Are the fixed-mobile telcos more competitive? A cross-country efficiency study

Abstract

The trend to integrate fixed-line and mobile service is emerging in the telecom industry. This paper compares the efficiency of fixed-mobile telcos which offer both fixed-line and mobile services with fixed-only and mobile-only telcos for the period 2000–2007. The DEA (data envelopment analysis) method is employed to measure the relative efficiency of the three carrier groups. These sample operators are leading companies in the telecom industry based upon their rankings in Forbes global 2000 and are divided into the three operating models of mobile-only, fixed-only, and fixed-mobile service. The empirical results show that there are significant differences among the three groups and for each year across the 8-year period. The strategic decision not to spin-off the mobile business from fixed-mobile operations was correct. In the future, it is anticipated that a single operating license will authorize the provision of the integrated services of fixed-line, data, mobile, and broadcasting. Therefore, from the long-term perspective the future for fixed-mobile service carriers is promising.