Greening the telecommunications industry – Consumer preferences and surcharges for environmental attributes of mobile phone plans

Abstract

Incorporating environmental sustainability in products and services is becoming increasingly important for the telecommunications industry. Mobile communications providers, in particular, face the challenge of integrating sustainability into their product design and communication, as their offerings cover both services (e.g., mobile phone plans) and hardware (e.g., smartphones). Whether consumers are willing to pay a premium price for environmentally sustainable telecommunications products and services remains unclear. In the absence of previous empirical research, the present study investigates consumer preferences and the willingness to pay (WTP) for environmentally sustainable mobile telecommunication bundles, with particular emphasis on differences based on consumers’ green consumption values. A three-step pre-study process involving experts and consumers was conducted prior to the application of an adaptive choice-based conjoint analysis (ACBC) among 495 German consumers (using the summed price approach). Compared to price, data volume, and a brand-new smartphone, our findings indicate lower significance of attributes such as smartphone warranty, Eco Rating, and cloud storage. Green consumers place greater value on the smartphone, Eco Rating, and green cloud storage than non-green consumers. The latter exhibit greater price sensitivity and focus less on environmental criteria in their purchase decisions. The WTP for an environmentally-friendly mobile phone plan among green consumers is €11 higher than for non-green consumers. This study contributes to the literature by adding the sustainability dimension to preference research for telecommunications services and by unveiling the relative importance of sustainability in the purchase decision for mobile phone plans.