=Paper=
{{Paper
|id=Vol-2872/paper12
|storemode=property
|title=Network Quality, Price Perception and Customer Satisfaction: Case of Internet Service
Providers in Albania
|pdfUrl=https://ceur-ws.org/Vol-2872/paper12.pdf
|volume=Vol-2872
|authors=Sauda Nerjaku,Alma Braimllari Spaho
|dblpUrl=https://dblp.org/rec/conf/rtacsit/NerjakuS21
}}
==Network Quality, Price Perception and Customer Satisfaction: Case of Internet Service
Providers in Albania==
https://ceur-ws.org/Vol-2872/paper12.pdf
Network Quality, Price Perception and Customer Satisfaction:
Case of Internet Service Providers in Albania
Sauda Nerjaku and Alma Braimllari (Spaho)
University of Tirana, Faculty of Economy, Albania
Abstract
Internet has significantly changed the individuals’ lifestyles and lots of aspects of society, as
well as having a major impact on economic growth and sustainable development. However, the
Internet usage and diffusion vary greatly depending on economic and social conditions of the
country. In the situation we are in, it seems clear that internet access is so necessary, even more
than ever before, that it has become an inevitable tool in our daily routine. Fixed broadband
Internet access services have experienced steady annual growth during the last years in Albania.
This study is conducted to identify customers view regarding network quality, price perception
and customer satisfaction for Internet Service Providers in Albania. The target population of
this study is comprised by individuals who use a fixed broadband Internet line. The results of
descriptive analysis indicated that 52.4% of the respondents are satisfied with the Internet
Service Provider offering the services, for 51% of the respondents the price charged by their
Internet Service Provider is reasonable, and 51.7% can access the network at any time without
delay. The results of logistic regression model indicated that network quality and price perception
were positively related to customer satisfaction, whereas monthly payment for the Internet service
was negatively related to customer satisfaction. The findings of this study provide useful
information for customers, government institutions, and top managers of Internet Service
Providers.
Keywords 1
Fixed Broadband Internet user, network quality, price, customer satisfaction, Logistic
regression.
1. Introduction countries in the world. What the internet
enables us is not only comprehensive
information but also communication and
Internet has revolutionized communications
business continuity wherever we are. Thus, it is
and methods of commerce by allowing
worth to highlight that having internet access
various computer networks around the world to
nowadays is really important.
interconnect. Internet firstly emerged in the
Internet Service Provider (ISP) is a company
United States in the early 1970s but did not
that offers people or businesses internet access
become visible to the public until the early
as well as other internet services. “The World”
1990s. By 2020, more than half of the world’s
was the first commercial ISP in the world that
population, or approximately 4.5 billion people
provided a direct connection to the internet with
were estimated to have access to the Internet
its first customer logging in in November 1989.
[1].
By the late 1990s there were approximately
The use of technology has gone through a
10,000 ISPs around the world, more than half
rapid growth over the last decade in almost all
located in the United States [2].
Proccedings of RTA-CSIT 2021, May 2021, Tirana, Albania
EMAIL: sauda.nerjaku@unitir.edu.al (S. Nerjaku);
alma.spaho@unitir.edu.al (A. Braimllari)
ORCID: https://orcid.org/0000-0003-1861-8012 (S. Nerjaku);
https://orcid.org/0000-0003-3162-8987 (A. Braimllari)
©️ 2021 Copyright for this paper by its authors. Use permitted under Creative
Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
Dial-up is where the connection with internet service, the dial-up connection was
internet got started. It required a phone-line to used (via telephone lines). The first private
operate, so phone calls could not be made using company to offer paid internet service was ICC
a landline while the Internet was in use. With (Intellectual Communications Center) and its
dial up the maximum speed is 56 kbps, service started in 1998. Immediately after that,
relatively slow. At this speed, a single low- three other ISPs (Internet Service Provider -
quality song would take around 10 minutes to ISP) entered the market, namely ADA-Net,
download it at full speed. Speed was a AbissNet and ABCom. The general public,
significant issue in the early times. The next businesses and institutions began to have
development of home browsing was the somewhat a greater access to the Internet only
introduction of broadband and wireless Internet after 2000, when in addition to private ISPs, the
[3]. Internet began to be provided by the state
The earliest broadband was available by operator AlbTelekom. The fixed broadband
1996, in North America. In the early 2000s dial- connection, which in western countries had
up started to be replaced by broadband as much started to be applied since 2001(bringing the
as between 2000-2001 the number of transition of the Web to its second phase Web
subscriptions increased by 50%. By 2010 over 2.0) in Albania had a very slow and limited
65% of U.S households had adopted fixed spread. The access of Albanian families to the
broadband. Fixed broadband access networks Internet continues to remain at a low rate until
vary greatly in speed and other characteristics 2007. Number of subscribers with internet
[4]. To access the Internet households can chose access through fixed broadband connection in
between different broadband technologies: 2007 was about 1800. The largest investments
DSL (digital subscriber line), cable modem, in recent years have been made in the direction
optic fiber, wireless and Satellite [5]. of increasing internet access through fixed
Internet is a powerful technology that has broadband connection. Thus, the number of
significant economic effect, has become an subscribers with fixed broadband access has
incredibly valuable informational resource and been growing over the last years.
