Consumer preferences for improvements in mobile telecommunication services

• We model the utility consumers derive from improvements in mobile services.
• We estimate the marginal willingness-to-pay for each improvement using survey data.
• Consumers will pay 2% of their average monthly income for unrestrained roaming.
• Consumers will pay for improved data rates, but not for improved quality.
• Consumers are indifferent between a 30 Mbps 4G service and a 300 Mbps 4G service.

We employ a choice experiment in order to estimate consumers’ willingness to pay for improvements in mobile services, focusing on 4G upgrades and roaming services. The attributes of an improved mobile service that we investigate in our experiment are: increased mobile internet speed (possible with 4G), unlimited mobile internet use, improved quality (possible with 4G) and unrestrained use in two neighbouring countries (unrestrained roaming). We collect the data for the choice experiment through a face-to-face survey held in all districts of North Cyprus. The results indicate that people value unrestrained roaming services the most. Increased speed and unlimited use attributes are next, and are similarly significant at the 1% level. The impact of improved quality is statistically insignificant at the 5% level, suggesting that consumers are content with the current level of quality they receive with 3G. We conclude that bilateral roaming regulation between governments is more valuable than 4G investments.