Efficiency Perspective on Telecom Mobile Data Traffic

Abstract

Objective – The global industry is transforming into a digital world, evidenced by digital transformation performed by almost all of the industry sectors. One of the digital drivers is the support of connectivity provided by the telecommunication industry. The increasing mobile subscribers, along with the growth of mobile data traffic, is the sign of digital transformation itself. However, the rise of OTT (Over the Top) service providers tends to acquire the revenue share of the current telecom industry, seeing the trend of voice and SMS revenue that projected to decline. Methodology/Technique – This research is intended to measure the impact of increasing mobile data traffic that mostly caused by OTT services to telecom efficiency. The efficiency measurement & analysis were performed using the Stochastic Frontier Approach (SFA) & Data Envelopment Analysis (DEA) method. Findings – By using the SFA method, Maxis (Malaysia) got the highest efficiency score (0.98), followed by AIS (Thailand) with efficiency score 0.94 and Indosat Ooredoo (Indonesia) as the least efficient telecom provider (0.5). However, by using the DEA method, TLKM (Indonesia) got the highest efficient (0.98), and Celcom Axiata (Malaysia) was the least efficient (0.73/0.8). Novelty – The compelling results of this study are variable total asset variable had a significant negative impact on the efficiency score, and the variable of mobile data traffic was not significantly impacting the efficiency value (t-Ratio 0.71). Type of Paper: Empirical. Keywords: Telecom Operators; Efficiency; Mobile Data Traffic Reference to this paper should be made as follows: Hendrawan, R; Nugroho, K.W.A; Permana,G.T. 2019. Efficiency Perspective on Telecom Mobile Data Traffic, J. Bus. Econ. Review 5(1) 38 – 44 https://doi.org/10.35609/jber.2020.5.1(5) JEL Classification: M10, M15, M19.