will have a long-term impact on the quality of Fixed broadband access services have
life in developing countries [6]. Results of the experienced steady annual growth especially
study of [7] using World Bank data about during the period of time 2013-2019. All major
Internet Users per 100 inhabitants, indicated operators are noted to have a positive progress
that the diffusion of internet in Albania has in recent years and the largest increase has
achieved the maturity level. Fixed broadband been recorded by "other operators", number of
access services have experienced steady annual subscribers of which during 2019 has been
growth during the last years [8]. increased by 87% compared to 2018. The
The aim of this paper is to identify factors number of subscribers with fixed broadband
that influence the customer satisfaction for access at the end of 2019 reached about 433
Internet Service Providers in Albania. The thousand, which is an increase of about 20%
factors considered in this study are network compared to 2018. Main fixed broadband
quality, price perception, monthly payment for operators include ALBtelecom with a share of
the Internet service and experience with an 30.6% and Abcom with a share of 17.13%,
Internet Service Provider. ASC/Tring with 12%, as well as Abissnet with
9%, Nisatel 3% and Digicom 4%. The rest of
2. Development of Fixed the market is divided into alternative
operators that offer Internet broadband, based
Broadband Internet Market in on fixed networks [8]. The year 2020 was a
Albania novelty for all of us as we were obligated to
continue working from home so accessing to
The internet has brought significant changes the internet seemed very important. The
also to the Albanian Society and economy. The number of subscribers with broadband Internet
first international connection to the internet in access from fixed networks in the third quarter
Albania was made in 1993 [9]. The internet of 2020 reached about 480 thousand, which is
service in the country for the first time was an increase of 1.6% compared to the previous
provided by the UNDP in 1996. To provide quarter and an increase of about 17.3% in
compared to the same quarter in 2019. During
2020, the largest increase in the number of increase of 7.3% compared to the previous
subscriptions2 was achieved during the second quarter and an increase of about 15.6%
quarter of 2020 (because of lockdown) with compared to the same quarter in 2019. [8, 10]
about 462 thousand subscribers, which is an
160000
140000
120000
100000
80000
60000
40000
20000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Q1 2020Q2 2020Q3
Albtelecom Abcom Abisnet Asc Nisatel Digicom Other
Figure 1. Number of subscribers with fixed broadband access (Source: [8],[10])
Fixed broadband penetration for both The average penetration rate through fixed
population and family, as given in the Figure 2, networks in urban area was 25%, and in rural
in the period 2013-2020 has increased more areas was 5%.
than twofold [10]. In 2019 the fixed broadband Fixed broadband penetration remains well
access penetration rate was about 60% per below the EU average and other penetration
households and 15.6% for population. levels of neighboring countries, albeit growing
by 10%-15% annually [10].
70
60
60
50
50 42
40 37
31
25 29
30
20 12.9 15.6
8.6 9.3 10.8
10 6.4 7.3
0
2013 2014 2015 2016 2017 2018 2019
penetration rate for population penetration rate for family
Figure 2. Penetration rate (Source: [8],[10])
The main technology that is used to deliver internet services through fiber optics offers the
fixed broadband connections is via DSL provision of service with the highest quality and
followed by FTTH/FTTB. About 49% of the stability.
total connections are DSL and 29% are optic As regard to fixed broadband by download
fibers. Optic fibers connections are increased speed, AKEP (Electronic and Postal
by 4% compared to year 2018. The provision of Communications Authority) reported that the
2The indicator includes internet access with broadband
access from fixed network or wireless and satellite service.
