy The degree to which an individual believes that using the system will help him or her to attain gains in job performance (Venkatesh 2003), it contains these five constructs: Perceived Usefulness

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Defined as: The degree to which a person believes that using a particular system would enhance his or her live. (Venkatesh 2003)
Job Fit

Defined as: How the capabilities of a system enhance an individuals job performance. (Venkatesh 2003) Services The MVNO provides innovative services that meet the mobile users needs Network Specifics This construct relates to the network related attributes of the MVNO Offers This construct relates to the commercial offers provided by the MVNO VAR (X2): Trust Defined as: The user confidence to surrender their own personal data to a remote party, trusting that such data will not be misused VAR (X3): Cost Defined as: The degree to which an individual believes that switching service providers would incur certain cost to him or her (Shin et al, 2008). VAR (X4): Effort Expectancy Defined as the degree of ease associated with the use of the system (Venkatesh 2003), it consists of two constructs Perceived Ease of Use Defined as: The degree to which a person believes that using a system would be free of effort. (Venkatesh 2003) Complexity Defined as: The degree to which a system is perceived as relatively difficult to understand and use. (Venkatesh 2003) VAR (X5): Social influence The degree to which an individual perceives that important others believe he or she should use the new system. (Venkatesh 2003) Social Factors Defined as: The individuals internalization of the reference groups subjective culture, and specific interpersonal agreements that the individual has made with others, in specific social situations. (Venkatesh 2003) Image

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Defined as: The degree to which use of an innovation is perceived to enhance ones image or status in ones social system. (Venkatesh 2003) 3.4.3 Moderating variables VAR (M1): Age VAR (M2): Gender 3.4.4 Research assumptions Assumption 1: There are no regulatory barriers e.g. exclusivity rights for the incumbent Mobile operators Assumption 2: Social and economic factors are assumed constant during the survey Assumption 3: Research is limited to users who already have a prior experience with mobile usage 3.4.5 Research limitations Lim1: Limited to Egypt as applied research Lim2: Research is limited to users who already have a mobile line Lim3: Geographical coverage in Cairo Lim4: The theoretical framework is limited to the variables included in the model.

3.5 RESEARCH QUESTIONS


3.5.1 Major questions MjRQ1: Will the Mobile users in Egypt have intention to use MVNO services? 3.5.2 Minor questions MinRQ1: Does the Performance Expectancy from an MVNO affect the user intention to use an MVNO? MinRQ2: Does the user Trust in MVNO affect the user intention to use an MVNO? MinRQ3: Does the Cost associated with MVNO affects user intention to use an MVNO? MinRQ4: Does the mobile user Effort Expectancy affect their intention to use an MVNO? MinRQ5: Does the Social influence affect the mobile user intention to use an MVNO? MinRQ6: Does the Age influence the relation between Performance Expectancy and the user intention to use an MVNO? MinRQ7: Does the Age influence the relation between Trust and the user intention to use an MVNO? Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011. 23

MinRQ8: Does the Age influence the relation between Effort Expectancy and the user intention to use an MVNO? MinRQ9: Does the Gender influence the relation between Performance Expectancy and the user intention to use an MVNO? MinRQ10: Does the Gender influence the relation between Trust and the user intention to use an MVNO? MinRQ11: Does the Gender influence the relation between Effort Expectancy and the user intention to use an MVNO? 3.5.3 Hypothesis H1o: There is no relationship between the user Performance expectancy from the MVNO and the user intention to use its service H1a: There is a positive relationship between the user Performance expectancy from the MVNO and the user intention to use its service H2o: There is no relationship between the user Trust in the MVNO and the user intention to use its service H2a: There is a positive relationship between the user Trust in the MVNO and the user intention to use its service H3o: There is no relationship between the Cost associated with switching to MVNO and the user intention to use its service H3a: There is a negative relationship between the Cost associated with switching to MVNO and the user intention to use its service H4o: There is no relationship between the Effort Expected by the mobile user and the user intention to use its service H4a: There is a positive relationship between the Effort Expected by the mobile user and the user intention to use its service H5o: There is no relationship between the Social Influence on the use of MVNO and the user intention to use its service H5a: There is a positive relationship between the Social Influence on the use of MVNO and the user intention to use its service

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H6o: The Age has no influence on the relation between Performance Expectancy and the user intention to use an MVNO H6a: The Age does influence on the relation between Performance Expectancy and the user intention to use an MVNO H7o: The Age has no influence on the relation between Trust and the user intention to use an MVNO H7a: The Age does influence on the relation between Trust and the user intention to use an MVNO H8o: The Age has no influence on the relation between Effort Expectancy and the user intention to use an MVNO H8a: The Age does influence on the relation between Effort Expectancy and the user intention to use an MVNO H9o: The Gender has no influence on the relation between Performance Expectancy and the user intention to use an MVNO H9a: The Gender does influence on the relation between Performance Expectancy and the user intention to use an MVNO H10o: The Gender has no influence on the relation between Trust and the user intention to use an MVNO H10a: The Gender does influence on the relation between Trust and the user intention to use an MVNO H11o: The Gender has no influence on the relation between Effort Expectancy and the user intention to use an MVNO H11a: The Gender does influence on the relation between Effort Expectancy and the user intention to use an MVNO

3.6 RESEARCH METHODOLOGY


3.6.1 Research type The thesis paradigm is quantitative, for an exploratory, descriptive purpose.

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The logic of this thesis is deductive, as the proposed model was built using established theories i.e. UTAUT and factors from Mallat The used process is Quantitative and the outcome is applied, the findings is a set of recommendations for telecommunication business entities and investors Time horizon of this thesis is a cross-sectional study 3.6.2 Data collection instrument and source I - Experts interviews: Interviews were conducted with Subject Matter Experts (SME) to investigate the following issues: Check that Egypt is a good candidate for MVNO business since such business model is not present in Egypt yet. Check that the UTAUT model components are suitable for the Egyptian environment, Mobile market and the MVNO topic Explore if any additional variables or items need to be considered in the study for MVNO acceptance in the market. Collect the items corresponding to constructs that might influence the customer intention to use an MVNO The SME interview questionnaire is detailed in Appendix B: Experts Semi- Structured questionnaire. II- Questionnaire: A self administered questionnaire was used in this thesis; the questionnaire was launched and administered on the Internet to The respondents were targeted through e-mail chains to friends, relatives and co-workers and social networks A first pilot questionnaire was sent to 5 persons; individual comments were collected from them via e-mails or phone calls regarding unclear questions or typing corrections, enhancements were incorporated in version 2 which was sent to 12 persons in a second round of questionnaire testing, again feedback was used to enhance it, and it was launched in its final form on the internet, invitations were sent first to a group of 70 persons, the responses were monitored for a week to observe any abnormalities, when seemed to be fine, the invitation was extended to another 260 persons, in a week time frame, a reminder was sent to respondents in which they were asked to respond if not done yet, and to forward the questionnaire to their friends and families.

