Differences between LTE and 3G service customers: Business and policy implications

• This paper assesses the differences between 3G and LTE subscribers.
• The validity of the traditional determinants of customer satisfaction is tested.
• The effects of customer satisfaction and switching costs on loyalty are analyzed.
• This study finds that LTE users care more about data service quality than 3G users.

South Korea has now become one of the world’s leading mobile service markets with the launch of its advanced LTE services; the LTE service subscription rate in Korea has exceeded 50% as of November 2013. This development raises the question of how LTE service subscribers may differ from 3G service subscribers. Within the context of this rapidly changing environment of mobile service markets, this study examines the validity of the traditional determinants of customer satisfaction in data-service oriented mobile communications markets, analyzes the effects of customer satisfaction and switching costs on customer loyalty, and assesses the difference between 3G and LTE subscribers with respect to their determinants of customer loyalty. The results show that there are significant differences between 3G and LTE subscribers while traditional factors such as call quality, data quality, customer support, and price perception are still significant determinants of customer satisfaction.