Abstract:
Over the last two decades, the telecommunication industry in most economies has been growing rapidly. The fast-paced growth of telecommunication utilities can be attributed to a number of factors such as advancement in technology, research and development in Information Communication and Technology and regulatory reforms such as market liberalization, privatization and incentive regulations.
The main objective of the study is to empirically investigate efficiency and productivity of operators in the telecommunication sector in West African Region for the period 1994-2013 using stochastic frontier analysis. Specifically, the study sought to estimate the level of efficiency, evolution of technical efficiency and factors that influence technical efficiency among countries in West African telecommunication sector.
At the 5% level of significance, the number of telecommunication subscriptions, telecommunication employees and annual investment had positive coefficient which means, these variables have significant effects on revenue and technical efficiency of the telecommunication companies across the nine countries. Annual investment has positive impact on technical efficiency with regressor coefficient value of 0.056 which is significant at the 5% level. It is recommended to the management of Telecommunication companies across the nine countries to invest more in their capital stocks by replacing relatively old equipment with new ones. This will have the tendency to increase contributions of their capital to output as well as make it possible for them to operate closer to their frontiers. It is also recommended to stakeholders in the industry to take regular maintenance of machinery seriously especially with relatively old ones.