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Table 3.1 indicates the mapping allocation of questionnaire questions to each Hypothesis and construct
Table 3.1 - Questionnaire mapping of Hypotheses-Constructs-Questions Research Question MinRQ1 MinRQ1 MinRQ1 MinRQ4 Hypothesis H1 H1 H1 H4 Model Variables Performance Expectancy Performance Expectancy Performance Expectancy Trust Performance Expectancy Performance Expectancy Services Perceived Usefulness Job fit Perceived Ease of Use Network specific Offers Trust Effort Expectancy Complexity Image Social Influence Cost Behavioural Intention Social factor Cost Construct Questionnaire questions 1-12 13-14 15 16 17-20 21-22 23 24-26 27-28 29 30 31

MinRQ3 MinRQ4 MinRQ4 MinRQ5 MinRQ5 MinRQ3


MjRQ1

H3 H4 H4 H5 H5 H3

3.6.3 Sampling methods I - Subject Matter Experts interviews Population I Sampling method: Sampling Criteria: Sample Size: Non-Probability Sampling Judgmental Sampling 9

The following criterion were used for selecting the SMEs Senior management in the Telecom field Works in Egypt for the past 3 years Aware of the Egyptian market conditions and development His/her job function requires interaction with mobile users demands Interacts with or at least knows and complies to Egyptian telecom regulatory

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The interviews were done by the researcher himself according to planned meetings with the SMEs at their convenience, SME were offered the choice to mention their names or to stay anonymous in the thesis document. The interviews were semi-structured, they were guided by the main constructs of the UTAUT i.e. performance expectancy, effort expectancy, and social influence. Interviews lasted from 30 to 45 minutes, ended with grateful thanks from the researchers II- Questionnaire Population II (for the questionnaire) Sampling method: Sampling Criteria: Sample Size: Non-Probability Sampling Judgmental Sampling 96

The target population for this thesis satisfies the following criterion: Egyptian or foreigner, resident in Cairo, has internet access, own a mobile line, and above 14 years of age. 17.8 Million People are residents in Greater Cairo area (Maps of World, 2010; Wikipedia, 2010). 32.7% of Egypt population is below 14 years old (CIA fact book, 2011), this leaves 67.3% above 14 years old. Mobile penetration in Egypt is 91% (MICT, 2011), Actually the real mobile penetration might be a bit less than 91% due to the multi SIM phenomena whereby some persons owns more than one SIM card (mobile line) from different operators which leads to some inflation in the penetration rates, this penetration ratio will be adjusted by -10% which is the minimum over inflation in the middle east mobile markets, so it will be assumed as 81%. Nationality: Egyptian or resident foreigner Has Internet access, Internet penetration is around 29% in Cairo (MICT, 2011), Population = 17.8 * 0.81 * 0.67 * 0.29 = 2.8 Million Confidence level = 95% Confidence internal = 10% The above parameters will require a sample size equal to 96. Note: Internet access was assumed because the questionnaire will distributed via the Internet 3.6.4 Data analysis methods I - Subject Matter Experts interviews The questionnaire was administered in a face to face interview with the SMEs separately, respondents feedback was summarized. Answers for the structured questions (Yes or No) were Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011. 28

considered according the majority response i.e. answer was obtained more than 4 times. Answers for the open ended questions were summarized, only the items that were mentioned by at least half of the sample were listed in the summary. II - Questionnaire The software to be used for data analysis is SPSS V15, applying descriptive and inferential analysis techniques, questions in the questionnaire are using a 5-point Likert-scale (1 = strongly agree, 5 = strongly disagree) is used (Parasuraman, 1991), Descriptive Analysis Cronbachs alpha will be used for reliability tests within each variable Also, some descriptive techniques will be used such as frequency tables, histograms and ranking tables for mean values to describe the responses collected and the meaning of such Inferential Analysis Non-parametric tests will be used to test the model hypothesis and answer the research questions, such as Spearman rank association, hypothesis testing, based on the type of variables used in the questionnaire (ordinal variables). Spearman rank association was used to judge whether each variable constructs are correlated. Hypothesis testing will be used for variables that contains only one item

The probability (sig.) will be compared to a 5% significance level.


Table 3.1: Data Requirement Table Variable Type INDEP X1 INDEP X2 INDEP X3 INDEP X4 INDEP X5 Variables Hypothesis Source H1 H2 H3 H4 H5 Primary Primary Primary Primary Primary Type Quantitative Quantitative Quantitative Quantitative Quantitative Scale Ordinal Ordinal Ordinal Ordinal Ordinal

Performance Expectancy
Trust Cost

Effort Expectancy Social influence

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4. CHAPTER 4: DATA ANALYSIS, FINDING AND DISCUSSION


The first phase of data analysis was preliminary investigations to verify or enrich the proposed model via semi-structured interview with subject matter experts In the second phase the questionnaire was done to measure the customers intention to use MVNO. The survey was launched through the Internet with invitations via e-mails and social networking channels starting from March 14th 2011 till April 4th 2011; the collected feedback was from 197 respondents; only three responses had invalid response.

4.1 EXPERTS INTERVIEW


SMEs defined the items to be measured under each construct of the UTAUT model, and recommended that constructs: Extrinsic Motivation and Outcome Expectations are not relevant to the thesis topic or the Egyptian market, and advised to replace the Relative Advantage construct by three constructs: Services, Network specifics, Offers and proposed two new variables: Cost and Trust. For detailed expert interview feedback, refer to Appendix C: consolidated Experts interview response Appendix C: consolidated Experts interview response

4.2 DESCRIPTIVE ANALYSIS


4.2.1 Demographic data More males (169) than females (25) have participated in the study (see Figure 4.1) Ages are ranged along four groups: none of the respondents was below 20, 104 respondents belong to (20 to 35) group, 88 belong to (35 to 50) group and only 2 belong to (above 50) group (see Figure 4.2).

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Figure 4.1 - Descriptive Statistics for Gender

Figure 4.2 - Descriptive Statistics for Age

4.2.1 Variables and Constructs data The Performance Expectancy variable: 1) The Service construct:

Table 4.1 - Descriptive Statistics for Services Construct

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Table 4.2 - Descriptive Statistics for Services construct Traffic information service Cheap voice calls over the Internet Broadband (Internet & Data) Bills payment Family offers Customer care Advertisement SMS blocking Roaming services Mobile Handsets Personal assistance service Personalized information service Events service Valid N (listwise) Mean 1.70 1.72 1.78 1.81 1.86 1.93 1.98 2.01 2.19 2.22 2.24 2.36

According to Table 4.1, the items that scored higher than in the Services construct are (in descending order): Traffic information service that tells me about crowded or closed roads Cheap voice calls over the Internet (like Skype) Broadband (Internet & Data) Payment for bills from my mobile, example: Electricity, Water bills Family offers (one package for all family lines with free family calls Customer care solves my problems quickly with no hassle Protection against unwanted advertisement SMS 2) The Perceived Usefulness construct:
Table 4.3 - Descriptive Statistics for Perceived usefulness construct I think that the MVNO services can be useful I believe that the MVNO services are useful enough to make me willing to subscribe to them Mean 1.98 2.30

According to Table 4.3 the mean of answers provided by the respondents; the majority of the respondents believe that the MVNO services are useful but not necessary useful enough to make them willing to subscribe to the MVNO services. 3) The Job Fit construct:

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Figure 4.3 - Descriptive Statistics for Job fit construct

According to frequency chart in Figure 4.3; the majority of the respondents believe that the MVNO services will fit/meet their lifestyle requirements so that they will be willing to use it. 4) The Offers construct:
Table 4.4 - Descriptive Statistics for Offers construct MVNO Offers me to gain points on its loyalty card every time I refill my mobile MVNO gives bundled offers on their original brand products Mean 1.79 1.92

According to Table 4.4 the respondents; both types of offers affect the respondents intention to use the MVNO services. But the offer to gain points on the respondents loyalty card has a higher effect than that of the bundled offers on their original brand products.

