Telecommunication Sector Reform in Southeast Asia: A New Rationality

Global J. Bus. Soc. Sci. Review 6 (4) 147 – 154 (2018)

8 Pages Posted: 11 Jan 2019

Date Written: December 6, 2018

Abstract

Objective - The telecommunications industry in Southeast Asia continues to grow, as evidenced by the market penetration that continues to increase from 3.8% in 2000 to 71.1% in 2017. However, although the number of subscribers and revenue from telecommunication operators continued to grow between 2008 to 2017, the data shows that the EBITDA margin and ARPU value decrease with the growth rate (CAGR) -1.12% and -4.42%.

Methodology/Technique - This study measures and analyzes the efficiency of 14 operators in Southeast Asia between 2008 to 2017 by using the Data Envelopment Analysis (DEA) method.

Findings - The results show that of the 14 telecom operators examined, Telkomsel (Indonesia) was the most efficient operator with an efficiency value of 0.97 and contributed from subscriber and revenue output variables which far exceeded the average of other operators. The most efficient telecommunication companies thereafter were StarHub (Singapore) and SingTel (Singapore) with an efficiency rating of 0.96 and 0.95 as represented from ARPU output variables that far exceeded the average of other operators.

Novelty - True Move operators became the telecommunication companies with the lowest efficiency because the value of its output variables (subscribers, revenue and ARPU) was far below average and did not show any positive correlation to its efficiency value.

Keywords: Data Envelopment Analysis (DEA); Efficiency; Telecommunication Industry; Southeast Asia

JEL Classification: M1, M10, M19

Suggested Citation

Hendrawan, Riko and Nugroho, Kristian W.A., Telecommunication Sector Reform in Southeast Asia: A New Rationality (December 6, 2018). Global J. Bus. Soc. Sci. Review 6 (4) 147 – 154 (2018). Available at SSRN: https://ssrn.com/abstract=3307325

Riko Hendrawan (Contact Author)

Telkom University ( email )

Jalan Telekomunikasi No.1
Terusan Buah Batu
Bandung, ID West Java 40257
Indonesia

Kristian W.A. Nugroho

Telkom University

Jalan Telekomunikasi No.1
Terusan Buah Batu
Bandung, ID West Java 40257
Indonesia

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