The Impact of Value Added Services on Customer Retention when Telecom Companies Offer Bundled Services: Insight from Telecommunication Companies in Tanzania

Abstract

This study investigates the impact of Value Added Services (VAS) on customer retention in the context of telecom companies offering bundled services in Tanzania. Value Added Services, a popular strategy among telecom companies, aims to retain existing customers while attracting new ones. Despite its widespread use, the effectiveness of Value Added Services in customer retention remains a subject of debate. This research specifically examined the influence of three Value Added Services factors; Airtime Purchase Notification, Call Center Services, and Network Default Notification on customer retention. Employing a cross-sectional research design with a quantitative approach, data were collected from users of Vodacom (181), Airtel (204), and Tigo (209) in Dar es Salaam using stratified sampling and analyzed via multiple regression. Findings indicate that Airtime Purchase Notification and Call Center Services have a significant negative impact on customer retention, while Network Default Notification has an insignificant effect. The results suggest that while these services do not substantially influence customer retention, their provision remains crucial for customer support. Recommendations include continued investment in customer care and adherence to regulatory standards.