Fuzzy Multiple Objective Decision Making

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Comparative

Productivity Efficiency

for Global Telecoms

Greater efciency of an enterprise is the equivalent of being more competitive in

the market and more protable. It is interesting to study the differences between the

Forbes Global 2000 rankings of leading companies

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and the productivity efciency

ratings for leading global telecom operators. This chapter is the rst attempt to com-

pare the operating performances of global telecom operators in the Forbes Global

2000 rankings with the CCR ratings, particularly EBITDA margins, ROA levels,

total asset turnover, and net prot ratios.

In recent years, telecommunication industries have encountered erce competi-

tion, the bursting dot.com bubble, 3G high auction license pricing, and rapid overseas

development. In response to pressures from technical changes and market compe-

tition, telecom operators have worked hard to cut costs to maintain their bottom

lines (net incomes). The data envelopment approach (DEA) can combine multiple

output and input variables to assess an enterprise’s operating performance. One of

the incentives for the current study is to understand which geographical areas exhibit

better productivity efciency.

This is the rst study to compare relative performance efciencies of the leading

telecom operators by combining the three methods of traditional radical DEA mea-

sure, the Andersen and Petersen (A&P) efciency measure, and the new DEA mea-

sure. Critical research focusing on the productivity efciencies of telecom operators

has attracted the attention of academicians, policy regulators, and decision makers

the world over.

Several studies have applied DEA methodologies to solve practical problems

in the telecom industry. Saunders et al. (1995) discuss some questions about the

economics of telecommunications, arranging them around such themes as whether

the economic value of the benets derived from investments in telecommunications

can be demonstrated and quantied and which segments of the population derive

these benets. Majumdar (1995) investigates the impact of the adoption of new

switching technology on the performances of rms in the United States, telecom-

munications industry by computing both input-conserving and output-augmenting

measures of performance.

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On March 25, 2004, Forbes issued a comprehensive rating of the world’s biggest and most powerful

companies during year 2003 measured by a composite ranking of sales, prots, assets, and market

value. The rating spanned 51 countries and 27 industries (http://www.forbes.com).