Mobile network broadband access is not included.
most commonly used speed is 4-10 Mbps with satisfied customers lead to much attention from
55% of subscribers on 2019. The data show that company management on the subject [15].
the number of fixed broadband subscribers with In the telecommunications market, network
speeds lower than 4 Mbps is decreased while quality is one of the most important drivers of
for speeds above 4 Mbps, it is increased. Thus, overall service quality [16], which leads to
even the speed of internet seems to have an customer satisfaction in the context of
upward trend [10]. telecommunication ([17], [18]). In the Internet
According to [11], the average global speed service industry, network quality includes the
for fixed broadband connection is 98.67 Mbps. quality and strength of the network signal,
Albania ranked 87th in this ranking with an number of errors, downloading and uploading
average fixed broadband download speed of speed [19]. Stability, transmission speed and
43.72 Mbps. network coverage are the core attributes of
Total revenues from fixed broadband network quality [20]. Breaks in Internet
Internet services at the end of 2019 were 8.69 connectivity can lead to poor perceptions of
billion ALL, with an increase of about 5% network quality in the customer’s perspective.
compared to 2018 [8]. In this respect, timely recovery of network
According to [8] and [12] the main trends in connectivity is essential. The uptime of service
the electronic communications market are: was tested to have impact on customer
significant increase in the number of satisfaction as well as customer loyalty [18].
subscribers with broadband access from fixed Price is also an important driver for
networks, revenue growth for the sector and an consumers to make buying decisions.
increase of penetration rate. According to [21], "the price is defined as what
is given up or sacrificed to acquire a service or
3. Literature Review product". The sacrifice or price that a customer
pays typically consists of transaction costs and
some degree of risk. While [22] suggested that
Customer satisfaction is the central element
"Price is the amount of money charged for a
of the marketing concepts. According to [13], product or a service; the sum of the values that
“There is but little doubt that the maximization
customers exchange for the benefits of having
of consumer satisfaction is considered by most or using a product or service."
to be the ultimate goal of the market economy”.
Customer value is evaluated on the benefit
If consumer satisfaction is the fundamental of the product or service that is perceived by the
element of the market economy, it is important customers. The price of the product determines
to understand satisfaction and dissatisfaction the value of the customers. Customers seek the
processes among ISPs to better market ISP
product and services prior to the payment of the
services to them, develop new products, price. If the product price meets the
manage competitive forces, provide supporting expectations of the customers, the value will
services, and price services. [14] increase simultaneously otherwise it may
Customer satisfaction with the purchase is decline. However, it is also very important to
determined by how tightly consumers’ maintain the relationship with the customers
expectation is linked with the perceived along with price, product and so on [23].
performance of the product. A satisfied
With regards to price perception, although
consumer is more likely to spread positive Internet broadband users are willing to pay
word-of-mouth and information received more for better service, they will consider
through word-of-mouth are more credible than changing to another provider because of the
a commercial advertisement [14]. price factor [20]. Therefore, it is believed that
Consumer satisfaction is often measured by customers of Internet services are sensitive to
how the product or service in question meets price and the higher price level could lead to
expectations [15]. If the perceived performance low demand, accordingly.
is above expectations, then the customer is In the study of [24] was found that the
satisfied. And if perceived performance will be
satisfaction of the customer is mostly
under expectations, the customer is dissatisfied. influenced by Responsiveness, Assurance,
Compatibility between customer's perception Empathy and Network Quality.
of the product and its initial expectations leads The findings of [25] reveal that dominant
to customer satisfaction. The benefits of
service quality dimensions for ISPs were
network quality, customer service, information range of 0.7 to be acceptable and those over 0.8
quality and privacy. Furthermore, service to be good. Composite score is used to represent
quality directly influenced customers’ each factor by taking the average store of all
complaining and switching intention. items for that dimension, that is network quality
The study of [26] found that the network and price perception.
quality has the most positive impact on To study the influence of network quality
customer satisfaction, followed by perceived and price perception on customer satisfaction,
quality. the logistic regression analysis was used. A
In the study of [27], the results show that logistic regression model with a binary
customer trust, service quality and price response was modeled. For the data analysis,
perception have a positive effect on customer the response was coded as 1 or 0, respectively.
satisfaction. Logistic regression is recommended over linear
Study of [28] showed that price perception regression model when modeling binary
has a direct linear relationship with customer responses and estimates probabilities of the
satisfaction in telecommunications. response occurring [30]. The logistic regression
equation takes the form:
4. Research Methodology p
ln 0 1 x1 2 x2 ... k xk
1 p
This study targets the family member over where p is the estimated probability that the
the age of 18 with a fixed Broadband Internet customer is satisfied, and x1, x2, ..., xk are
connection at their home and that use the independent variables.
