Evaluation of Telecommunication Companies Using Data Envelopment Analysis: Toward Efficiency of Mobile Telephone Operator in Tanzania

Abstract

The mobile telephone sector has shown dramatic growth in Africa. With the number of mobile phone operators raised, now Tanzania considered the largest telecommunications network in East Africa with over 40 million registered subscribers and mobile money accounts. However, the services provided by operators have not been assessed by the Authority. Therefore, this paper focus on evaluating the efficiency of mobile phone operators in Tanzania. A data envelopment analysis (DEA), NonRadial and Oriented model on the slack-based measure (SBM) was used for the performance analysis. A five input and five output variables generated from 27 reports (2010 to 2016) of Tanzania Communications Regulatory Authority (TCRA) was used to study the efficiency of mobile phone operators. The results show only three operators are efficient with Vodacom-Tanzania ranked as first, followed by Airtel-Tanzania, and Tigo as the third. While Zanzibar Telecom (Zantel), Smart, Halotel and Tanzania Telecommunication Company Limited (TTCL) considered being inefficiency operators.