This research examines service quality and its effect on customer retention in the mobile telephony industry. The research investigates customers’ perceptions are being configured and measure service quality, especially in the mobile telephony sector. The case of the TIM Company is being analyzed and the results that occur through this research are based on 100 TIM subscribers. For the purpose of the research a quantitative analysis was conducted, correlation analysis and hierarchical regression analysis was used. The results reveal the high importance of service quality in influencing customer retention and its subsequent influence on the overall performance of the company.