The Effort Expectancy variable: 1) The Perceived Ease of USE construct:

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Figure 4.4 - Descriptive Statistics for PEOU construct

According to Figure 4.4, the respondents answers to whether or not they would use MVNO new services even if they seem more difficult to use compared to traditional mobile services are scattered. This indicates that this factor doesnt determine the respondents intention to use the MVNO services alone if it actually affects the respondents intentions. 2) The Complexity construct:
Table 4.5 - Descriptive Statistics for Complexity construct I would use MVNO if I can Subscribe or unsubscribe from MVNO services and offers in simple and easy steps I would move my subscription to an MVNO if I can keep my current mobile number unchanged I would use MVNO if it Offers self-service channels like Web self service Mean 1.92 1.97 2.12

According to Table 4.5; the ease of subscribing/unsubscribing from the MVNO services and offers and the possibility of keeping their current mobile number unchanged are the factors that affect the respondents intention to use the MVNO services the most (within this construct). 3) The Network specifics construct:

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Table 4.6 - Descriptive Statistics for Network specifics construct Mean Statistic 1.55 1.63 1.82 2.28

Network coverage High quality voice Call continuity (call never drops) Name of MNO behind the MVNO Valid N (listwise)

According to Table 4.6 - Descriptive Statistics for Network specifics construct Respondents agree more to these three items: Network coverage, Voice call quality and call continuity rather than actual mobile operator that provides the network It is interesting to note that for the item V22: I dont care about which network is behind the MVNO, the mean was very close to the score 3 (Neutral), this means that users will not really care which mobile operator is in the backend behind the MVNO brand

The Social Influence variable: 1) The Image construct:

Table 4.7 - Descriptive Statistics for Social Influence construct I would use MVNO if it seems to be an exclusive / VIP brand I would use MVNO if it seems to be an ordinary brand Mean 2.53 3.02

According Table 4.7; the image doesnt play that much of a role in affecting the respondents intention to use the MVNO services. This is clear from the mean of the answers which exceeds 2 in both cases indicating that the majority of the respondents didnt agree that they would use the MVNO services due to its image whether it was exclusive or ordinary. 2) The Social Factor construct:

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Figure 4.5 - Descriptive Statistics for Social factor construct

According to the frequency chart in Figure 4.5; the social factor (i.e. I would choose the MVNO that my friends use) has no effect on the respondents intention to use the MVNO services. The Trust variable:

Figure 4.6 - Descriptive Statistics for Trust construct

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According to Figure 4.6, the majority of the respondents dont accept for the MVNO to share/distribute their personal data to other parties. The Cost variable: According to Figure 4.7, the majority of the respondents agree that the low cost of changing from another network and join MVNO plays an important role in their intention to use the MVNO services.

Figure 4.7 - Descriptive Statistics for Cost construct

The network Im using now is According to Error! Not a valid bookmark self-reference., The 194 respondents responded that they have 242 mobile lines i.e. the mobile penetration is inflated due to the multi SIM phenomena mentioned in section 3.6.3, the inflation ratio is (242-194)/194= 24.7%, this confirms that the 10% correction taken in the sample size calculation was safe.
Table 4.8 - Used mobile operators Operator name Mobinil Vodafone Etisalat Total Count 131 79 32 242

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User intention: According to figure Error! Reference source not found., majority of users show intention to use MVNO service

Figure 4.8 - Use Intention

4.3 INFERENTIAL ANALYSIS


The following was assumed while doing the analysis: If r (correlation Coefficient) is 0.1 to 0.3 OR -0.1 to -0.3 then r = small correlation. If r (correlation Coefficient) is 0.3 to 0.5 OR -0.3 to -0.5, then r = moderate correlation. If r (correlation Coefficient) is 0.5 and above OR -0.5 and below then r = strong correlation. The used significant value () is assumed to be 0.05 4.3.1 Reliability tests Reliability tests were run on the level of the main variables (each main variable consists of several questions belonging to different constructs) and on the overall data. The total number of variables is 5 but the reliability test was run for only 3 variables since each of the remaining 2 variables consists of only one item According to Hinton proposed four cut-off points for reliability, the following bands for reliability were considered (Hinton et al., 2004).
Table 4.9 - Reliability reference Cronbach's Alpha value Above 0.9 0.9 > 0.7 Reliability Excellent reliability High reliability

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0.7 > 0.5 Below 0.5

Moderate reliability Low reliability

The results of the reliability analysis are as follows:


Table 4.10 - Reliability measurements Variable Number X1 X2 X3 X1, X2, X3, X4, X5 Variable name Performance Expectancy Effort Expectancy Social Influence Overall reliability Number of items 21 4 3 30 Cronbach's Alpha 0.892 0.613 0.766 0.904 Reliability High reliability Moderate reliability High reliability Excellent reliability

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4.3.2 Internal correlation analysis In order to determine which items within each variable that actually has the effect on the people intention to use MVNO, a correlation analysis was done between all the items within each variable, this was done for each variable that includes more than one item. The correlation coefficient used is Spearmans Rho. Using the correlation matrix it would be possible to filter out the factors that dont affect the peoples intention to use. The factors with insignificant correlation coefficient with most of the other factors within the same variable were judged to be unimportant/insignificant to the persons decision to use the MVNO services. Note: Mapping of SPSS variable names to model constructs and questionnaire questions is indicated in Appendix F: Mapping of SPSS variables to hypothesis, constructs, and questionnaire questions. The results for the correlation analysis were as follows: The X1 Performance Expectancy variable:

This variable consists of 21 different items categorized under 5 different constructs:


