EFFECTS OF GSM ON SERVICE DELIVERY OF SMES IN NIGERIA (Case study of Registered SMEs in Edo State)

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

In today’s highly competitive global market place, the pressure on organization’s to find new ways to creating and delivering value to customers is growing stronger. ICT is today being applied in many organizations in a wide range and operations areas. It has provided new ways to store, process, distribute and exchange information both within companies and with customers and supplier in the supply chain (Somuyiwa and Oyesikun, 2010).

Most SMEs in Nigeria use Global System of Mobile communication (GSM) to communicate their customers and by this build stronger relationship. They realize that easy access to GSM and the delivery of their product or services are important drivers in developing and sustaining market competitiveness nationally and internationally. Business-to-Customer and electronic-business can help companies to achieve competitive advantages by providing customers with superior and timely services. The source of competitive advantage is found in the ability of the organization to differentiate with eyes of the customer from its competition and again from operating at lower cost and hence at lower cost and greater profit. According to Haag et.al. (2002), for SMEs to address customer needs in this ever-changing environment and also to be winner in the market-place, timing and superior service are becoming the keys to attain competitive advantage.

Customers nowadays are becoming more time sensitive and time oriented in terms of time and service delivery. Evidences from the literature like (Yang 2001; Elegbeleye 2005; Ajiboye, et., al., (2007) showed that GSM has considerable impact on the economy being an emerging communication industry in Africa, with Nigeria rated as one of the fastest growing market in this field of communication. GSM has enable SMEs in giving timely product information to the customers and also getting feedback within the shortest possible time.

According to Ayo, et., al., (2007); Nigeria was the fastest growing telecoms nation in Africa and the third of the world. The country had experienced a phenomenal growth from a tele density of 0.49 in 2000 to 25.22 in 2007. This trend had brought about a monumental development in the major sector of the economy, such as banking, telecoms and commerce in general. GSM is one of the most explosive developments ever to have taken place in the telecommunications industry (Wojuade (2005), Anyasi and Otubu (2009)). Audile (2000) described GSM as part of evolution of wireless mobile telecommunication that includes high speed circuit, switched data, general packets radio system and universal mobile telecommunication service.

The concept, importance, economic implications and policy implication of GSM have been discussed by some authors and researchers. According to Balogun (2000), the emergence of GSM facilitates economic development as it provides easy and effective communication needed to stimulate and promote trade between Nigeria and its foreign partners in the world. GSM has emerged as in integral essential part of the culture and life of Nigerians. It had played a significant role in communication and encourages investment; Tella et al. (2007). In respect to employment, Manuaka (2008) and Okereocha (2008) found that, over 1,000,000 Nigerians have been directly and indirectly employed by the operators.

The globalization of world economy has further amplified the importance of telecommunications to the economy. The Telecommunication Sector is one of the fastest-growing sectors in Nigeria as averred by Ajiboye et al. (2007). The phenomenal growth of GSM since it was introduced in Nigeria about fifteen year ago confirms this. GSM is indeed one of the major dividends of Nigeria’s transition to democracy. Since its invention, mobile phones have become a necessary product to many business owners and more users are expected and obviously the growing pace of worldwide mobile population will not slow down in the near future. The global mobile telecom users will be about 3.2 billion; the 45% of the world’s population according to Total Midyear population forecast for the world in 2011. This will also enhance the accessibility of SMEs to several customers through mobile phones. This is together with the substantial growth of mobile phone as Hsiao (2004) confidently claimed on the potential growth of the mobile internet users. When more mobile phone users adopt mobile internet services, the m-commerce industry has a better opportunity for business growth.

In the offline environment, it is common knowledge that the quality of services and products is a key determinant of customer satisfaction and loyalty (Parasiraman et al., 1988). Recent empirical evidence shows that, this holds true also for electronic service providers. The quality of services delivered through a web site has become a more significant success factor than low prices or being the first mover in the market space (Reibstein, 2002). The extent to which the GSM affects the service delivery of SMEs in Edo State is the tenets of this study.

 1.2  STATEMENT OF THE PROBLEM

Studies on GSM impact on service delivery of SMEs are inadequate in Nigeria as at the time of this work. Many studies show that SMEs are the driving engine of growth, job creation, and competitiveness in domestic and global markets. To achieve their full potential in these areas SME’s in Nigeria needs to catch up with the new managerial and economic trade such mobile business, the telephone system in Nigeria has been challenged for years. Since the introduction of GSM, mobile telephoning has rapidly become the most popular method of voice communication in Nigeria; and the use of GSM in order to satisfy their customer wants most importantly determines the quality of their service delivery. Moreover, the extent of GSM usage by SMEs and the effect on customers’ service delivery needed to be research into. There is a paucity of research in this area in Nigeria. Thus, this study endeavors to investigate the effect of GSM as tool for improved service delivery in the Nigerian SMEs.

1.3   OBJECTIVES OF THE STUDY

The following are the objectives of this study:

1. To examine the effects of GSM on service delivery of registered SMEs in Edo State.
2. To examine the level of adoption of GSM by registered SMEs in Edo State.
3. To identify the factors that hinders the use of GSM by registered SMEs in Edo State.

1.4   RESEARCH QUESTIONS

1. What are the effects of GSM on service delivery of registered SMEs in Edo State?
2. What is the level of adoption of GSM by registered SMEs in Edo State?
3. What are the factors that hinder the use of GSM by registered SMEs in Edo State?

1.5   HYPOTHESIS

HO: There is no significant relationship between GSM usage and service delivery of registered SMEs in Edo State.

HA: There is significant relationship between GSM usage and service delivery of registered SMEs in Edo State.

1.6   SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

1. The results from this study will educate the managers of SMEs in Nigeria and the general public on the effect of GSM on service delivery of SMEs. It will also educate on the factors limiting the effective usage of GSN by SMEs in Nigeria.
2. This research will be a contribution to the body of literature in the area of the effect of personality trait on student’s academic performance, thereby constituting the empirical literature for future research in the subject area.

1.7   SCOPE/LIMITATIONS OF THE STUDY

This study will cover the relationship between GSM usage and service delivery of SMEs in Nigeria.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

 Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work