Principal Component Analysis (PCA) of Customer Choice of Telecommunication Networks in the Eastern Region, Ghana.

Abstract

Using Principal Component Analysis (PCA) the study seeks to determine factor(s) that inform
customer’s loyalty and their propensity to switch among networks and further investigate the market
share of the six telecommunication companies in Ghana currently. The study also applied the Kaiser –
Meyer – Olkin test and Bartlett’s test of sphericity. The Bartlett’s test of sphericity revealed that the
correlation matrix was identical. Again, eigenvalues of 4.274 and 1.115 were derived for the first and
second components for availability of service, and network coverage, which implied that, two
components greatly impart on customers choice for a particular telecom service provider, and this
was confirmed visually by a scree plot. Other factors that were observed to influence customer loyalty
were freebies, and reliability of network, per minute charges, customer relations, network being used
by family members and friends, among others. A Chi-square test also revealed that, there is an
association between packages offered by other networks and customers desire to own a second line.
The study revealed that MTN is the market leader (44.2% market share) in the telecom industry of
Eastern Region, followed by Vodafone (26.2% market share). The rest are Tigo, Airtel, Glo, and Expresso, respectively. Cable theft, high fuel and utility prices, sim box fraud, power fluctuation and
outage were some of the problems that telecommunication face in Ghana.