Table 4.11 - Correlations of Performance Expectancy items
V1 1.000 . ** .200 .005 ** .302 .000 ** .225 .002 * .169 .018 ** .256 .000 V2 ** .200 .005 1.000 . ** .318 .000 ** .229 .001 ** .220 .002 ** .258 .000 V3 ** .302 .000 ** .318 .000 1.000 . ** .466 .000 ** .238 .001 ** .212 .003 V4 ** .225 .002 ** .229 .001 ** .466 .000 1.000 . ** .503 .000 ** .286 .000 V5 * .169 .018 ** .220 .002 ** .238 .001 ** .503 .000 1.000 . ** .422 .000 V6 ** .256 .000 ** .258 .000 ** .212 .003 ** .286 .000 ** .422 .000 1.000 . V7 ** .265 .000 ** .214 .003 ** .292 .000 ** .363 .000 ** .291 .000 ** .308 .000 V8 ** .266 .000 ** .355 .000 ** .227 .001 ** .308 .000 ** .373 .000 ** .292 .000 V9 * .169 .018 ** .210 .003 ** .282 .000 ** .278 .000 ** .212 .003 .129 .072 V10 ** .251 .000 ** .284 .000 .071 .324 ** .232 .001 ** .242 .001 ** .222 .002 V11 ** .185 .010 ** .512 .000 ** .199 .005 .132 .067 ** .280 .000 ** .348 .000 V12 * .161 .025 ** .396 .000 ** .270 .000 ** .253 .000 ** .285 .000 ** .375 .000 V14 ** .418 .000 ** .396 .000 ** .350 .000 ** .390 .000 ** .388 .000 ** .312 .000 V15 ** .454 .000 ** .384 .000 ** .291 .000 ** .429 .000 ** .362 .000 ** .384 .000 X1 Job fit ** .295 .000 ** .390 .000 ** .238 .001 ** .401 .000 ** .309 .000 ** .440 .000 V19 ** .229 .001 ** .225 .002 ** .204 .004 ** .226 .002 ** .337 .000 ** .239 .001 V20 ** .200 .005 ** .250 .000 ** .204 .004 ** .200 .005 ** .261 .000 ** .258 .000 V21 ** .314 .000 ** .257 .000 * .159 .027 ** .224 .002 * .181 .012 ** .187 .009 V22 .124 .086 .132 .067 ** .281 .000 ** .234 .001 .070 .333 ** .238 .001 V24 ** .312 .000 ** .238 .001 ** .379 .000 ** .229 .001 * .157 .028 ** .214 .003 V25 ** .253 .000 ** .299 .000 ** .276 .000 ** .219 .002 ** .225 .002 ** .326 .000

V1 V2 V3 V4 V5 V6

Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed)

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V7 V8 V9 V10 V11 V12 V14 V15

X1 Job fit V19 Corr. Coef. Sig. (2-tailed) V20 Corr. Coef. Sig. (2-tailed) V21 Corr. Coef. Sig. (2-tailed) V22 Corr. Coef. Sig. (2-tailed) V24 Corr. Coef. Sig. (2-tailed) V25 Corr. Coef. Sig. (2-tailed)

Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed) Corr. Coef. Sig. (2-tailed)

.265 .000 ** .266 .000 * .169 .018 ** .251 .000 ** .185 .010 * .161 .025 ** .418 .000 ** .454 .000 ** .295 .000 .229 .001 ** .200 .005 ** .314 .000 .124 .086 ** .312 .000 ** .253 .000
**

**

.214 .003 ** .355 .000 ** .210 .003 ** .284 .000 ** .512 .000 ** .396 .000 ** .396 .000 ** .384 .000 ** .390 .000 .225 .002 ** .250 .000 ** .257 .000 .132 .067 ** .238 .001 ** .299 .000
**

**

.292 .000 ** .227 .001 ** .282 .000 .071 .324 ** .199 .005 ** .270 .000 ** .350 .000 ** .291 .000 ** .238 .001 .204 .004 ** .204 .004 * .159 .027 ** .281 .000 ** .379 .000 ** .276 .000
**

**

.363 .000 ** .308 .000 ** .278 .000 ** .232 .001 .132 .067 ** .253 .000 ** .390 .000 ** .429 .000 ** .401 .000 .226 .002 ** .200 .005 ** .224 .002 ** .234 .001 ** .229 .001 ** .219 .002
**

**

.291 .000 ** .373 .000 ** .212 .003 ** .242 .001 ** .280 .000 ** .285 .000 ** .388 .000 ** .362 .000 ** .309 .000 .337 .000 ** .261 .000 * .181 .012 .070 .333 * .157 .028 ** .225 .002
**

**

.308 .000 ** .292 .000 .129 .072 ** .222 .002 ** .348 .000 ** .375 .000 ** .312 .000 ** .384 .000 ** .440 .000 .239 .001 ** .258 .000 ** .187 .009 ** .238 .001 ** .214 .003 ** .326 .000
**

**

1.000 . ** .566 .000 ** .231 .001 ** .282 .000 ** .247 .001 ** .250 .000 ** .301 .000 ** .271 .000 ** .377 .000 .376 .000 ** .387 .000 ** .300 .000 .140 .051 * .167 .020 ** .289 .000
**

.566 .000 1.000 . ** .220 .002 ** .446 .000 ** .257 .000 ** .374 .000 ** .439 .000 ** .362 .000 ** .379 .000 .322 .000 ** .351 .000 ** .290 .000 * .163 .023 ** .244 .001 ** .336 .000
**

**

.231 .001 ** .220 .002 1.000 . ** .203 .004 * .167 .020 ** .312 .000 ** .267 .000 ** .249 .000 ** .276 .000 .114 .112 .084 .243 .036 .615 ** .200 .005 ** .259 .000 ** .188 .009

**

.282 .000 ** .446 .000 ** .203 .004 1.000 . ** .390 .000 ** .347 .000 ** .307 .000 ** .268 .000 ** .368 .000 .399 .000 ** .330 .000 ** .356 .000 ** .300 .000 ** .212 .003 ** .286 .000
**

**

.247 .001 ** .257 .000 * .167 .020 ** .390 .000 1.000 . ** .514 .000 ** .189 .008 ** .197 .006 ** .324 .000 .221 .002 ** .241 .001 * .184 .010 ** .264 .000 * .148 .040 ** .203 .005
**

**

.250 .000 ** .374 .000 ** .312 .000 ** .347 .000 ** .514 .000 1.000 . ** .286 .000 ** .261 .000 ** .372 .000 .182 .011 * .184 .010 * .143 .046 ** .212 .003 ** .299 .000 ** .301 .000
*

**

.301 .000 ** .439 .000 ** .267 .000 ** .307 .000 ** .189 .008 ** .286 .000 1.000 . ** .706 .000 ** .644 .000 .286 .000 ** .330 .000 ** .301 .000 ** .218 .002 ** .314 .000 ** .329 .000
**

**

.271 .000 ** .362 .000 ** .249 .000 ** .268 .000 ** .197 .006 ** .261 .000 ** .706 .000 1.000 . ** .749 .000 .307 .000 ** .319 .000 ** .308 .000 ** .212 .003 ** .313 .000 ** .371 .000
**

**

.377 .000 ** .379 .000 ** .276 .000 ** .368 .000 ** .324 .000 ** .372 .000 ** .644 .000 ** .749 .000 1.000 . .369 .000 ** .357 .000 ** .338 .000 ** .310 .000 ** .295 .000 ** .384 .000
**