Internet at least once a month. All data were The estimated probability of the response
collected through a self-administered occurring (p) divided by the probability of it nor
questionnaire in the period 10 to 25 January occurring (1 – p) is called the odds ratio.
2021. Non-probability sampling (purposive Maximum likelihood method is used to
sampling) was used to gather the data. Out of estimate the odds ratios of the model. Values of
650 distributed questionnaires, only 147 odds ratios lower than 1 indicate negative
questionnaires were returned completed and association, odds ratios equal to 1 indicate no
valid to use for data analysis. association, and odds ratios higher than 1
The questionnaire is designed in four parts. indicate positive association between
The first part includes questions about independent variables and the dependent
experience, type of link and speed of link, variable of the model.
monthly payment, and also name and location STATA12 was used to data analysis.
of ISP. The second part of the questionnaire
consists of questions about the network quality
(4 items), price perception (5 items) and 5. Results and Discussion
customer satisfaction (1 item). The third part of 5.1. Descriptive analysis
the questionnaire includes questions about the
personal characteristics of the respondents such The respondents were from Tirana (49.7%)
as age, gender, education level, family monthly and 23.2% from Durres, 57.8% were female,
income level. An open question about 47.6% were between 18 and 25 years old and
additional comments about the ISP is included 25.2% were between 26 and 35 years old.
in the questionnaire. About 36.7% of the respondents hold an
The items of the second section of the university diploma, and 49% a master diploma.
questionnaire were adopted from the literature Majority of the respondents (46.3%) were
([26]). All the items were measured on a five- employed in public sector, 24.5% work in
point Likert scale, ranging from ‘strongly public sector and 13.6% were students. Around
disagree’ to ‘strongly agree’. A higher mean 34.7% of the respondents have declared family
score on an item indicates greater level of monthly income between ALL 60,001 and
agreement. The Cronbach’s alpha coefficient 90,000, and 31.3% less than ALL 60,000.
was calculated for all items to ensure that the Also, around 21% of the respondents have
items comprising factors produced a reliable been using at home Internet service for less than
scale. According to [29], reliability less than 0.6 1 year, and 17.7% for 1 to 2 years and 30.6%
are generally considered to be poor, those in a for more than 3 years (Figure 3).
Related to monthly payment for the Internet
service, 43.5% of the respondents pay between
21.09 Less than 1 year ALL 1001 and 1500, and 38% pay between
30.61
1 to 2 years ALL 1501 and 2000 (Figure 5).
2 to 3 years
17.69 7.48 10.88
More than 3 years
Less than 1000
30.61
1001-1500
Figure 3. Experience with at home Internet 38.10
1501-2000
service 43.54
2001-3000
About 26.5% of the respondents use the
service of Albtelecom, 17% ABCom, 13%
Tring, 8% Abissnet and 7.5% DigiCom (Figure Figure 5. Monthly payment for the at home
4). Internet service
Network Quality
Albtelecom 26.53 Table 1 shows the results about four items
ABCom 17.01 of network quality. The results indicate that
Other 15.65
Tring 12.93
43.5% of the respondents have declared that the
Abissnet 8.16 upload and download speed of t he network
DigiCom 7.48 is always strong, 39.4% have declared that the
Bleta.net 6.80 uptime of the network is always available
Nisatel 5.44 without interruption, 42.1% that the connection
0.00 10.00 20.00 30.00 quality is always reliable and 51.7% that they
can access the network at any time without
Figure 4. Internet Service Providers delay. Also, all the items have Cronbach’s
alpha value higher than 0.84, so their
reliability is good.
Table 1. Network quality
Strongly Disagree Neutral Agree Strongly Cronbach’s
Item Disagree agree Alpha
The upload and download
speed of network is always 6.80% 24.49% 25.17% 38.78% 4.76% 0.873
strong.
