The Effect of Product Quality and Price Perception on the Decision to Remain Subscribed to Indihome Provider in Sidoarjo with Purchase Decision as A Mediating Variable

Abstract

The rapid growth of the internet industry in Indonesia has intensified competition among Internet Service Providers (ISPs). This study investigates the effect of product quality and price perception on the decision to remain subscribed to IndiHome provider in Sidoarjo, with purchase decision as a mediating variable. A quantitative approach was employed using Partial Least Square - Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0. Data were collected from 100 respondents via purposive sampling among active or former IndiHome subscribers in Sidoarjo. Results indicate that product quality (β=0.399, p=0.001) and price perception (β=0.410, p=0.000) each positively and significantly affect purchase decision. Purchase decision strongly influences the decision to remain subscribed (β=0.542, p=0.000). Partial mediation was confirmed for both paths: product quality through purchase decision (indirect effect=0.216, p=0.002) and price perception through purchase decision (indirect effect=0.222, p=0.002). The model explains 51.6% of purchase decision variance and 48.1% of subscription retention variance. These findings suggest that PT. Telkom Indonesia should prioritize service quality consistency and competitive pricing strategies to reduce customer churn.