Modeling Consumer Behavior in the Cellular Market

Mobile telecommunication is one of the largest and fastest growing industries. A scrutiny analysis of consumer behavior is required because of the high degree of customer loyalty and high competition in the mobile market. Modification of the current tariff plan or development of a new one requires understanding the principles of decision-making by consumers. In this paper, the attempt was made to simulate the probability of switching to another tariff when changing the characteristics of the tariff or personal characteristics, in particular, mobility in space, which has not been studied before. The study is based on data provided by Rostelecom for the period from November 2011 to November 2012. The data contains information about the price lists of tariffs for each month and detailed information about the consumption profile of subscribers: the current rate, type of service, duration, cost, base station. To achieve the goal of the study, we used three multiple choice models with disordered alternatives: Conditional, Mixed and Nested logit.