**

.376 .000 ** .322 .000 .114 .112 ** .399 .000 ** .221 .002 * .182 .011 ** .286 .000 ** .307 .000 ** .369 .000 1.000 . ** .782 .000 ** .639 .000 ** .282 .000 .138 .054 ** .324 .000

**

.387 .000 ** .351 .000 .084 .243 ** .330 .000 ** .241 .001 * .184 .010 ** .330 .000 ** .319 .000 ** .357 .000 .782 .000 1.000 . ** .712 .000 ** .306 .000 .120 .095 ** .247 .001
**

**

.300 .000 ** .290 .000 .036 .615 ** .356 .000 * .184 .010 * .143 .046 ** .301 .000 ** .308 .000 ** .338 .000 .639 .000 ** .712 .000 1.000 . ** .312 .000 .118 .100 ** .301 .000
**

**

.140 .051 * .163 .023 ** .200 .005 ** .300 .000 ** .264 .000 ** .212 .003 ** .218 .002 ** .212 .003 ** .310 .000 .282 .000 ** .306 .000 ** .312 .000 1.000 . ** .208 .004 ** .226 .002
**

.167 .020 ** .244 .001 ** .259 .000 ** .212 .003 * .148 .040 ** .299 .000 ** .314 .000 ** .313 .000 ** .295 .000 .138 .054 .120 .095 .118 .100 ** .208 .004 1.000 . ** .679 .000

.289 .000 ** .336 .000 ** .188 .009 ** .286 .000 ** .203 .005 ** .301 .000 ** .329 .000 ** .371 .000 ** .384 .000 .324 .000 ** .247 .001 ** .301 .000 ** .226 .002 ** .679 .000 1.000 .
**

**

According to the above correlation matrix there are statistically significant correlation relationships between all the items. Therefore; it could be concluded that the 21 items within the variable Performance Expectancy actually have an effect on the respondents intention to use the MVNO services. Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011. 41

The X2 Effort Expectancy variable:

This variable consists of 4 different items categorized under 2 constructs:


Table 4.12 - Correlations of Effort Expectancy items Spearman's rho X4 - PEOU Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N X4 - PEOU 1.000 . 194 .118 .101 194 .137 .058 194 .238** .001 194 V28 .118 .101 194 1.000 . 194 .488** .000 194 .339** .000 194 V29 .137 .058 194 .488** .000 194 1.000 . 194 .378** .000 194 V30 .238** .001 194 .339** .000 194 .378** .000 194 1.000 . 194

V28

V29

V30

According to Table 4.12 - Correlations of Effort Expectancy items, the item X4 - PEOU : Using the MVNO services even if they are more difficult than the regular service has no statistically significant correlation with any of the other 3 items except with the item I would use MVNO if it offers self-service channels like Web self service. On the other hand the other three items has statistically significant correlation relationships between each other Therefore it could be concluded that the variable Effort Expectancy has only 3 items out of 4 that affect the respondents intention to use the MVNO service. The X3 Social Influence variable:

This variable consists of 3 different items categorized under 2 constructs:


Table 4.13 - Correlations of Social Influence items V32 V32 Correlation Coefficient 1.000 Sig. (2-tailed) . N 194 V33 Correlation Coefficient -.009 Sig. (2-tailed) .906 N 194 X5 - Social factor Correlation Coefficient .174 Sig. (2-tailed) .154 N 194 V33 -.009 .906 194 1.000 . 194 .423** .000 194 X5 - Social factor .174 .154 194 .423** .000 194 1.000 . 194

Spearman's rho

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According to the Table 4.13 - Correlations of Social Influence items, the item I would use MVNO if it seems to be an exclusive / VIP brand has no significant correlation with any of the 2 other factors. Therefore it could be concluded that the variable Social Influence has only 2 factors that affect the respondents intention to use the MVNO service. The item V33 I would use MVNO if it seems to be an ordinary brand is highly significant with the social factor construct with a medium correlation. Translating this into business point of view, it can be inferred that an exclusive brand is not a must to succeed, this is good news for ordinary brands like supermarket chains, sport clubs, etc. they should not worry too much about being excluded from the mobile market, majority of users accepts to have an ordinary brand with a confirmed medium correlation with their friends selection of MVNO they use what their friends or close social circle use. This means that social networking should play a role in marketing and increasing the subscriber base of an MVNO. 4.3.1 Variable correlation analysis
Table 4.14 - Variable Correlarion - Spearman Rho
X1 PERF EXP Y - Intention Corr. Coef. Sig. (1-tailed) N .767(**) .000 X2 TRUST .120(*) .048 194 X3 COST -.277(**) .000 194 X4 EFRT EXP .594(**) .000 194 X5 SOCL INF .298(**) .000 194

194 ** Correlation is significant at the 0.01 level (1-tailed). * Correlation is significant at the 0.05 level (1-tailed).

According to Table 4.14 the followings is observed: Performance Expectancy: A statistically significant positive strong correlation is clearly pointed out between independent variable X1: Performance Expectancy and dependent variable Y: Customer Intention: r (194) = 0.767, P<0.05, one tailed. Trust: A statistically significant positive weak correlation between independent variable X2: Trust and dependent variable Y: Customer Intention: r (194) = 0.120, P<0.05, one tailed. Cost: A statistically significant negative weak correlation between independent variable X3: Cost and dependent variable Y: Customer Intention: r (194) = 0.277, P<0.05, one tailed. Effort Expectancy:

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A statistically significant positive strong correlation between independent variable X4: Effort Expectancy and dependent variable Y: Customer Intention: r (194) = 0.594, P<0.05, one tailed. Social Influence: A statistically significant positive weak correlation between independent variable X5: Social Influence and dependent variable Y: Customer Intention: r (194) = 0.298, P<0.05, one tailed.
Table 4.15 - Hypothesis finding Alternative Hypotheses Ha1: There is a positive relationship between the user Performance expectancy from the MVNO and the user intention to use its service Ha2: There is a positive relationship between the user Trust in the MVNO and the user intention to use its service Ha3: There is a negative relationship between the Cost associated with switching to MVNO and the user intention to use its service Ha4: There is a positive relationship between the Effort Expected by the mobile user and the user intention to use its service Ha5: There is a positive relationship between the Social Influence on the use of MVNO and the user intention to use its service Test Name Spearman Test result on the Null Hypothesis Reject Ho

P-value
< 0.05

Spearman Spearman

Reject Ho Reject Ho

< 0.05 < 0.05

Spearman Spearman

Reject Ho Reject Ho

< 0.05 < 0.05

4.3.2 Moderating variables Due to the limitation of communications during the survey time, the number of respondents in both moderating variables (Age & Gender) contained some groups less than the statistical cutoff point i.e. 30 respondent, for detailed figures refer to section 4.2.1 Demographic data. Accordingly, it was not possible to test the effect of moderating variables and validate the hypothesis H6, H7, H8, H9, H10, and H11.

