Research On The Efficiency Of Regulation In Chinese Telecommunication Industry

Research of efficiency is a important field in the economics. The efficiency researchplaces a high value on research of industry. Research of efficiency has constantlydeveloped and covered various industries by the improving of research methods in recentyears. Chinese telecommunication industry has passed through three times ofreorganization since1999, but do the changes is efficiency? Are there any differences indifferent areas? Could the earnings meet the costs of regulation of government? It’s hard tofind out the answers as above, this paper is trying to solve the questions by access theefficiency of Chinese telecommunication.Based on the different historical background and competitive landscape, this paperdivided the development history of Chinese telecommunication into four stages andelaborated the development situation of each part. We found that some indexes have growna lot by the analysis, such as consumer volume, the total business volume andcommunication capacity. But the inefficiency competitive landscape, unbalancedcommunication capacity of different areas and core competences which need to beimproved are still exist. Therefore, it is necessary to access the performance of theregulation policy by analysis the efficiency of the telecommunication industry to find thedevelopment direction.This paper analysis the regulation efficiency from two perspectives: industry andgovernment. In the industry part, the paper uses the DEA-Malmquist method to calculatethe telecommunication industry efficiency based on the panel data of each province ofChina from2003to2010. We had found some phenomenon as below: the national TFP(Total Factor Productivity) just rise by2.2%; the management level and system reform hasgrown a little while return to scale is on the dropping trend; there are large communicationcapacity gaps in different areas and provinces. In the government part, we had find out thatthe regulation costs is one point three times more than the earnings by analysis the datafrom2000to2010, which shows the low-efficiency fact from another perspective.This paper analysis the reasons of regulation failure of Chinese telecommunicationindustry based on the demonstration results as above. I suggest that improving theinstitution to solve the competition issue of telecommunication market. Meanwhile, weshould constantly adjust the regulation strategy to develop Chinese telecommunicationindustry into an industry with core competitiveness.