Economy & Business, Volume 8, 2014

Abstract: The telecommunication sector has gained a significant role within the global economy in the past two decades. Its production and revenue efficiencies have played a crucial role in countries’ economic growth and have served as financial leverage. The goal of this study is to investigate technical and pure technical efficiencies in the telecommunication sector of European countries during the period 2010-2011. Charnes, Cooper & Rhodes (1978) proposed Data Envelopment Analysis (DEA), a valuable mathematical programming technique that has been applied to measure the efficiencies of decision-making units. The basic form of DEA is a CCR model that depends upon the constant returns to scale assumption. Furthermore, Banker, Cooper & Charnes (1984) developed an alternative DEA model that includes a variable returns to scale approach. In empirical studies, DEA analyses have been carried out with revenue and production-based efficiency models. This paper presents the efficiency results of the telecommunication sector for European countries, and Austria and Spain were found to be completely efficient in terms of technical, pure technical and scale efficiencies. In addition, DEA analyses for the telecommunication sector of European countries have revealed that 2010 efficiency scores have decreased slightly in 2011.