4.4 DISCUSSION AND FINDINGS


According to the above, the following can be summarized: The Performance Expectancy proposed constructs were confirmed, it was also verified that all these constructs affect the customer intention to use MVNO Some of the proposed constructs for Effort Expectancy and Social Influence were verified while few were excluded, it was also verified that all the remained constructs affect the customer intention to use MVNO.

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The analysis proved that all the model independent variables affect the user intention to use MVNO. The factors ranking according to their correlation with the intention is as follows (in descending order: Performance expectancy Effort expectancy Social Influence Cost Trust

In a bit more detailed presentation, the factors that affect the respondents intention to use an MVNO are listed as follows: The Performance Expectancy: Services: (only highest ranking items are listed) Traffic information service that tells me about crowded or closed roads Cheap voice calls over the Internet (like Skype) Broadband (Internet & Data) Payment for bills from my mobile, example: Electricity, Water bills Family offers Customer care solves my problems quickly with no hassle Protection against unwanted advertisement SMS Job fit: MVNO services fits the customer lifestyle requirements Network specific: (only highest ranking items are listed) Voice calls are crystal clear, no noise, and no echo Voice calls never drops Network coverage is excellent inside buildings Offers: MVNO gives bundled offers on their original brand products MVNO Offers me to gain points on its loyalty card every time I refill my mobile Complexity: (only highest ranking items are listed) Mobile number portability (possibility to change the service provider keeping the current mobile number unchanged Simple and easy means to opt in to MVNO services and offers 45

The Effort Expectancy:

Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011.

The Social Influence: Image: MVNO considered as an exclusive brand Social Factor: Customers may use the same operator that their friends use

The Cost: The incurred by the user in order to switch from current mobile service to MVNO. The Trust: The user trust in the MVNO that his/her personal data are not leaked.

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5. CHAPTER 5: CONCLUSION, RECOMMENDATION AND FUTURE WORK


An MNVO planning to establish business in Egypt should carefully consider its strategy and not only concentrate on cost leadership but better follow a differentiation and provide a variety of new services to its subscribers. Despite of the fact that Egypt is a developing country and price is a dominant factor in customer decision but it is not recommended for a new MVNO to use cost leadership strategy, according to recommendations of previous researches, the proper strategy for an MVNO is to differentiate itself from MNOs by offer new and innovative services and to target niche or untapped market segments (Kumar, 2010) The finding of this research confirms the positive relationship between the proposed factors and the user intention to use an MVNO; such factors are: Innovative services: (Traffic information services, Bills payment, VOIP, Family offer packs, advertisement SMS blocking) Network/Voice quality Offers (bundled with its original brand business) Trust (specifically regarding personal data) Switching cost Social influence Complexity (or simplicity) of procedures required to subscribe to MVNO service

5.1 RECOMMENDATIONS
A new MVNO in Egypt is advised to: Provide new and innovative services Provide attractive offers, not necessarily straight price cuts, but more of bundles with its original brand products The network quality parameters of the host operator are important not which operator it is; so it is better to choose a technically high quality network rather than one that has the best brand image. Establish procedures to switch subscription from current mobile operators to MVNO that are quick and simple, Mobile number portability plays a good role in this regards

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Consider social groups while doing marketing as users tend to consider which MVNO that their friends or persons in their close circle are choosing

In some cases a mobile operator might have a good quality network but due to bad customer care or weak marketing they do not have the first brand name in the market, this would be a perfect partner fit between the MNO and MVNO in which the MVNO tries to do perfect marketing to sell service in a high quality network.

5.2 FUTURE WORK


A possible future work is to validate the Age, and Gender as moderating variables for this model in Egypt, in addition to possibly new moderating variables, such study shall consider a larger sample size to be able to statistically verify the outcome. Study the effect of people awareness of innovative mobile services (in case it was provided by classical service providers) the level of adoption of MVNO mobile service, i.e. in case MVNO provides new services that was never provided by established MNO, will it be accepted in the market? Study the effect of social networking on marketing efficiency and growth potential of MVNO Study the MVNO acceptance from the brand extension prospective and the affect of the original brand on the user intention to subscribe to the MVNO Study the customer acceptance for MVNO as brand extension aspect and the effect of the original brand on its new MVNO business Another area that worth being explored is the MVNO effect on the original brand itself, will it strengthen the original brand by being diversified or will it damage the original brand due the competition with big mobile operators that in any case will stay bigger than any MVNO scale This study can be done on a wider geographical scale e.g. whole Egypt Determine the weight of each factor affecting the customer intention to use MVNO.

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[Accessed: December 2010] TeleGeography, 2008. MVNO Report Packages, August 2008. Venkatesh,V., 2003. User Acceptance of Information Technology: Towards a Unified View. MIS Quarterly, 27(3), pp. 425-478 US NTIA, 1999, Falling Through the Net: Defining the Digital Divide. Available at: www.ntia.doc.gov/ntiahome/fttn99/fttn.pdf. [Accessed: 2011, March 17] Venkatesh,V. & Davis,F.D., 2000. A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46(2), pp.186-204 http://portal.acm.org/citation.cfm?id=1109894 [Accessed: February 2011] Wikipedia, 2010. What is the population of Cairo Egypt today? [Online] Available at: http://wiki.answers.com/Q/What_is_the_population_of_Cairo_Egypt_today [Accessed January 2011]. Wu, J. H. & Wang, S.C. 2005. What drives mobile commerce? An empirical evaluation of the revised technology acceptance model. Information and Management, 42, pp.719729.

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APPENDIX A: SMES PROFILES


Hesham Moafi, Regulatory Affairs Officer, Orascom Telecom Holding Ashraf Sahab, Marketing Development Senior Manager, Orascom Telecom Holding Mohammed El-Ammawi, Market Development & Strategy Director, Orascom Telecom Holding Mostafa Khalil, Head of Revenue Management, Etisalat Anonymous, Wholesale Department, Vodafone Sherif Amin, Product and Services Director, Etisalat Ahmed El-Noamani, Network Operation Senior Manager, Orascom Telecom Holding Hesham Kamel, Solution Engineering Senior Manager, Orascom Telecom Holding Amr El-Deeb, Project Senior manager, Orascom Telecom Holding

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APPENDIX B: EXPERTS SEMI- STRUCTURED QUESTIONNAIRE


Hello, Let me first give you a brief introduction about my thesis topic, MVNO (Mobile Virtual Network Operator) is a new market approach in the Mobile business is to have non telecom companies (like: Carrefour hyper market, Hilton hotels, Showtime satellite network, Awlad Ragab supermarket, and RadioShack) selling mobile service using their own brand, this approach is called Mobile Virtual Network Operator (MVNO); This target of my thesis is to measure the consumer acceptance of a future MVNO, if an MVNO is going to open up in Egypt

Part A:
Q1. First, if you are aware about the MVNO business model, please tell me your thoughts about applying such approach in Egypt. Answers:

Part B:
Q3. Ill mention some categories that are proposed by theories to affect the customer intention to use something new like the MVNO; according to your knowledge about the Egyptian market, please mention if they could be valid YES?NO? And mention as well the items that might fit within each category? Answers: Perceived usefulness: YES NO Comments:

