Abstract:

Latin America has become a region with many innovations in telecommunications and mobile telephones. Smartphone penetration has 34% market share and approximately 16 million smartphones entered the market in the first quarter of this year, which 53% increase compared to the same period in 2012 according to recent data. The latest moves in the telecommunications industry in Latin America point to consolidation and a great potential for growth.  This is why we decided to measure efficiency of Latin America telecommunication services. We used data envelopment analysis, which is considered as a powerful tool for measuring efficiency of units. We focused on stock joint companies, because they publish yearly their income statement, balance sheet and cash flow information. We created a two stage DEA model. The first stage measured the efficiency of asset allocation within the companies. The second stage measured the overall efficiency of the companies with the efficiency of asset allocation as one of its input. We measured such efficiencies and their changes for the period from 2008 to 2013. 8 Latin American companies and 8 from other countries were analyzed (in total 96 observations). In this way we were able to say how the Latin American companies preform compared to other companies in the sector.