Efficiency of telecommunications companies in European countries

The telecommunications sector has undergone the most drastic changes in terms of market liberalization and has dominated the privatisation process in most countries in terms of the size of its assets and because this industry is the flagship of public services. The purpose of this study is to conduct a comparative analysis of the efficiency of eleven European privatised Public Telecommunications Operators PTOs from 1997 to 2005 and to determine whether privatisation, liberalisation and investment in infrastructure have increased their efficiency or not. We make use of the DEA methodology to analyse the efficiency of PTOs, as this model is especially appropriate to analyse organisations whose production process does not result in the obtaining of a product but in the delivery of a public service. In spite of the technological progress, our results do not show that the comparative performance of PTOs has grown significantly during the period analysed. Therefore, we must take into account other factors such as privatisation, state regulation and organisational changes to determine their performance. From our study, we can conclude that not all companies have been able to adapt equally to the competitive market. The non-efficient companies have traditionally operated in a protectionist market and they continue in a monopolistic situation in spite of market liberalization. Copyright Springer Science+Business Media, LLC. 2013