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MEASURING EFFICIENCY USING DEA MODELS :
A CASE STUDY OF TELECOM’S COMPANY IN MALAYSIA
NOR ADRIANA AMIZA BINTI MOHD FAIZAL
K242 / 09 SUPERVISOR : WAN FAIZAH BINTI WAN YAACOB
ABSTRACT
This study evaluates the performance efficiency of 10 major telecommunications companies in
Malaysia, a sector vital to the nation’s digital growth. Using three quantitative methods, DEA (CCR
input-oriented), Super-Efficiency DEA, and Stochastic Frontier Analysis (SFA), the analysis
considered capital expenditure and employee count as inputs, and revenue and number of subscribers
as outputs. The DEA model assessed initial efficiency, Super-Efficiency ranked top firms, and SFA
(applied using Python) identified inefficiencies and improvement opportunities. Results showed RED
Tone as the most efficient company via DEA, while Maxis and Binasat were highlighted as benchmarks
under SFA.
PROBLEM STATEMENT OBJECTIVES
The rise in mobile device usage and digital platforms has led to a surge 1.To measure the efficiency score of Telecom’s
in mobile data demand, especially during the COVID-19 pandemic. Company using DEA CCR input oriented model.
Malaysian telco companies faced pressure to upgrade infrastructure 2.To sort the rank and the best Telecom’s
and offer affordable internet plans, impacting profit margins. This Company using Super-efficiency ap proach.
study evaluates the efficiency of major telco firms using DEA (CCR 3.To suggest an improvement to inefficient
and Super-Efficiency models) and Stochastic Frontier Analysis (SFA) Telecom’s Company using SFA method.
to identify performance gaps and suggest improvements.
METHOD &
IMPLEMENTATION
1 Phase 1 : DEA CCR Input-Oriented Model
Tool : LINGO 20.0 DATA
Goal : Calculate Efficiency
Score (0 to 1) COLLECTION
Output : Identify Efficient
DMUs ( d ) RESULT &
0
2 Phase 2 : Super Efficiency DEA Model DISCUSSION
Tool : LINGO 20.0 DEA CCR 2 Maxis 1
TM
Goal : Rank Efficient DMUs Input-Oriented Model 3 YTL Corporation 1
1
4
( Efficiecny > 1 ) 6 Efficient 6 ONE XOX 1
Output : Identify Top DMUs
Telecom’s Company 8 CelcomDigi 1
9
REDTone
1
3 Phase 3 : Stochastic Frontier Analysis (SFA)
Super Efficiency DEA
Model
Tool : Python
Goal : Separate Inefficiency & Noise
Output : Suggest improvements for inefficient SFA : Output by No. Of Subscribers
DMUs
CONCLUSION
The study successfully applied DEA and SFA models to measure
the efficiency of Malaysian telecom companies. RED Tone was
identified as the most efficient using DEA, while Maxis and
Binasat performed best in SFA. Combining both models gave a
more complete view of efficiency. These findings can help SFA : Output by Revenue
companies improve performance and guide future benchmarking.
RECOMMENDATION
Telecom companies should use efficient firms like RED Tone and
Maxis as benchmarks to improve their resource management.
Adopting best practices and optimizing input usage can enhance
overall performance. Future studies can include more variables
and explore efficiency over time for deeper insights.