Extrinsic Motivation

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YES

NO

Comments:

Job fit: Extrinsic Motivation YES NO Comments:

Outcome Expectations YES NO Comments:

Relative advantage: YES NO Comments:

Complexity YES NO Comments:

Ease of use: YES NO Comments:

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Subjective norm YES NO Comments:

Image YES NO Comments:

Social factors YES NO Comments:

Do you have other items to add that may influence the customer intention to subscribe to MVNO? Comments:

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APPENDIX C: CONSOLIDATED EXPERTS INTERVIEW RESPONSE


Hello, Let me first give you a brief introduction about my thesis topic, MVNO (Mobile Virtual Network Operator) is a new market approach in the Mobile business is to have non telecom companies (like: Carrefour hyper market, Hilton hotels, Showtime satellite network, Awlad Ragab supermarket, and RadioShack) selling mobile service using their own brand, this approach is called Mobile Virtual Network Operator (MVNO); This target of my thesis is to measure the consumer acceptance of a future MVNO, if an MVNO is going to open up in Egypt

Part A:
Q1. First, if you are aware about the MVNO business model, please tell me your thoughts about applying such approach in Egypt. Answers: Yes, definitely, such model is coming to Egypt; it has already worked in neighbor countries like Oman, Qatar and Greece. There might be one blocking point, which is the regulatory approval, but according to officials statements and the industry progress in similar markets: it is expected to be cleared in a matter of a year or two at most Other than this, Egypt has many factors that shall make the MVNO a success.

Part B:
Q3. Ill mention some categories that are proposed by theories to affect the customer intention to use something new like the MVNO; according to your knowledge about the Egyptian market, please mention if they could be valid YES?NO? And mention as well the items that might fit within each category? Answers: Perceived usefulness: YES NO Comments: No comments

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Extrinsic Motivation NO Comments:

Job fit: Extrinsic Motivation YES Comments: Might be suitable to consider whole lifestyle suitability not only work Outcome Expectations NO Comments:

Relative advantage: YES NO Comments: Can be redefined as the following three categories (Services, Network related issues, Offers) New Services High quality, Low cost voice (VOIP, supports Skype) Readymade content suitable for my interests (education and medical . Not ring tones) Indoor coverage (installs boosters) Bundled with other products (IPTV, Google TV)\Must have my number ported Family offers (club effect) Cheap international calls Data enabled Roaming availability Promotion in special seasons Customer care (I want to be pampered) Payment services for bills and so on Customer care, customer care, subscriber wants good customer care 58

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Differentiating services i.e. really innovative services, new Applications, e.g. traffic info service, night spots highlights, social related destinations (Cinema, restaurants), the things that big companies will disregard as they may seem small to them Same discount card or membership card that I can refill my mobile and get discount in the original brand related goods Special deals on international call and roaming Availability of the latest handsets Blocking of annoying advertisement Network related issues: Original network provider does not matter, this would matter in other countries where there is dramatic gap in coverage and performance Subscribers want crystal clear voice, never to have an interrupted call, and to have a good indoor coverage My current Mobile provider should be the same provider to this flanker brand The original network play a role Offers Bundled discount with their original business Targeted discounts to me in their business

Complexity YES Comments: Speed to resolve my problems with no hassle 24 hours Availability of customer care Availability of service channels (Web help, walk-in shops)

Ease of use: YES Comments: Easy to subscribe and unsubscribe in services and offers

Subjective norm NO Comments:

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YES Comments: Must have a high profile image/brand Brand should not be very commonly used, I want to be differentiated from others

Social factors YES NO Comments: Might be important, specially within a family or close circle of friends Must be adopt by many peers specially in my community

Do you have other items to add that may influence the customer intention to subscribe to MVNO? Switching cost: How much will it cost a subscriber to switch from current operator to MNVNO, such cost may include penalty or termination fee to current operator Egypt is a price sensitive market, despite the fact that MVNOs may target specific niches (probably wealthy ones) this point is worth investigation Privacy/security issues: Must feel confident to give away my personal info Be sure that my personal data are safe with that MVNO company Customers may be concerned with giving away their personal data, especially if the MVNO brand does not give the impression that they own the proper technology to secure your data (e.g. a supermarket or a sporting club); you know in Egypt, personal data are very sensitive issues especially for women.

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APPENDIX D: THE QUESTIONAIRE

MVNO acceptance in Egypt


Introduction: A new market approach in the Mobile business is to have non telecom companies (like: Carrefour hyper market, Hilton hotels, Showtime satellite network, Awlad Ragab supermarket, and RadioShack) selling mobile service using their own brand, this approach is called Mobile Virtual Network Operator (MVNO); Such companies are not any of the telecom specialized providers (Mobinil, Vodafone, and Etisalat), examples: Virgin Mobile in Bahrain, MBC Jawwal in Saudi Arabia This survey objective is to measure the consumer acceptance of a future MVNO, if an MVNO is going to open up in Egypt Answer for all the questions is on this scale Strongly Agree Agree Neutral Disagree Strongly Disagree

An MVNO will provide new services like those in in the points from 1 to 12; I believe that this service will encourage me to use the MVNO offers 1. Cheap voice calls over the Internet (like Skype) 2. Provides information material suitable for my interests (education, medical, legal, etc.) , examples: updated medical news SMS sent regularly to your mobile, financial news e-mailed to your mobile, SMS about new laws issued in the country, news about new business opportunities etc. 3. Family offers (one package for all family lines with free family calls) 4. Broadband (Internet & Data) 5. Roaming service in countries outside Egypt 6. Payment for bills from my mobile example: Electricity, Water bills 7. Customer care solves my problems quickly with no hassle 8. Protection against unwanted advertisement SMS 9. Provides latest mobile handsets in its offers 10. Traffic information service that tells me about crowded or closed roads 11. Events service that informs me about a new party at the Opera, workshop in a cultural center.

