The Impact of Misleading Advertisements and Underlying Drivers on Customer Loyalty in Pakistan’s Telecom Sector

Abstract

This study examines the impact of misleading advertisements on customer loyalty within Pakistan’s telecom sector, focusing on key drivers such as hidden charges, network quality, and customer service. The research employs a quantitative, cross-sectional design, utilizing data from 300 respondents and Smart PLS-SEM analysis. Findings reveal that deceptive advertising, particularly hidden fees, significantly erodes customer trust and loyalty, with 74.6% of respondents reporting dissatisfaction due to unmet advertised promises. Customer service emerged as the strongest positive predictor of loyalty (β = 0.477), while network coverage and quality showed negligible effects. A comparative analysis highlights Jazz as the least deceptive provider, correlating with its highest market share (39.2%), whereas Ufone, perceived as the most misleading, lags behind (16.1% share). The study underscores the long-term economic and ethical costs of deceptive practices, advocating for transparency in pricing and service delivery to enhance retention. Recommendations include stricter regulatory oversight, improved infrastructure, and ethical marketing strategies to align advertisements with actual service quality. The research fills a critical gap by linking specific deceptive practices to loyalty drivers in an emerging market context, offering actionable insights for telecom firms and policymakers.

Keywords: Deceptive Advertising, Customer Loyalty, Telecom Sector, Hidden Charges, Service Quality, Pakistan