Mobile network operator switching behaviors of customers in the Turkish telecommunications market: An agent-based model

Abstract

In this study, Turkish mobile telecommunications market is modelled with a relatively new approach called Agent-Based modeling as it is flexible and able to be used for modeling complex systems. Especially over the last decade, it becomes crucial for mobile network operators to seek strategies for keeping their customers as there is a significant increase in customer switching rates in the market with the help of government rulings. Technological developments in the industry also make the competition between mobile network operators more intense as the number of customers are increasing year by year. The model proposed in this study uses agents as customers in the market and it is the agents in the system who make decisions of changing their mobile operators or staying in their current subscription according to possibilities obtained by multi – logit function at the end of each month. The real market data is taken from quarterly reports of Turkish Telecommunications Agency. The analysis of the experiment results shows that price parameter effects customer switching rates significantly. It can be found from the results that mobile operators with higher brand effect has less price sensitive customers so it can be proposed that mobile operators may try to increase their brand effects in order to have less price sensitive customers.