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12. Personal assistance reserves Cinema tickets for me, schedules my appointments with Doctors, and reminds me about them Considering the services mentioned in the points from 1 to 12 13. I think that the MNO services can be useful 14. I believe that the MVNO service are useful enough to make me willing to subscribe to it 15. I believe that the these MVNO services will fit/meet my lifestyle requirements so that Ill be willing to use it 16. I would use MVNO new services even if they seem more difficult to use compared to traditional mobile services I believe that these network quality factors will encourage me to use the MVNO service 17. Voice calls are crystal clear, with no noise, and no echo 18. Voice calls never drops 19. Network coverage is excellent inside buildings (strong signal inside my home or office) 20. I dont care about which network is behind the MVNO Explanation: Carrefour or RadioShack will have its own SIM cards but will actually use a network like Mobinil or Vodafone

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Please highlight to what extent each of these offers will raise your intention to use the MVNO service I believe that offers like this will raise my intention to use the MVNO services 21. MVNO gives bundled offers on their original brand products (example: Radioshak gives 10% discount on all products if you refill 50 L.E to your Radioshak mobile) 22. MVNO Offers me to gain points on its loyalty card every time I refill my mobile (example: Your shopping card from Carrefour super market will collect points when you refill your Carrefour mobile line) 23. I accept the MVNO to share/distribute my personal data to other parties Example: your number, name or address data is leaked to person(s) you dont know 24. I would move my subscription to an MVNO if I can keep my current mobile number unchanged 25. I would use MVNO if I can Subscribe or unsubscribe from MVNO services in simple and easy steps 26. I would use MVNO if it Offers new self-service channels like Web self service, example: change my call forwarding settings or check my voice mail through the internet 27. Ill be willing to use MVNO if it seems to be a selected/VIP brand 28. Ill be willing to use MVNO if it seems to be an ordinary brand

29. I would choose the MVNO that my friends use 30. I would subscribe to MVNO because there are low fees associated with moving to it (e.g. my current Mobinil contract termination fees) I would change my line to MVNO because there is low cost to change from another network and join MVNO 31. I may consider the idea of using MVNO? Yes - NO

Demographics: 1. Education level: High school - University graduate - Master degree or above

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2. Profession Employee Or Female - 21 to 35 Vodafone - 35 to 50 Etisalat - above 50 - House wife - Self employed - Unemployed 3. Gender Male 4. Age Below 20 5. The network Im using now is (you can choose more than one) Mobinil 6. names Carrefour, Hilton hotels, Showtime satellite network , Awlad Ragab (Super Market) , and RadioShack I have bought at least once goods (food, toys, electronics, spend a night) from these

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APPENDIX E: OPERAIONALIZATION OF MODEL CONSTRUCTS:


The following list indicates the proposed model variables definitions: Performance expectancy (Venkatesh 2003): Perceived Usefulness (Venkatesh 2003): The degree to which a person believes that using a particular system would enhance his or her live

Job Fit (Venkatesh 2003): How the capabilities of a system enhance an individuals job performance

Relative advantage (redefined by SMEs as the following three constructs to fit the industry) Services: Supports and provides VOIP service (like Skype) Personalized content suitable for my interests (education and medical . Not simple ring tones or jokes) Family offers (club effect) Data enabled Roaming availability Payment services Customer care (I want to be pampered) Resolve my problems quickly with no hassle 24 hours Availability of customer care advertisement blocking Availability of the latest handsets Differentiating services i.e. really innovative services, new Apps, e.g. traffic info service, night spots highlights, social related destinations (Cinema, restaurants), the things that big companies will disregard as they may seem small to them Network: High quality Voice Network quality (drop calls, coverage) Indoor coverage (installs boosters) The original network plays a role My current Mobile provider should be the same provider to this flanker brand Offers Mohamed S. Helmy, MsM-RITI-Cairo Outreach Program, 2011. 65

Bundled with other products (IPTV, Google TV) Promotions in special seasons Bundled discount with their original business Targeted discounts to me in their business Same discount card or membership card that I can refill my mobile and get discount in the original brand related goods

Effort expectancy (Venkatesh 2003): Perceived Ease of Use !!! Easiness of Bill payment Easiness to change subscription, subscribe to new offers Complexity !!! Easy to change from current Mobile operator Easy to subscriber and unsubscribe in services And offers Availability of service channels (Web self service, walk-in shops, also on the handset i.e. on device portal)

Social influence (Venkatesh 2003): Subjective Norm Prefer to be adopt by many friends & peers specially in my community Social Factors Proposed to be insignificant by SMEs Image MVNO is perceived as a low end or high end provider Using a big operator or a new MVNO is a symbol of status Must have a high profile image/brand Brand recognition Brand should not be very commonly used, I want to be a niche

Cost (Mallat et al. 2008) Low cost voice (VOIP) Cheap international calls Low price tariffs Switching cost

Trust (Mallat et al. 2008) Be sure that my personal data are safe with that MVNO company Must feel confident to give away my personal info

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APPENDIX F: MAPPING OF SPSS VARIABLES TO HYPOTHESIS, CONSTRUCTS, AND QUESTIONNAIRE QUESTIONS


Table 0F.1 - Mapping of SPSS variable to questionnaire items SPSS variable Item name V1 Question Cheap voice calls over the Internet (like Skype) Provides information material suitable for my interests (education, medical, legal, etc.) , examples: updated medical news SMS sent regularly to your mobile, financial news e-mailed to your mobile, SMS about new laws issued in the country, news about new business opportunities etc. Family offers (one package for all family lines with free family calls Broadband (Internet & Data) Roaming service in countries outside Egypt Payment for bills from my mobile, example: Electricity, Water bills Customer care solves my problems quickly with no hassle Protection against unwanted advertisement SMS Provides latest mobile handsets in its offers Traffic information service that tells me about crowded or closed roads Events service that informs me about workshop in a cultural center, new party at the Opera Personal assistance reserves Cinema tickets for me, schedules my appointments with Doctors, and reminds me about them I think that the MVNO services can be useful I believe that the MVNO services are useful enough to make me willing to subscribe to them

V2 V3 V4 V5 V6 V7 V8 V9 V10 V11 V12 V13 V14 V15 V16

Cheap VOIP calls

Perceived Usefulness

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V17 V18 V19 V20 V21 V22 V23 V24 V25 V26

Job fit PEOU

I believe that the these MVNO services will fit/meet my lifestyle requirements so that Ill be willing to use it I would use MVNO new services even if they seem more difficult to use compared to traditional mobile services Voice calls are crystal clear, no noise, and no echo Voice calls never drops Network coverage is excellent inside buildings (strong signal inside my home or office) I dont care about which network is behind the MVNO, Explanation: Carrefour or RadioShack will have its own SIM cards but will actually use a network like Mobinil or Vodafone MVNO gives bundled offers on their original brand products (example: Radioshak gives 10% discount on all products if you refill 50 L.E to your Radioshak mobile) MVNO Offers me to gain points on its loyalty card every time I refill my mobile (example: Your shopping card from Carrefour market will collect points when you refill your Carrefour mobile line) I accept the MVNO to share/distribute my personal data to other parties

Voice quality

Offer bundles

Trust V27 V28 V29 V30 V31 V32 V33 V34 V35 Number portability

Example: your number, name or address data is leaked to person(s) you dont know, such data might be used for harassment or advertisement I would move my subscription to an MVNO if I can keep my current mobile number unchanged I would use MVNO if I can Subscribe or unsubscribe from MVNO services and offers in simple and easy steps I would use MVNO if it Offers self-service channels like Web self service, example: change my call forwarding settings or check my voice mail through the internet
H4 Complexity

Exclusive brand

I would use MVNO if it seems to be an exclusive / VIP brand I would use MVNO if it seems to be an ordinary brand
X5 Image

Social factor

I would choose the MVNO that my friends use

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V36 V37

Switching cost Intention

I would change my line to MVNO because there is low cost to change from another network and join MVNO I may consider the idea of using MVNO

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