Benchmarking the Operating Efficiency of Global Telecommunication Firms

The rapid development of modern information technology has led to fierce competition in today's telecommunication industry. Telecommunication firms' accountability demands that operating efficiency be measured, maximized, and benchmarked. This study proposes an alternative context-dependent data envelopment analysis (DEA) technique to explore the managerial performance and the benchmarks of 24 global leading telecom operators. The analysis measures the relative attractiveness and progress of global telecom operators on a specific performance level against operators exhibiting poorer and/or better performance. The set operators are grouped into different levels of efficiency frontiers. Each efficiency frontier on a specific performance level is then used as an evaluation context for the relative attractiveness and progress. The performance of the efficient telecoms changes as the inefficient telecoms change their performance. It is shown that the context-dependent DEA can be used to differentiate and benchmark the performance of efficient DMUs. These benchmarks may give a first guideline for performance improvement of global telecommunication operators.

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