Tecnical efficeincy in the European TLC sector

This paper proposes an efficiency analysis of the major European incumbent firms in the fixed telecommunications sector. The non-parametric approach, that has been adopted here, expresses the efficiency according to a directional distance measure, allowing to consider the different nature of outputs categories, according to their technological content. Efficiency measures are analysed in relation to some indicators that capture the effect of recent reforms in the direction of liberalization, privatization and vertical separation. The results show that while private ownership and market concentration do not significantly affect the operational efficiency, the vertical separation has a positive effect on performances. This suggest that any losses of vertical scope economies, are more than balanced by performance improvements generated by the expectation of an increase in competition in the medium to long term.