The Impact Of Innovation Theory On Switching Costs And Switching Intentions In Mobile Telecommunication Services

China’s telecommunication services industry is now saturated and fiercely competitive. Switching costs can have a great impact on sales in saturated markets. The paper will use a new concept in sales which is the relationship among use diffusion and many variables such as switching costs, switching intention, and consumers’ use innovativeness.A survey was administered using quota sampling to reflect the characteristics of Chinese cellular telephone users. Data on use diffusion, use innovativeness, and switching intention were collected. The pre-survey resulted in199valid questionnaires, and492valid questionnaires were collected in the survey proper.SPPSS v18.0was used to analyze the validity of the two surveys. Exploratory factor analysis, Cronbach’s alpha, and item analysis, followed by confirmatory factor analysis conducted with AMOS7.0, and structural equation modeling were used to verify the relationships between use innovativeness and use diffusion, and between switching costs and switching intention. Six kinds of linear structure models, including3single switching cost path models and3kinds of saturation model analyses, were used to develop a better overall understanding of the relationship between the variables.Analysis of the results revealed4main findings. First, related switching costs have the biggest effect on switching intentions, procedural costs have the next biggest effect, and financial switching costs have the weakest effect. Second, if companies offer large-scale users different fixed prices it canuse diffusion to have a significant impact on switching intention. Third, the finding that use diffusion does not influence switching intention refutes recent findings (see Burnham et al., 2003). The new result is likely due to the fact that this study used participants’ user records to measure the rate of use and variety of use, which eliminated consumers’ subjective self-assessment. Fourth, the effect use innovativeness has on use diffusion depends on the product. Finally, this study is the first to test whether use innovation, which is impacted by use diffusion and switching costs, impacts switching intention, and especially whether use innovation has a different impact on the various kinds of switching costs, which influences the course of consumers’ switching intentions.