The uptime of network is
always available without 6.80% 34.69% 19.05% 27.21% 12.24% 0.869
interruption.
The connection quality is
8.16% 19.05% 30.61% 33.33% 8.84% 0.856
always reliable.
You can access the network at
6.80% 17.69% 23.81% 39.46% 12.24% 0.849
any time without delay.
Price Perception service supplied by their Internet Service
Table 2 shows the results about five items of Provider is equivalent to its price, 44.2% that
price perception. The results indicate that 51% service offered by their Internet Service
of the respondents have declared that the price Provider is better value for money than what
charged by their Internet Service Provider is they would pay for the same service of others,
reasonable, 35.3% have declared that the and 37.4% that they are willing to pay more for
service’s price of their Internet Service better service quality. Also, four items have
Provider is cheaper than others, 42.2% that the Cronbach’s alpha value higher than the
generally accepted lower value of 0.7.
Table 2. Price Perception
Strongly Disagree Neutral Agree Strongly Cronbach’s
Item Disagree agree Alpha
The price charged by your
Internet Service Provider is 10.20% 13.61% 25.17% 34.01% 17.01% 0.679
reasonable.
The service’s price of your
Internet Service Provider is 7.48% 21.09% 36.05% 25.85% 9.52% 0.711
cheaper than others.
Service supplied by your
Internet Service Provider is 6.80% 21.09% 29.93% 33.33% 8.84% 0.707
equivalent to its price.
Service offered by your
Internet Service Provider is
better value for money than 7.48% 17.01% 31.29% 36.73% 7.48% 0.717
what you would pay for the
same service of others.
You are willing to pay more for
12.24% 20.41% 29.93% 27.89% 9.52% 0.845
better service quality.
Customer Satisfaction The results of binary logistic regression
The results of the item for customer model, shown in Table 3, indicate that the
satisfaction indicated that about 52.4% of the model was statistically significant (LR chi-
respondents have declared that overall, they are square (8) = 98.63, p < 0.05). The value of
satisfied with the Internet Service Provider Pseudo-R2 was 48.48% and the percentage of
offering the services. cases correctly classified was 83.67. According
to [29], the classification accuracy should be at
5.2. Logistic regression Analysis least 25% greater than that achieved by chance.
Table 3: Results of Binary Logistic Regression
Variable Coefficient p-value Exp(b)
Network Quality 1.859 0.000 6.416
Price perception 1.372 0.005 3.944
Experience:
Less than 1 year (RC) 1.000
1 to 2 years -0.404 0.604 0.668
2 to 3 years -0.319 0.666 0.726
More than 3 years -0.336 0.643 0.714
Monthly Payment for the Internet service (ALL):
Less than 1000 (RC) 1.000
1001 – 1500 -2.448 0.037 0.086
1501 – 2000 -2.502 0.039 0.082
2001 – 3000 -3.385 0.026 0.034
Constant -7.626 0.000 0.0005
LR chi-square (df), 98.63 (8)
Prob > chi2 0.0000
% correctly classified 83.67
2
Pseudo-R 48.48%
Note: RC indicates the reference category.
The odds ratios (values) indicated that the The findings of this study provide useful
network quality was positively related to information for customers, government
customer satisfaction, that is, customers that institutions, and managers of Internet Service
have experienced very good network quality Providers. It will be helpful for businesses to
were more likely to be satisfied with the know network quality and consumers' price
Internet service. This finding is consistent with perceptions for improving network quality and
the results of [24], [25] and [26]. for realizing their pricing strategies.
Price perception was positively related to This study has some limitation. Firstly, only
customer satisfaction, that is, customers that four factors are studied. Secondly, the sample
have experienced a high value for the Internet was small and it is not representative for all the
service were more likely to be satisfied with the country. Thirdly, the non-probability sampling
service. This finding is consistent with the was used to gather the data in short time.
results of [27] and [28]. In the future, the research can be performed
Experience (time using the Internet Service) to identify other factors such as service quality,
of the customer was not significant at 5% level. perceived value, switching cost, trust, etc., that
However, experienced customers were less can influence the customer satisfaction and
likely to be satisfied with at home Internet customer loyalty using structural equation
service. modeling.
Also, monthly payment for at home Internet
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