Consumers’ willingness-to-pay for mobile telecommunication service bundles

• The paper examines user’s perception of the utility of mobile service bundles.
• Findings from conjoint analysis reveal pricing as the most important criterion.
• Changes in predictive validity are investigated by using curve fitting method.
• Curve fitting does not improve the measurement of consumers’ willingness-to-pay.
• Results support bundling strategies followed by German mobile telcom providers.

With the advent of 3G and LTE networks, bundled packages that contain free minutes, unlimited text messaging, Internet flat rates and the like became prevalent among telecommunication companies. The paper examines user’s perception of the utility of mobile service bundles. Based on a conjoint analysis of 116 respondents (out of a total of 355 surveyed), findings are reported and the structure of customers’ willingness-to-pay is analyzed. The rank order of relative importance of the presented attributes reveals the pricing aspect as the most important criterion. Nevertheless, minutes included and Internet access also play a vital role in the consumers’ evaluation of mobile telecommunication offers. In contrast, text messaging is displayed as the least important attribute. Further, changes in the predictive validity of the conjoint analysis are investigated. The results show that changing the price parameter from linear to curve fitting for more fine-grained analysis does not thoroughly improve the measurement of consumers’ willingness-to-pay. Overall, results support the recent product bundling strategies followed by the main players in the German mobile market regarding voice calling, Internet access and text messaging. The paper helps marketing managers to create optimal bundles of mobile telecommunication services based on willingness-to-pay data retrieved from conjoint analysis.